Tokers & Jokers | Cannabis Stocks Start the Week Strong

US and Canadian cannabis stocks were largely on the rise Monday, with only a handful of stocks ending the day in the red.

Last week Ohio-based Green Growth Brands (OTCMKTS: GGBXF) (CSE: GGB) initiated a formal hostile takeover offer for Aphria Inc (NYSE: APHA). The deal however, is riddled with unorthodox terms, including an agreement to pay All JS Greenspace LLC — a company helping finance the capital-raise to acquire Aphria — a commitment fee of $7.5 million if the deal does not go through. Analyst Dmitry Zaytsev revealed last week that Aphria’s subsidiary GA Opportunities is the largest shareholder in Green Growth Brands, holding a 10% stake. Further, the two companies have had several dealings in the past, leaving some wondering if this is truly a hostile takeover offer.

Green Growth closed down 5.14% on the OTC at $4.05.

Aphria was recently implicated in a class action lawsuit for insider self dealing at the cost of shareholders. A number of the company’s Latin American assets were allegedly purchased at a significant markup to benefit insiders. The Schall Law Firm encourage investors who purchased Aphria shares between between July 17, 2018 and December 4, 2018 to contact the firm before February 4, 2019.

Aprhia ended the day up 2.93% at $7.37.

Jim Cramer recommended Cronos Group (NASDAQ: CRON) as his second favorite cannabis pick, noting the company’s recent strategic partnership with Alrtia and its strong management team. Divergent sale prices have resulted in Cronos surpassing Tilray as the most expensive stock, trading at 266x versus Tilray at 155x EV / revenue. Last week CIBC endorsed Cronos as a likely winner in the global cannabis market. Cronos was up a whopping 15.36% at the end of trading at $18.48.

Canopy Growth Corp. (NYSE: CGC) has a lot going on! In the last three weeks Canopy Growth is up more than 75% reflecting the stream of positive news for the company. The stock is overbought in the near term — investors should tread lightly. Last week Piper Jaffray raised the stock’s target price from $40 to $60 and reiterated their “overweight” rating on the company. CIBC also gave the company a bullish endorsement, calling Canopy the cannabis industry’s best chance at a global titan. The company closed up 4.77% and was trading at $50.77.

Organigram Holdings Inc. (OTCMKTS: OGRMF) (CVE: OGI) announced its first quarter financial results for fiscal 2019. The company reported a net revenue of $12.4M — up 287% sequentially quarter-over-quarter. Revenue adjusted for excise tax and returns rose 419% in the year-ago period. The company is entering into a class action lawsuit for cannabis that was produced between Feb. 1 and Dec. 16, 2016. Organigram is accused of using unauthorized pesticides. Organigram climbed a massive 18.03% on the OTC and was trading at $5.31.

Last week Matt Bottomley, director of equity research and cannabis analyst with Canaccord Genuity Group, announced Curaleaf Holdings (OTCMKTS: CURLF) (CSE: CURA) as his top stock-pick of the year. Effective today, Curaleaf has appointed Neil Davidson as Chief Financial Officer and Todd Goffman as General Counsel and Secretary. The company also recently became a member of the New Jersey Business & Industry Association as the first cannabis company to join the 20,000 member organization. The company was trading up 1.82% at $6.17.

Last week Zacks gave Tilray (NASDAQ: TLRY) a “Hold” rating. Privateer Holdings — currently holding 88% of Tilray’s outstanding shares — recently issued a press release pledging not to sell shares of Tilray. The pledge doesn’t seem to have lasted long however, with Tilray CEO Brendan Kennedy, who serves as the Executive Chairman of Privateer, sold over 149K shares worth $11M of his personal stock. Tilray announced last week that it intends to acquire Natura Naturals Holdings Inc. for CA$35M (about $26.3M) — a maneuver that will double the company’s production capacity. Tilray shares were up 8.73% and trading at $81.93.

Last week The Green Organic Dutchman Holdings Ltd. (OTCMKTS: TGODF) (TSE: TGOD) announced the Ontario Superior Court of Justice approved its spin-off of subsidiary TGOD Acquisitions Corp — an investment firm focused on the Canadian and international cannabis industry. Monday the company announced it is expanding its international footprint and is awaiting a license for the production of medicinal cannabis in Greece. The Green Organic Dutchman was trading up on the OTC by 7.07% at $3.02.

