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Cannabis stock short-sellers made almost $1 billion in 2019 BY BLOOMBERG NEWS ORIGINALLY PUBLISHED: DEC 18, 2019 Email Twitter Facebook Pinterest Google+ Linkedin Short-sellers are winning big this year with expensive bets against pot stocks. Cannabis bears have cleared US$993 million in mark-to-market gains so far in 2019, even after losing US$132 million this month as stocks bounced off their lows, according to data from financial analytics firm S3 Partners. Short exposure to the sector grew by US$843 million or 35 per cent in 2019, with most of that concentrated in 20 companies, S3 said in a report Wednesday. U.S. short-seller with penchant for Canadian companies makes Canadian Tire its latest target Short sellers cash in on cannabis as investors get fed-up with money-losing companies Short sellers set their sights on Canopy Growth, cut Aphria positions The investor frenzy that had characterized the cannabis industry in 2018 quickly faded this year as companies missed earnings expectations and the regulatory landscape proved to be more difficult than expected. Since March, pot stocks are down by about two-thirds, and capital markets have largely frozen for all but the strongest names. Pot stocks are now among the most expensive to short, with an average borrow fee of 31 per cent for the 20 that are most shorted. Despite that, the sector has surprisingly been immune to short squeezes, wrote Ihor Dusaniwsky, managing director of predictive analytics at S3. A prolonged cannabis sector rally will be bolstered with a flurry of short covering as the high cost of short financing (stock borrows) coupled with mark-to-market losses will result in multi-security short squeezes, he said. Bloomberg.com Read the feature rich experience YOU MAY ALSO LIKE Short-seller heists: Why do institutional investors support activist hedge funds only out for a quick profit? 'Building a new industry from scratch is hard': Cannabis firms brace for more spilled blood in 2020 U.S. short-seller with penchant for Canadian companies makes Canadian Tire its latest target Cannabis deals dry up with pot stocks limping into year end Pot stocks look set to keep bleeding as companies report third quarter earnings POPULAR NOW REAL ESTATE Canadian home prices to fall in real terms next year as affordability, mortgage rules bite: Fitch MINING Billionaire Eric Sprott dishes on his golden investment spree: 'Its like being at a table with a winning run' ENERGY Alberta ranchers, farmers furious over oil and gas companies' failure to clean up their geriatric wells PERSONAL FINANCE Baby boomers have made a fortune on real estate here are three reasons to consider cashing out now AUTOS Eyes on Fiat Chrysler's Canadian plants as company merges with Peugeot to create $47-billion auto giant CANNABIS CANNABIS BUSINESS CANNABIS INVESTING 2019 Postmedia Network Inc. All rights reserved. Unauthorized distribution, transmission or republication strictly prohibited. 365 Bloor St East, Toronto, ON, M4W3L4 www.postmedia.com Privacy - Updated Terms Copyright Digital Ad Registry