Tokers & Jokers | Cannabis Stocks Mixed Thursday

Thursday was sluggish for most US and Canadian cannabis stocks who seem to be working off yesterday’s bearish hangover.

Wednesday Aphria Inc (NYSE: APHA) formally rejected Green Growth Brands (OTCMKTS: GGBXF) (CSE: GGB) hostile takeover. Aphria issued a press release accusing Green Growth of preying on Aphria in a time when the company was “undervalued” due to December’s short attack. Further Aphria argued that GGB was an illiquid company, with a limited operating history, and no track record in the cannabis industry. This brings into question Aphria’s stake in Green Growth Brands’ subsidiary Green Acres — the second largest owner of Green Growth and a company Shawn Dym and Vic Neufeld are members of. Green Acres was funded over CA$30M by Aphria in the first fiscal quarter. Why would Aphria fund a company that it insists has no track record? Further why would Aphria fund a company that would implicate it in hostile takeover?

Green Growth announced Thursday that it has executed a licensing agreement with Authentic Brands Group and the Greg Norman brand for the creation of CBD infused personal care products. The deal includes a supply agreement with Tilray who will provide the CBD. Last week Green Growth appointed Brian Logan, CPA, as its new Chief Financial Officer. The company also announced that it was entering the Arizona cannabis market, executing a $12.35M arms length acquisition of ZLJT LLC & Arizona Natural Pain Solutions Inc, dba “Desert Rose”. Green Growth closed was up 7.02% on the OTC at $4.42.

Aphria released a circular Wednesday which revealed several ties to Green Growth Brands, including multiple previous private negotiations regarding Green Growth’s acquisition of Aphria.

After soaring a whopping 47% earlier this week, Aphria officially recovered all losses from the December short seller attack launched by Hindenburg Research. The company has still not published a rebuttal to the accusations. Short seller Andrew Left of Citron Research announced Friday that he was now taking profits in Aprhia.

Aphria’s winning streak came to a halt Tuesday morning as the company lost more than 11% at the start of trading. Wednesday the stock plummeted over 7% after the company rejected Green Growth’s bid. The company ended the day down 1.34% at $9.57.

Thursday morning, Fundamental Markets its latest key findings on Cronos Group (NASDAQ: CRON). After skyrocketing more than 110% year to date, GMP Securities’ Martin Landry downgraded the company from a “hold” rating to a “buy” rating and reiterated a price target of $18 Tuesday. That’s a 21% downslide from its current position. Citron’s Andrew Left announced he took a short position in the company last Friday. Left tweeted that Cronos was trading 70% higher than the average analyst target price. Cronos was up 9.01% at the end of trading at $21.42.

Good things are brewing at Canopy Growth Corp. (NYSE: CGC)! In January, after securing a license, the Canadian cannabis company invested $100M to produce and process hemp in New York. Now the company is investing an additional $500M in US hemp by adding hemp production in Rhode Island and two other states. Recently Canopy completed a $3M strategic investment in 48North to support its continued expansion. The company is expected to release its quarterly earnings report on February 14, 2019 with expected revenues of CA$84.98M. Recently CIBC reiterated their “outperform” rating on the company, with a price target of CA$65. According to data provided by the S&P Global Market Intelligence, Canopy gained 82.3% in January. Piper Jaffray raised the company’s price target to $60 per share last week. Canopy closed up 0.86% and was trading at $46.93.

Canopy Growth’s spin-off company, Canopy Rivers Inc. (TSXV: RIV) (OTCMKTS: CNPOF) announced an $85M equity offering Monday. Details of the offering include a $55M bought deal with CIBC and Eight Capital, as well as an additional share purchase of at least $30M from Canopy Growth. Canopy Rivers also announced that it has completed a $17.4M equity investment in its portfolio company Canapar Corp. The investment will give Canopy Rivers the opportunity to capitalize on the Italian and European CBD markets. Canopy Rivers gained a staggering 94% in the month of January. The company closed the day down 4.70% at $3.47.

Organigram Holdings Inc. (OTCMKTS: OGRMF) (CVE: OGI) announced the company is expanding its production facility by adding additional grow rooms. The expansion will more than triple the company’s annual production capacity to 113K kilograms once completed. Last week the company gained a whopping 32.27%. Beacon Securities raised their full year 2019 earning estimates for Organigram, projecting the company will earn $0.34 per share for the year. Beacon issued a “buy” rating on the stock and a $12.00 price target. Recently the company announced it was no longer seeking M&A deals in the Canadian market, rather the company has turned its focus on the European market.

