Robinhood, the no-fee stock trading app, has been one of the bigger success stories in the fintech space, but the startup is facing problems handling an even hotter trend: the cannabis industry.
According to Business Insider, Robinhood notified its users Wednesday morning 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,” Robinhood reportedly told users who bought shares in Aurora. “We appreciate your understanding and hope to re-enable buy orders for ACBFF in the future.”
As of late Wednesday, Aurora Cannabis is still ranked as the 16th most popular stock on the app, with 81,000 Robinhood users having invested in its shares. A search for Aurora’s ticker brings up a notice that “This stock is not supported on Robinhood.”
Other cannibis 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 cannibis-infused drinks. The news prompted the Toronto exchange to briefly suspend trading in Aurora’s shares Tuesday.
Once trading resumed, Aurora shares surged, despite denials from both Aurora and Coca-Cola that such a partnership was in the works. Aurora’s shares on the U.S. OTC market have risen more than 1200% since mid-July.
“We suspended the purchase of ACBFF earlier today because our execution venues were unable to support the large volume of orders we’ve received for the stock,” Robinhood spokeswoman Lavinia Chirico told Coins2Day. “Customers who hold the stock may continue to either hold or sell ACBFF on Robinhood.” The trading volume in Aurora’s OTC stock surpassed 39 million shares Wednesday.
Robinhood raised $110 million at a $1.3 billion valuation in April 2017. It’s now valued at $5.6 billion. The company has said it’s losing money as it pushes to expand into other trading areas like stock options and cryptocurrencies, which add to expenses as Robinhood pushes for a bigger market share.
This story has been updated to include a comment from Robinhood.
