There’s life on the Venture.
In a corner of the Canadian public market still darkened by the commodity downturn, the mania for all things marijuana and cryptocurrency has ignited a spark.
Frenzied trading in pot stocks and blockchain companies has abruptly transformed the TSX Venture Exchange from a market almost wholly dependent on natural resources into a clearinghouse for some of the hottest trends in investing.
Concerns about investor euphoria and speculative bubbles notwithstanding, the recent action has brought about a much-needed revival of the exchange and may represent early progress in reducing the small-cap market’s vulnerability to commodity prices.
“This is a phenomenon,” said Darrin Hopkins, director and co-head of the public venture capital division of Richardson GMP. “There is a ton of money coming into these names. Now what we need is for that capital to spill over into everything else on the Venture exchange.”
Currently, Canada’s publicly traded venture market in general is hitched to the vagaries of two very hot sectors.
Starting just before Christmas, a fresh round of investor euphoria for cannabis stocks saw the S&P/TSX Venture Composite index rise 15 per cent in just two weeks of trading. The top-five movers over that time were all cannabis companies, with shares of Newstrike Resources Ltd. – the company backed by band members of the Tragically Hip – rising almost sixfold. Those stocks, and the index, have since cooled off over the past few trading days.
Prior to that, blockchain stocks represented the primary fixation of many Venture investors. Best known as the digital ledger technology on which bitcoin is built, blockchain companies have proliferated on Canadian exchanges in recent months as cryptocurrencies have captured investors’ imaginations.
Several blockchain names were introduced to the