The glory days for marijuana stocks began in late 2017 and early 2018. Then in September of 2018, the bottom began to fall out of the market for these stocks, and by March of 2020, shares were down as much as 90% compared to prices in July 2018.

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The troubles reflected a number of problems for the new industry: too much product and not enough demand, falling prices on the black market where sellers did not pay taxes and a slow-moving Canadian regulatory system that limited retail outlets. Eventually, these problems got sorted out, but shares of the pot growers didn’t begin rising until late November of last year, when it became clear that Joe Biden was going to be the new U.S. president.

Biden’s election, and the election of two Democrats from Georgia to the U.S. Senate in January, gave the industry (and shareholders) hope that the U.S. listing of marijuana as a dangerous drug would be removed and that cannabis sales would become legal throughout the United States.

That hope is helping push pot stocks to recent highs, but they’re still a long way from their peaks of 2018. Here is how six top cannabis stocks have performed since August of 2018:

• Aphria Inc. (NASDAQ: APHA) is up 223%.
• Aurora Cannabis Inc. (NASDAQ: ACB) is down 70%.
• Canopy Growth Corp. (NASDAQ: CGC) is up 102%.
• Cronos Group Inc. (NASDAQ: CRON) is up 169%.
• Sundial Growers Inc. (NASDAQ: SNDL) is down 65%. (Sundial did not come public until August of 2019.)
• And Tilray Inc. (NASDAQ: TLRY) is up 178%.

Of these stocks, Tilray has created the most noise in the past few days. Shares shot up more than 50% on Wednesday following the company’s announcement that it had signed a deal to become the sole provider of medicinal marijuana in the United Kingdom.

There was, however, an additional factor in the mix. Retail investors who follow Reddit’s r/wallstreetbets jumped on the stock as well. Some were attracted by the U.K. deal and others were probably attracted by the short interest in the industry. According to data from S3 Analytics, short interest in the cannabis industry totals nearly $5 billion, with 20 stocks accounting for $4.86 billion of the total and the six stocks in our group accounting for about $4.1 billion of the total. Including GW Pharmaceuticals, which is being acquired by Jazz Pharmaceuticals, the seven most-shorted cannabis stocks account for about $4.5 billion in the industry’s short interest.

Around one-third of Tilray’s total float (30.8 million of 95.2 million) were short on January 29, and as of Wednesday’s close, just under 22% of shares (about 21 million) were short. But almost 51 million shorted shares changed hands on Wednesday, more than a quarter of the company’s total share volume of nearly 199 million shares traded.

On January 29 (the last reporting date for short interest), about 14.2% (roughly 25.9 million shares) of Aurora Cannabis stock was shorted. As of Wednesday, about 17% (seven-day average) of shares were short. Short interest in Aphria totaled 16.7 million shares at the end of January (about 5.4% of the total float), and the seven-day average short interest has dropped to 7.7%.

Canopy Growth’s short interest totaled just over 22 million shares on the January reporting date (9.6% of the total float) and about 14% of shares are now short. Cronos’s short interest totaled just over 26 million shares (14.4% of the float) in January and 17.7 million shares are currently short.

Short interest in Sundial was 72.8 million shares on January 29 (about 17% of the float), and the current seven-day average short interest is 7.6%. But more than 200 million shorted shares were traded on Wednesday. And trading in Sundial is likely to be squeezing short sellers again Thursday.

Among this group of stocks, only Sundial was trading higher as of mid-morning Thursday. Sundial traded up more than 14%, at $3.39 in a 52-week range of $0.14 to $3.96. That high was posted earlier in the morning.

After a monster Wednesday, Tilray traded down about 31% early Thursday, while Aphria traded down about 18%, Canopy Growth was down about 16%, Cronos was down about 14%, and Aurora traded down nearly 13%.

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