Robinhood Stops Trading Of Aurora Cannabis Stock Because Of High Demand
Robinhood, the no-fee stock trading app, has been one of the biggest success stories of the recent Fintech space. The app is widely popular amongst millennials, so much so that even Rapper Soulja Boy showed his appreciation for it.
However, even they are falling prey to a trend which might be more popular than no-fee stock trading or even cryptos: Cannabis.
Robinhood notified its users on 19th September that it suspended new purchases of shares in Aurora Cannabis, a Canadian marijuana producer listed on the Toronto Stock Exchange. Aurora shares are also available to trade in the U.S. on the over-the-counter market under the ticker ACBFF. Demand for the OTC shares grew so high this week that Robinhood informed users it would suspend buy orders.
“This is happening because there’s limited support at execution venues for the large volume of ACBFF orders we’ve received,” Robinhold told the more than 81,000 investors who hold Aurora Cannabis shares through the app.
Other cannabis companies, such as Tilray and Canopy Growth, are still available for trading on Robinhood. Aurora surged in popularity this week after reports emerged that Coca-Cola was talking with Aurora to produce cannabis-infused drinks. Aurora’s shares on the U.S. OTC market have risen more than 1200% since mid-July.
A Robinhood exchange news came the same day as shares of Tilray (TLRY), a Canadian marijuana producer, jumped nearly 40%, bringing the company to a market capitalization of $20 billion. The stock’s valuation is up nearly 10x since it was listed for trading on the Nasdaq back in July.
It's not unheard of for Robinhood to restrict trading to protect its users from fraud and manipulation. Last month the company restricted trading of MoviePass' parent company Helios & Matheson to protect customers “from the risks associated with some low-priced stocks.”