Innovative Industrial Properties Inc. (NYSE: IIPR) is a leading provider of real estate capital for the medical-use cannabis industry. The company released its latest investor presentation, announcing the company had $25.6B annual base rent and property management fees. Innovative Industrial was recently given a “hold” rating on Zacks with its current fiscal-year earnings estimated to have risen 1.8% in the last 90 days. Innovative ended the day trading up 2.50% at $61.44.

Market Wealth initiated coverage on Aurora Cannabis (NYSE: ACB) and Cronos Monday. Last week, Aurora announced the closing of a $345M convertible debt offering. CEO Cam Battley reassured investors that the deal would be paid with cash and not dilute company shares. Shares of Aurora climbed 5.65% to $7.10.

Last week Neptune Wellness Solutions (NASDAQ: NEPT) received a “strong buy” rating from Zacks, with a price target of $6.06. Recently the company announced it received its Health Canada licenses in early January and is pushing ahead with commercialization. Neptune lost 0.60% and was trading at to $3.31.

Last week in Davos, Acreage Holdings Inc.’s (OTCMKTS: ACRGF) (CNSX: ACRG.U) CEO Kevin Murphy announced he believed the US will federally legalize marijuana in 2019. Specifically, Murphy argues the STATES Act will be passed in the coming months, which would allow cannabis businesses to operate legitimately, giving them access to bank accounts and the ability to list on US stock exchanges. The company was up on the OTC by 0.55% and trading at $22.07 at the end of the day.

Expected to gain 4.2% in the next quarter, Zacks gave GW Pharmaceuticals (NASDAQ: GWPH) a “hold” rating last week. Zacks provided estimates for GW Pharmaceuticals PLC-‘s earnings with an expected earnings of $2.97 per share for the current quarter. Piper Jaffray also issued estimates for the company at $0.02 EPS for Q3 2020 and $0.06 EPS for Q4 2020. Piper Jaffray currently lists GW Pharmaceuticals with an “overweight” rating. The company lost 0.35% and was trading at $138.07.

Hexo Corp. (NYSE: HEXO) (TSE: HEXO) began trading on the New York Stock Exchange last week. The company has priced its public offering of 7.7M shares of common stock at the price of CA$6.50 for the gross proceeds of CA$50.05M. The offering closes January 30, 2019. The company ended the day trading up by 2.93% and trading at $5.27.

MedMen Enterprises Inc (OTCMKTS: MMNFF) (CNSX: MMEN) announced Friday that it disposed of 83,592,494 Class B Common Shares of its subsidiary MM Can USA Inc. The company recently denied lawsuit allegations of insider self enrichment and abandonment of fiduciary duties. MedMen was up by 5.83% on the OTC and trading at $3.62.

MJardin Group Inc. (OTCMKTS: MJARF) (CSE: MJAR) received an “underperform” rating from Cornerstone Investments due to the company’s focus on cultivation in Colorado — technically the least attractive business model in the least attractive US market. With a 70% plunge since its reverse takeover in November, the company has had one of the worst performances among new listings. The company recently had its common stock upgraded to the OTCQX Best Market. Mjardin gained 2.71% and was trading at $2.99.

Zacks Investment Research recently downgraded KushCo Holdings Inc. (OTCMKTS: KSHB) to a “Sell” rating. Recently Nicholas Kovacevich, KushCo’s Chairman sold 200,000 shares of the company for a total value of $1.208B. Kushco was trading up 0.92% at $5.47.

Russell Stanley of Beacon Securities initiated coverage on Trulieve Cannabis Corp. (OTCMKTS: TCNNF) (CSE: TRUL) last week giving the company a “buy” recommendation. Stanley gave the company a CA$28.00 price target with a projected return of 93%. Last Friday, about 98 million shares of the company were unlocked, representing 89% of Trulieve’s outstanding shares. The company announced that approximately 75.5M subordinate voting shares held by the company’s founders won’t be sold prior to July 25, 2019. Trulieve was trading up 7.10% on the OTC at $10.50.

