Investors are very excited about the budding cannabis industry – so excited that one small company that makes weed-dispensing vending machines had to tell its investors to chill out and get a grip after its stock rose 3,000 percent.
On Monday, November 12, Medbox Inc. had stock trading at $42, up from $6 the week before. Then Marketwatch.com recommended the firm to investors as a way to get into the marijuana business. Suddenly there was a 3,000 percent share price increase, with the stock finally closing on Thursday at $205 a share.
The company issued a press release on Thursday warning that the share price was exaggerated. “While we are pleased by the share attention,” CEO Bruce Bedrick stated, “Medbox shares have traded between $2.75 and $3.45 over the past several months. Our fundamentals and market potential are improving…but we temper investor expectations at present price points.”
Medbox Inc. was the best performing stock of last week before falling back to normal levels, rather unprecedented amongst investors and analysts. After the press release, Medbox stock closed on Friday at $20 a share – more reasonable, but still over three times what it had been trading for months before.
After the election in which both Colorado and Washington legalized recreational marijuana use, other companies in the cannabis industry have also benefitted, though not to quite the same extent. SearchCore Inc. (operates WeedMaps) rose to 88 cents from 30 cents last week. GreenGro Technologies, a hydroponics company, watched their shares more than triple, closing at eight cents at the end of election week.