Organigram lost 1.03% on the OTC and was trading at $5.31.

Haywood Capital Markets initiated coverage on Valens GroWorks Corp. (CSE: VGW) (OTC: VGWCF), giving the company a “buy” rating and a target price of CA$5.25. Currently the company is expanding its production capacity to 150K kilograms annually. Recently Analysts at Mackie Research gave the company a “buy” recommendation with a price target of $4.50. AltaCorp initiated coverage on Valens last month, giving the company an “outperform” rating and a price target of $5. The company lost 3.13% on the OTC and was trading at $1.97.

Of the three analysts that cover Curaleaf Holdings (OTCMKTS: CURLF) (CSE: CURA), two have “strong buy” recommendations, and one gives the company a “buy” rating. In December Canaccord issued a “buy” rating with a price target of $9.00. The company now has an average price target of CA$16.67, an 83.8% upside potential. With a market cap that’s closing in on $3B, Curaleaf is quickly becoming one of the fastest growing cannabis retail brands in the US. The company has 42 dispensaries, 12 cultivation sites, and 10 processing facilities across 12 states. The company expects to operate 70 dispensaries in 13 states by the end of the year. Last week the company announced the new executive appointments of Neil Davidson as Chief Financial Officer and Todd Goffman as General Counsel and Secretary. The company was trading up 5.53% at $7.25.

Analysts have given Zynerba Pharmaceuticals Inc (NASDAQ: ZYNE) an average 12-month price target of $16.40, representing a 219.0% upside. Zynerba announced the company’s CEO Armando Anido will present at the 2019 BIO CEO and Investor Conference on February 11,2019. Analysts reiterated their consensus call at 0 for Zynerba. The company was given two buy recommendations and a hold rating. Zynerba sits at 1.8 on the Rueter’s scale, indicating a “buy” consensus from the analyst community. The company has an average “hold” rating from analysts, and a consensus price target of $15.88. Zynerba is on track to announce the results of its cannabidiol gel treatment for children and adolescents with Fragile X Syndrome in the second half of 2019. The company gained 4.28% and was trading at $5.36.

Green Growth Brands announced Thursday that it’s partnering with Tilray (NASDAQ: TLRY) and Authentic Brands to bring cannabis infused products to US markets. Tilray also announced the expansion of its global senior leadership team with the appointment of Sascha Mielcarek as Managing Director of European Operations. Analysts average recommendation for the company sits at a 2.5 (“hold”) on the FINVIZ 1 through 5 scale. Last week Zacks gave the company a “hold” rating. Company insiders recently issued a statement promising the public that they would not sell off Tilray shares. Following that press release, Tilray CEO Brendan Kennedy and CRO Edward Wood Pastorius, Jr. sold a combined total of 170,494 shares worth approximately $12.65M. Tilray has not issued a statement regarding the sale of shares. The company is up more than 250% in the last six months according to CNBC. Tilray shares gained 2.35% and were trading at $79.99.

The Green Organic Dutchman Holdings Ltd. (OTCMKTS: TGODF) (TSE: TGOD) issued an announcement regarding the distribution of unit purchase warrants of SpinCo. The company has mailed an election form to all TGOD registered shareholders, as per its arrangement with SpinCo. Recently TGOD announced their JV partner Knud Jepsen was recently granted initial cannabis business authorization by the Danish Medicines Agency. Last week the company announced the implementation of design improvements to their facilities in Hamilton, Ontario and Valleyfield, Quebec that are currently under construction. The design improvements will increase TGODs production capacity from 156,000 kilograms to 202,500 kilograms. The company was trading up on the OTC by 1.08% at $2.59.

Compass Point rated Innovative Industrial Properties Inc. (NYSE: IIPR) as a “buy” with a price target of $70. Currently IIPR is trading 37% higher than the 100-day moving average price of $47.82. However the company’s 14-day RSI is at 76 pushing the stock into overbought territory.  The company soared 36.4% in the month of January and a whopping 153.4% since Feb. 5, 2018. IIPR is trading at a premium, according to Zacks, who gave the company a “hold” rating last week. The company recently announced the acquisition of a 75K square-foot facility on a ten-acre property in Barry Illinois. Innovative ended the day trading down 1.00% at $62.33.

