Marijuana stock Tilray plunges 16% after PepsiCo CFO says no pot plans

Cannabis stocks fell across the board Tuesday after PepsiCo told investors that the food and beverage giant said it has no plans to invest in marijuana.

Though most of the marijuana stocks opened Tuesday without much fanfare, they took a leg lower after PepsiCo Chief Financial Officer Hugh Johnston told Cowen analyst Vivien Azer on the company’s earnings conference call that the company is steering clear of pot for now.

“I think the difficulties in investing in that category, particularly in the U.S., where federally these things are still not legal, are quite a considerable challenge,” he said on the call. “So we look at everything, but certainly no plans at this point to do anything.”

Tilray, one of the most volatile of the weed equities, lost about one-fifth of its value at one point.

The shares closed lower by 16 percent. Peers Canopy Growth dropped 7.4 percent while HEXO shed 9.4 percent in Toronto. Tilray is a medical cannabis producer.

Shares of Aurora Cannabis, which had reportedly at one time been in talks with Coca-Cola for weed-infused beverages, fell 5 percent on the Toronto stock exchange.

Shares of PepsiCo, meanwhile, lost 1.8 percent Tuesday. Johnston later told CNBC in an interview, “I think we’ll look at it critically, but I’m not prepared to share any plans that we may have in the space right now.”

Other stocks in the limelight include pharmaceutical companies, including GW Pharmaceuticals, that produce and market drugs that use cannabinoids. The stock lost 2.9 percent Tuesday.

Tilray has enthralled Wall Street over the past few weeks after posting its best day ever following approval from the Drug Enforcement Administration to import pot to the United States for medical research.

The stock is up more than 517 percent since its initial public offering in mid-July.

Given the excitement around what appears to be an amenable DEA, Tilray shares have swung wildly over the last 20 days as investors are pinned between interest in a stake in the burgeoning industry and fears of an asset bubble.

Both Aurora Cannabis and Canopy Growth have endured similar frenzy over the last few weeks.

Aurora has rallied 35 percent over the past month in Canadian trading after Canadian news service BNN Bloomberg reported Coca-Cola is in talks with Aurora to develop weed-infused beverages.

—With reporting by Lauren Hirsch.

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