Sundial Growers (NASDAQ:SNDL) is down about 37% since I last wrote about it in March. That’s a bitter pill for bull-minded retail investors who remain committed to the company. But it has to be music to the ears of those equally passionate investors driving up short interest in SNDL stock.

Presently trading at $1.10, SNDL stock falls into the penny stock category. And as such it has attracted the attention of a committed group of retail investors known as the Redditors. Sundial was part of the “meme stock” craze back in February 2021, albeit playing a much smaller role than its A-lister brethren.

But even though the stock is down from its previously “lofty” price of more than $2 per share, Sundial remains a very active stock among the retail crowd. I say that because, as I brought up in a prior article, SNDL is virtually ignored by institutional investors.

This doesn’t mean that every investor should avoid Sundial Growers. However if you prefer to take a more “set it and forget it” approach to your investments, there are better options out there, including any number of cannabis-focused ETFs.

Sundial Is Making a Rational Pivot

You’ve probably all heard the idiomatic definition of insanity: doing the same thing and expecting a different result. So investors can take heart that Sundial is attempting to try something new.

While not abandoning their cultivation efforts, they have been pivoting to focus on higher margin products (such as vapes). And the company is also becoming an investor in other cannabis companies. This is an intriguing model, but it’s far too early to tell if it will work out for Sundial.

And one thing that concerns me is that being the lender of last resort for many of these companies is an easy way to burn through the pile of cash the company accumulated in 2020. Plus as my colleague GS Early wrote in a recent article for InvestorPlace, the U.S. market isn’t hurting for venture capitalists and investment bankers who are open to investing in viable cannabis companies.

Earnings Were a Non-Event

When many cannabis companies continue to deliver terrible earnings, you would imagine that investors would be “over the moon” when it came to Sundial’s quarterly check-in with investors. One of the surprising aspects of the report was a positive adjusted EBITDA.

While that shouldn’t be taken as the “end all, be all” for any stock, you would think it would be enough to give SNDL stock some love. But the stock has barely moved. And that’s largely because it still lacks the juice that comes with being on the radar of institutional investors.

SNDL Stock Remains a Heavy Lift

When I last wrote about SNDL stock I felt it was a heavy lift for retail investors. Sundial is showing a little more interest from institutional investors, but it’s not significant. I’ll go back to the article by GS Early who reminds investors that “big money” investors are likely scanning the playing field. But they’re not likely to do more than a little window shopping until they get a better idea of which companies are set up for long-term success.

This makes it difficult to see SNDL stock moving significantly higher in the short term. But at this point, the cannabis sector in general feels like it’s on hold. Canada continues to face pandemic restrictions that gives the retail cannabis industry a one step forward, two steps back feeling.

In more positive news, the United States Congress may introduce legislation to legalize marijuana. But even if the U.S. opens up tomorrow, not every cannabis company is ready or able to claim a piece of the pie. And here again, it appears that Sundial is not presenting investors with a clear strategy of how it will enter the U.S. market.

More a Trade Than an Investment

If you’re looking to trade SNDL stock, there could be a case. The share price has been consolidating around its 200-day simple moving average. If it breaks above, traders could find themselves on the positive end of a swing trade. But that seems more like a gamble than a sure thing.

On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris Markoch is a freelance financial copywriter who has been covering the market for seven years. He has been writing for Investor Place since 2019.