Aurora Cannabis (NYSE: ACB) has recorded a 52.62% uptrend since the first of the year. Currently 2 out of 4 Wall St. analysts have issued “buy” ratings on the stock. Monday the company announced its extraction technology partner Radient Technologies received its Standard Processing License from Health Canada that will benefit both companies. Last week Aurora surpassed Apple as the most traded stock on the popular trading app Robinhood. The average price target analysts have predicted for Aurora in one year stands at $10.83 per share. That’s about 34.7% from its current position. Analysts rate Aurora as a “buy” with a 0 consensus rating. Reuters tracked four analysts covering Aurora and found 2 have “hold” ratings on the company. The other two have “buy” and “strong buy” ratings. Shares of Aurora are trading at the highest level since November 7, 2018 according to Business Insider. Aurora gained 2.85% and was trading at $7.77.

Neptune Wellness Solutions (NASDAQ: NEPT) is expected to release its third quarter results on Feb. 13, 2019. Roth Capital rated NEPT as a “buy” with a $5 price target last week. The company was also recently given a “strong buy” rating from Zacks, with a 12-month consensus price target of $6.06. Recent filings indicate that insider ownership held 23.51% of the company, while institutional owners held a 17.75% stake. With an average trading volume of 718,640 shares, the company’s trading volume has added an additional 726,153 shares, bringing the total of exchanged shares to 1,444,793 — 2.01x the normal trading volume. The added trading volume has boosted activity from short-term traders per session. Neptune lost 1.42% and was trading at to $3.48.

In March and again in May, Acreage Holdings Inc.’s (OTCMKTS: ACRGF) (CNSX: ACRG.U) lock-up provision will expire, adding pressure to the stock. Recently the company announced it intends to amass 78 medical and recreational dispensaries in 19 states over the next year. On February 7, 2019 Acreage CEO Kevin Murphy will join MJBizDaily’s Investor Intelligence webcast to discuss why the size of cannabis firms should matter to investors. Acreage was up on the OTC by 0.47% and trading at $22.45 at the end of the day.

GW Pharmaceuticals (NASDAQ: GWPH) announced Thursday that the company will release its earnings report for the period that ended Dec. 31, 2018 on February 26, 2019. Founding member of New Cannabis Ventures, Alan Brochstein joined Benzinga to discuss difficulties faced by GWPH. According to Brochstein, short-term volatility is expected. Essentially the company must undergo the arduous process of convincing insurance companies to cover the company’s oral seizure drug, Epidiolex. GWPH was upgraded by investment analysts at ValuEngine from a “buy” to a “strong buy”. The company is expected to release its latest quarterly earnings report in the coming days. Monday the stock saw its Relative Strength Rating rise from 76 to 82.  Last week Zacks reiterated its “hold” rating for the company. GW lost 3.56% and was trading at $139.11.

Hexo Corp. (NYSE: HEXO) (TSE: HEXO) gained a massive 65% in the month of January. The company recently announced it has reached a construction milestone on phase 1 of its one million square foot greenhouse expansion. Last week Hexo closed a $43.3M public offering. The funds will be used for general corporate purposes such as R&D and global growth initiatives. The company ended the day trading up 3.21% and trading at $5.46.

MedMen Enterprises Inc (OTCMKTS: MMNFF) (CNSX: MMEN) announced the sale of three properties to Treehouse Real Estate Investment Trust for the combined total of $18.4M. Former company CFO James Parker filed a lawsuit against the company last week, alleging top executives in the company forced him to “choose between complying with his fiduciary duty to the company and its shareholders or turning a blind eye and a deaf ear to improper and unlawful behavior”. More specifically, Parker accused the CEO of using company resources for his own personal gain. This is the second lawsuit to accuse MedMen of fiduciary abuses launched in the last month. Captor announced it has sold its two MedMen branded retail operations to MedMen for over $31.25M. MedMen gained 0.99% on the OTC and trading at $3.06.

Cornerstone Investment advises investors to take profits in MJardin Group Inc. (OTCMKTS: MJARF) (CSE: MJAR) as they are among the worst performing cannabis stocks in the sector. Recently the company announced it is producing cannabis at roughly $1 per gram. The company entered into a service agreement with security group 3 Sixty Risk Solutions Ltd. (OTC:  PTVYF)(CSE: SAFE) who will provide Mjardin with guarding, equipment monitoring, and secure transport services.

Mjardin gained 7.18% and was trading at $3.35.