Cresco Labs (OTCMKTS: CRLBF) (CSE: CL) announced today the appointment of Tom Manning as Chairman of the Board of Directors. Manning is the CEO of Dun & Bradstreet, a global corporate information provider and data analytics company. Cresco was up 4.42% on the OTC and trading at $6.73.

Auxly Cannabis Group Inc. (OTCMKTS: CBWTF) was recently granted an “outperform” rating from AltaCorp. Auxly and FSD Pharma Inc (CSE:HUGE) (OTCQB: FSDDF) are currently developing the world’s largest indoor hydroponic cannabis production and processing facility. FSD Pharma Inc recently hired Rupert Haynes, a previous executive from GW Pharmaceuticals as the company’s new CEO.

Auxly was up 1.90% with a price at $0.73.

FSD Pharma (OTCMKTS: FSDDF) was trading up on the OTC by 4.96% at $0.24.

iAnthus Capital Holdings (OTCMKTS: ITHUF) announced it has signed a definitive agreement with Curative Cannabis to acquire 46% of Curative’s common shares. The two companies will enter into a long-term cannabis purchase and sale agreement to fund Curative’s cannabis cultivation facility in Chatham-Kent Ontario. Northland Capital Markets recently initiated coverage on the company with an “outperform” rating and a $9.50 price target. iAnthus gained 7.14% and was trading at $5.19.

The Israel government has approved the export of medicinal cannabis and that’s good news for Namaste Technologies Inc. (OTCMKTS: NXTTF) (TSXV: N). The company has a ten percent stake in Cannbit Ltd., an Israel-based cannabis producer, as well as a collaboration and supply agreement to purchase medical cannabis from Cannbit. Namaste climbed 1.71% on the OTC and was trading at $1.15.

MariMed Inc (OTCQB: MRMD) recently announced that it is forming MariMed Hemp Inc. as a subsidiary that will handle hemp-derived CBD product branding and production. MariMed closed the day down 1.13% at $4.80.

MediPharm Labs (TSXV: LABS) (OTCQB: MLCPF) lost 0.68% on the OTC and was trading at $1.46 at the close of trading.

TerrAscend Corp (CSE: TER) (OTCMKTS: TRSSF) climbed 4.52% closing out the day at $6.25 on the OTC.

Last week Sunniva Inc (CSE: SNN) (OTCQB: SNNVF) announced a $10M non-brokered offering to provide working capital in response to a high demand for Sunniva products. The company was trading up 5.19% at $3.58.

CannTrust Holdings Inc. (OTCMKTS: CNTTF) (TSX: TRST) recently announced it has filed an application to list on the NYSE. CannTrust is also moving to Phase III construction of its Town of Pelham facility. CannTrust climbed 3.40% on the OTC, trading at $7.10.

Ranked as the second best-performing stock on the OTCQX Best Market, Origin House (OTCMKTS: ORHOF) (CNSX :OH) had a return of 58.9% in 2018. The company announced today that it has signed an exclusive agreement with Viola to produce, package, and sell all Viola products in California. The company was trading up 4.26% and trading at $7.10.

Aegis analyst Rommel Dionisio doubled his price target for New Age Beverage Co. (NASDAQ: NBEV) from $4 to $8. Dionisio reiterated his “buy” rating on the stock. ValuEngine also upgraded the stock from a “hold” position to a “buy” rating. New Age saw a gain of 7.41% Monday and was trading at $7.10.

Horizons ETFs Management Canada Inc. (TSE: HMMJ) announced a change to the risk rating of the Horizons China High Dividend Yield Index ETF (“HCN“), from “medium high” to “medium”. Last week, Horizon’s announced the launch of the Horizons Equal Weight Canada REIT Index ETF (“HCRE”) and the Horizons Equal Weight Canada Banks Index ETF (“HEWB”). HMMJ gained 5.85% and was trading at $19.90.

The Horizons Marijuana Life Sciences Index ETF (OTC: HMLSF) gained 5.63% and trading at $15.00.

ETFMG Alternative Harvest ETF (NYSEARCA: MJ) The ETF was trading up 5.62% at $33.80.

The North American Marijuana Index tracks the leading cannabis stocks in the US and Canadian Sectors. The Index climbed 4.28% and was trading at $283.34.

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