By Courtney Dentch

Bloomberg

Canadian cannabis retailers were sold out of about 46 percent of pot products after strong demand in the first week following the country’s legalization of recreational use, Cowen analyst Vivien Azer said, based on her survey of online retailers in five provinces.

The sell-out rate is likely to be a modest positive for Canopy Growth Corp. and appears favorable for Tilray Inc., the two largest public pot companies, Azer said. Yet investor sentiment on the emerging sector has cooled in the week since the regulatory shift. The stocks have each fallen more than 20 percent since Oct. 16, cutting into a rally that saw Tilray surge more than 400 percent in the two months ahead of the legalization.

About 56 percent of Canopy Growth’s 144 products available were sold out in Azer’s checks, while Tilray, which doesn’t have licenses to sell cannabis goods in three of the five provinces she surveyed, saw a sell-out rate of 64 percent across its 22 products. Azer carries a buy-equivalent rating on both stocks. Aurora Cannabis Inc. and Aprhia Inc. also showed strong out-of-stock rates.

Cannabis stocks were poised for another decline Tuesday amid a global market rout driven by geopolitical concerns and cautious forecasts from U.S. companies reporting earnings. Tilray fell 10 percent in pre-market trading in New York, while Canopy Growth’s U.S. shares slid 5.9 percent. Cronos Group and the ETFMG Alternative Harvest ETF also traded lower.

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