American cannabis companies experienced a major surge and then a dramatic drop over the week when Reddit investors shifted their focus to the market. According to CNBC, users on the site were discussing the pending merger between Tilray and Aphria - two Canadian companies involved in the production of medicinal cannabis - as well as the possible decriminalisation of marijuana under Biden's administration.
As a result, Tilray shares spiked drastically, gaining around 51 percent, and Aurora Cannabis - a licensed cannabis producer, also Canadian - saw a 20 percent rise. However, on Thursday, the pot dropped significantly: shares of Tilray fell 49.7 percent, Aphria lost around 36 percent and Aurora Cannabis fell some 23.5 percent. Canopy Growth shares declined by 22 percent.
Previously, the forum made headlines in the business press when the multiple users on r/wallstreetbets - Reddit urged people to buy and hold GameStop shares in a bid to punish large hedge funds, which had been betting against the video game retailer. As a result, GameStop shares soared from around $20 to $483 over just two weeks and the major funds lost billions.
Some broker platforms, including RobinHood, restricted the trade of the shares or even forcibly sold some users' portfolios, citing security issues. In response, enraged traders launched a class-action lawsuit against RobinHood and destroyed its rating, forcing Google to remove at least 100,000 bad reviews.