One area of the market that was smoked in October was the cannabis industry.
Investors betting on the many cannabis shares listed on the local share market were nursing sizeable declines last month.
Here's what happened:
The Althea Group Holdings Ltd (ASX: AGH) share price was crushed in October, falling a massive 48% over the period. Although the company reported strong growth in prescription numbers, its quarterly revenue was extremely underwhelming at just $755,385. But perhaps the biggest weight on its shares was news that major shareholder and strategic partner, Alphria, was dumping 37 million non-escrowed shares at a significant discount at the time.
The AusCann Group Holdings Ltd (ASX: AC8) share price lost almost 18% of its value last month. As with Althea, investors were quick to hit the sell button after a major shareholder sold its holding. Strategic partner, Canopy Growth Corp, dumped its entire 13.2% stake at a significant discount.
The Creso Pharma Ltd (ASX: CPH) share price crashed 43% lower last month. Investors have been selling this cannabis company's shares due to a collapse in the share price of Canada-listed PharmaCielo. The reason for this is that PharmaCielo is in the process of taking over Creso Pharma in an all-scrip deal. With the PharmaCielo share price almost halving in value in October, the value of its takeover offer has dwindled. Shareholders will be voting on the takeover on November 11.
The THC Global Group Ltd (ASX: THC) share price sank almost 14% lower during October. This decline appears to be down to concerns over the oversupply of dried cannabis flower. THC Global is currently constructing a facility that will produce an initial 80,000kg of dried cannabis flower annually. Given how dried flower inventories in Canada in July were a whopping 25x greater than the monthly sales in the country, the market doesn't really need this extra supply.
