Although the local market was a sea of red on Tuesday, a few shares stood out with larger than average declines.
One of these was the Hydroponics Company Ltd (ASX: THC) share price. The diversified cannabis company's shares finished the day down over 11% to 71.5 cents. This brought its two-day decline to approximately 17%.
Why were its shares lower?
Almost all of the medicinal cannabis shares tumbled lower today as investors went into risk-off mode following sharp falls in the United States.
The Auscann Group Holdings Ltd (ASX: AC8) share price, for example, fell 13.5% and the Cann Group Ltd (ASX: CAN) share price sank 5% lower.
Medicinal cannabis companies have been some of the worst performers on the market largely due to the fact that they a significant amount of growth built into their shares already and have generated little by way of revenue. This puts them at the high-end of the risk scale.
It hasn't just been Australian cannabis shares feeling the brunt of this sell-off. As we mentioned yesterday, Canadian cannabis giant Canopy Growth Corp has lost C$500 million off its market capitalisation over the last few days.
It will be interesting to see how the industry reacts tomorrow. No doubt it will be a big move one way or another.
