After Snoop Dogg announced on Thursday that he was giving up smoking, the share prices of a number of cannabis companies suffered a blow.
The 52-year-old musician, whose real name is Calvin Broadus, became known for his love of the recreational drug over the years and made the surprise announcement to his social media followers.
“After much consideration & conversation with my family, I’ve decided to give up smoke. Please respect my privacy at this time,” he posted on Instagram and X.
Newsweek reached out to Snoop Dogg’s representative via email for comment Friday.
It has come as a shock to fans of the veteran rapper due to his open appreciation for the drug, which has extended to a variety of business endeavors, such as edibles, weed strains and a digital media business devoted to marijuana-related news.
This is what has led some fans to speculate that the post was part of a marketing stunt for his cannabis company, Leafs By Snoop.
While he did not specify what form of smoking he was stopping, or even whether he was serious, cannabis stocks were affected on Thursday.
Global X Cannabis ETF, which is a bundle of different stocks in the cannabis market, opened 1.5 percent lower on Friday. Aurora Cannabis Inc., a Canadian licensed cannabis producer, also moved lower initially.
Shares of Altria Group, one of the world’s largest producers and marketers of tobacco, cigarettes and related products, also opened down, snapping a two-day winning streak. In 2019, it acquired a 45 percent equity stake in Cronos Group, a leading global cannabis company.
People on X have also noticed the effect that Snoop Dogg’s news potentially had on the market.
“Snoop Dogg quits smoking, 90% of cannabis-related stocks drop. Can’t make this s*** up,” one X user wrote, alongside screenshots of plummeting cannabis stocks.
“Weed stocks plummeting due to the retirement of @SnoopDogg from smoking weed #weedsmokers,” said another.
Cannabis stocks today… https://t.co/gbFVqm9CNo pic.twitter.com/LlDTimHysO
cannabis stocks after snoop said he is quitting smoking. we’re living in a very strange world. pic.twitter.com/yLtqM5DMj2
Snoop drops the entire sector.
#Forex #FX #Pips #Crypto #Cryptocurency #CryptoNews #Stocks #Options #Trading #StockMarket #Futures $BTC $ETH #EURUSD #GBPUSD #altseason #SmallCaps #snoopdogg #marijuana pic.twitter.com/0G4bvtlU0u
However, Grzegorz Drozdz, a market analyst at Invest.Conotoxia.com, told Newsweek that the loss some of these stocks have experienced is more complicated than simply being affected by Snoop Dogg’s announcement.
“Companies associated with the cannabis industry have experienced a difficult period over the past two years, recording an average decline of around 70 percent. This drop was largely due to the repeated unprofitability of these businesses.
“In order to easily raise capital, due to the high popularity of these types of companies around 2018, many of them went public. The negative profitability prompted these companies to turn to debt financing to maintain liquidity,” he said.
“Unfortunately, because of the lack of legal liberalization, the expected [market] development did not take place. Confronted with the rising costs of new debt, the companies were forced to focus on debt reduction instead of business development.
“The departure of one of their most recognizable endorsers, rapper Snoop Dogg, is unlikely to significantly affect the operations of these companies. Their main problem is structural, associated with the details concerning the industry.”
H/T: www.newsweek.com
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