3 Sixty also entered into a strategic partnership with Pineapple Express Delivery Inc. to provide secure transport services. The company is also providing Canopy Growth with security under an extended agreement. 3 Sixty gained 3.53% on the OTC and was trading at $0.45.

Recently KushCo Holdings Inc. (OTCMKTS: KSHB) came under scrutiny after the company’s CEO and Director sold significant shares in the company. On January 22 the company issued a registered direct offering of 6.47M shares for $34M. Director Dallas Imbimbo sold 310,826 shares of KushCo January 17, 2019 for 1.78M. Kushco was trading down 3.32% at $5.83.

Beacon Securities’ Russell Stanley reported Trulieve Cannabis Corp. (OTCMKTS: TCNNF) (CSE: TRUL) has 24 dispensaries in Florida and 60% of the state’s sales volume. Stanley projects a 2019 EBITDA of $90.7M for Trulieve, with revenue of $208.7M. The analyst set a price target of CA$28.00 for the company and reiterated his “buy” rating. After nearly a year of litigation the company won a lawsuit alleging the cap on the number of dispensaries permitted for licensed medical marijuana treatment centers was wrongly added by Florida state legislators. Trulieve argued that dispensaries should not be limited due to the Florida Medical Marijuana Legislation Initiative and that doing so was unconstitutional and adversely impacting patients. Trulieve was trading down 2.14% on the OTC at $11.66.

Headset has ranked Cresco Labs’ (OTCMKTS: CRLBF) (CSE: CL) Mindy’s Edibles as the top selling edible in the state of Nevada. Last week, Cresco’s dispensary, FloraMedEx has launched Illinois’ Opioid Alternative Pilot Program. The program expands patient access for those who wish to replace pharmaceutical medications with medicinal cannabis products. Last week the company appointed Tom Manning, CEO of Dun & Bradstreet, as the company’s Chairman of the Board. Cresco was up 3.54% on the OTC and trading at $7.60.

Auxly Cannabis Group Inc. (OTCMKTS: CBWTF) announced it has terminated its JV with FSD Pharma (OTCMKTS: FSDDF) due to contractual breaches and significant concerns over the building’s infrastructure. FSD failed to remedy the concerns and terminated its contract with Auxly. Last week Auxly acquired a 46% stake in Curative Cannabis, agreeing to fund the build-out of an Ontario-based cannabis cultivation facility. The company was also given an “outperform” rating from AltaCorp Capital last week. Auxly was down 6.55% with a price at $0.64.

It is worth noting that FSD has issued a flurry of press releases recently, most of which have little substance. This company is on our radar as a potential risk to investors.

FSD recently announced a letter of intent with Solarvest BioEnergy Inc. to develop an algal-based flexible production platform to produce cannabinoid based health products. FSD was down 16.35% and was trading at $0.22.

In a $1.6B merger, iAnthus Capital Holdings (OTCMKTS: ITHUF) and MPX Bioceutical Corporation (CSE: MPX) (OTC: MPXEF) announced the closing of the agreement whereby iAnthus will acquire all of MPX’s issued and outstanding shares. Beacon Securities analyst Russel Stanley reiterated his “buy” rating and gave the company a price target of a whopping $16.00, implying a 129% return. iAnthus gained 3.62% and was trading at $5.60.

Namaste Technologies Inc. (OTCMKTS: NXTTF) (TSXV: N) announced Monday that the company has terminated CEO Sean Dollinger due to evidence of self-dealing and has commenced legal action against the former executive. The company issued a press release late Tuesday that Dollinger is counter-suing the company. The Board is currently considering all value-maximizing opportunities including the sale of the company. Namaste lost 7.24% on the OTC and was trading at $0.78.

MediPharm Labs (TSXV: LABS) (OTCQB: MLCPF) restructured its management team by appointing Co-founder, Keith Strachan as president. Kirk Binns has been promoted to Executive Vice President and Global Accounts manager. Dr. Chris Talpas has been promoted to Vice President of Quality and Scientific Affairs. Michael Perron has been appointed the Vice President of Business Development. And Laura Lepore has been brought on as the company’s Vice President of Investor Relations & Communications. The company was recently named Canadian Cannabis Start-Up of the Year, announcing revenue of $10M from the month of December. MediPharm gained 1.38% on the OTC and was trading at $1.47.

Sunniva Inc (CSE: SNN) (OTCQB: SNNVF) recently announced changes to the company’s California leadership team. Kevin Wilkerson was promoted to President of Sun CA Holdings, and Mary Patton joined Sunniva as Vice President of Marketing. Last week the firm acquired a new round of financing worth CA$10M via a non-brokered offering of convertible debentures. The company was trading up 1.18% at $3.44.

CannTrust Holdings Inc. (OTCMKTS: CNTTF) (TSX: TRST) had one of its products recalled under the brand “Liv” for improper labeling. The box indicated the product was pure CBD oil, however contained THC. Only the exterior box was mislabeled, the bottle itself had the correct label. CannTrust gained 1.22% on the OTC, trading at $7.58.

Origin House (OTCMKTS: ORHOF) (CNSX :OH) announced the the company has entered into an agreement to provide Humboldt’s Finest with strategic financing of $704K. Humboldt’s Finest is an alliance of farms in Humboldt county which produce and process products exclusively for Origin House to distribute. The company was trading up 0.90% at $6.50.

Over 6 million previously locked up shares of New Age Beverage Co. (NASDAQ: NBEV) poured into the market Wednesday. According to White Diamond Research, NBEV has burned through most of its cash raise from a non-core acquisition and expects the company to initiate more rounds of equity financing in the near future. The company was recently upgraded to a “buy” from BidaskClub. NBEV gained a whopping 36.7% in January according to S&P Global Market Intelligence. The company announced mid January that it intends to develop and distribute Bob Marley branded CBD infused beverages. According to Zacks the company is expected to announce $14.06M in sales for the current fiscal quarter. Average analyst expectations project New Age Beverage to post full-year sales of $52.23M for the current financial year. The company was down 3.68% and was trading at $6.54.

The Supreme Cannabis Company Inc. (OTCMKTS: SPRWF) (TSX: FIRE) Monday the company began listing on the Toronto Stock Exchange. Supreme plans to release its second quarter earnings report on February 12, 2019 for the three-month period that ended on December 31, 2018. The company’s subsidiary 7Acres announced Thursday that it has entered into a supply agreement with the New Brunswick Liquor Corporation to supply cannabis to its retail stores. 7Acres recently received approval from Health Canada for an additional 30K square feet of production space. The additional space will boost Supreme’s production capacity by 32%. Supreme was trading up 3.12% on the OTC at $1.65.

According to Zacks, analysts expect Amyris Inc. (NASDAQ: AMRS) to post $100.76M in sales for the current fiscal quarter. The company announced a $255M binding term sheet for a planned cannabinoid facility, licensing, and commercialization partnership this week. The confidential partner will receive payments linked to milestones that are expected over the next 12-36 months. Amyris was trading down 0.55% at $5.45.

Chairman Emeritus and Chief Brand Strategist at Level Brands (NYSE: LEVB) was recently appointed to the board of the NFL Players Inc — the licensing and marketing arm of the NFL Players Association. In December the company acquired North Carolina-based cbdMD. cbdMD was recently featured in Elle Magazine as the first national CBD oil advertiser. Level Brands was down 5.15% and trading at $4.60.

Tetra Bio-Pharma Inc. (OTCMKTS: TBPMF) (CSE: TBP) lost more than 20% Tuesday after the company announced it had suspended its phase 3 clinical program due to impurities found in the drug being administered to patients. Recently Tetra received a patent for its PPP001 drug pellet. According to the company, when PPP001 is smoked it has certain medicinal properties that are not present when vaporized. Tetra’s research has uncovered that vaping creates different cannabinoid profiles. The company was trading up 3.46% and trading at $0.60.

Green Thumb Industries Inc. (OTCMKTS: GTBIF) (CSE: GTII) announced the acquisition of For Success Holding Company the owner of California luxury cannabis firm Beboe. The acquisition will add a lifestyle brand, talent, and entry into the California market. Green Thumb was up 0.26% and trading at $11.58.

Horizons ETFs Management Canada Inc. (TSE: HMMJ) gained 1.70% and was trading at $20.89.

The Horizons Marijuana Life Sciences Index ETF (OTC: HMLSF) gained 0.76% and trading at $15.70.

ETFMG Alternative Harvest ETF (NYSEARCA: MJ) recently announced a 59.2% increase in short interest. According to FINRA MJ’s total short interest was 1.66M shares in February. The ETF was trading up 1.65% at $35.22.

The North American Marijuana Index tracks the leading cannabis stocks in the US and Canadian Sectors. The Index lost 1.32% and was trading at $279.90.

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