US and Canadian cannabis stocks were largely down Monday in anticipation of Aurora’s quarterly earnings report.
Last Friday Aphria Inc (NYSE: APHA) appointed Brett D. Marchand as the Senior Vice President of Supply Chain effective today February 11, 2019. According to CBC, Aphria has now been implicated in two class-action lawsuits for inadequate disclosures regarding the company’s acquisition of its Colombian, Argentinian, and Jamaican assets. Allegations against Aphria were first launched in December 2018 by Quintessential and Hindenburg Research who issued a short seller report detailing accusations of fraud and insider dealing. In the days following the report Aphria lost nearly 30%. In early February Aphria recovered all losses, however last Wednesday Aphria formally rejected Green Growth Brands (OTCMKTS: GGBXF) (CSE: GGB) hostile takeover. The stock plummeted.
It seems Aphria shareholders were looking forward to a change of management considering the serious allegations and now marred reputation of the company. It is still unclear when CEO Vic Neufeld or co-founder Cole Cacciavillani will step down.
Aphria ended the day trading down 11.13% at $8.38.
Green Growth issued a press release today announcing that it has entered into an agreement with the Simon Property Group that will give the company access to 108 locations in US malls where it plans to distribute CBD product lines. Last Thursday, Green Growth announced the execution of a licensing agreement with Authentic Brands Group and the Greg Norman Brand for the manufacturing of CBD personal care products. The deal includes a supply agreement with Tilray who will provide the CBD. Green Growth ended the day trading down 0.98% on the OTC at $4.30.
Cronos Group (NASDAQ: CRON) has had an impeccable run since September rising from $6 to over $20 last week. 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. Recently Citron’s short seller Andrew Left announced he took a short position in the company. Cronos was down 0.56% at the end of trading at $19.44.
Canopy Growth Corp. (NYSE: CGC) has been on a rampage recently, funding several of its partners in their expansion efforts. The company is expected to release its quarterly earnings report on Thursday with expected revenues to exceed $63M according to The Street. 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. Canopy recently completed a $3M strategic investment in 48North to support its continued expansion. Canopy closed down 5.54% and was trading at $42.94.
Last week Canopy Rivers Inc. (TSXV: RIV) (OTCMKTS: CNPOF), Canopy Growth’s spin-off company, announced an $85M equity offering. 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. The company closed the day up 3.38% at $3.36.
Organigram Holdings Inc. (OTCMKTS: OGRMF) (CVE: OGI) issued its Q1 2019 earnings report today. The company reported $12.4M in net sales, a 287% upside from the previous quarter. Last week Organigram announced the expansion of its production facility. The expansion will more than triple the company’s annual production capacity to 113K kilograms once completed. Organigram gained 3.69% on the OTC and was trading at $5.16.
Valens GroWorks Corp. (CSE: VGW) (OTC: VGWCF) received a bullish write up from The Street recently, noting AltaCorp’s “outperform” rating on the stock. Last week Haywood Capital Markets initiated coverage on Valens, giving the company a “buy” rating and a target price of CA$5.25. The company has secured extraction supply agreements with both Canopy Growth and Organigram Holdings. Currently the company is expanding its production capacity to 150K kilograms annually. Valens lost 1.01% on the OTC and was trading at $1.97.
Zynerba Pharmaceuticals Inc (NASDAQ: ZYNE) has gained 20.47% according to Zacks who issued a “buy” rating on the company. Analysts have given the stock an average 12-month price target of $16.40, representing a 219.0% upside. Zynerba’s CEO Armando Anido is scheduled to present at the 2019 BIO CEO and Investor Conference today. The company has an average “hold” rating from analysts, and a consensus price target of $15.88. The company lost 1.33% and was trading at $5.19.
Tilray (NASDAQ: TLRY) is scheduled to issue its Q4 2018 earnings report tomorrow. According to Yahoo Finance in Tilray’s last quarterly report the company exceeded earnings expectations by nearly 43%. Last week Tilray teamed up with Green Growth Brands 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. Zacks currently has a “hold” rating on the stock. Tilray shares lost 4.82% and were trading at $75.42.
The Green Organic Dutchman Holdings Ltd. (OTCMKTS: TGODF) (TSE: TGOD) announced last week that it has secured a supply agreement with the Ontario Cannabis Retail Corporation. The company was trading down on the OTC by 5.88% at $2.40.
Last Friday Innovative Industrial Properties Inc. (NYSE: IIPR) announced the acquisition of its first California property in Sacramento. The 43,000 square-foot facility spreads IIPRs footprint across ten states. The company also recently announced the acquisition of a 75K square-foot facility on a ten-acre property in Barry Illinois. Innovative ended the day trading up 3.51% at $66.57.
Aurora Cannabis (NYSE: ACB) is expected to release its fiscal second-quarter earnings report after the bell today. Aurora is expected to report a loss of $0.06 per share with revenue expected to quadruple to over $51M. The company announced it has exported its first shipment of cannabis oil to the UK. Aurora lost 4.91% and was trading at $7.17.
Wednesday Neptune Wellness Solutions (NASDAQ: NEPT) is expected to release its third quarter results. 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. Bidask Club downgraded Neptune from a “hold” rating to a “sell” rating Saturday morning. Neptune lost 3.67% and was trading at to $3.41.
Acreage Holdings Inc.’s (OTCMKTS: ACRGF) (CNSX: ACRG.U) John Boehner has formed a new cannabis lobbying effort called the National Cannabis Roundtable. The aim of their lobbying efforts is to reform marijuana taxation and legalization. Recently the company announced it intends to amass 78 medical and recreational dispensaries in 19 states over the next year. Acreage was down on the OTC by 5.78% and trading at $20.71 at the end of the day.
GW Pharmaceuticals (NASDAQ: GWPH) The company is scheduled to release its earnings report for the period that ended Dec. 31, 2018 on February 26, 2019. Monday the stock saw its Relative Strength Rating rise from 63 to 85. According to Investors Business Daily GWPH is building a cup without a handle with a buy point at $179.75. Last week Zacks reiterated its “hold” rating for the company. GW lost 1.51% and was trading at $144.55.
According to La Presse Hexo Corp.’s (NYSE: HEXO) (TSE: HEXO) Vincent Chiara is pursuing legal action against Stockhouse users for defamation. The comments were removed by Stockhouse. Chiara is now asking the courts to compel the ISPs to reveal the user identities. The company gained a massive 65% in the month of January. The company ended the day trading down 3.75% at $5.13.
The New York Medical Cannabis Industry Association is distancing itself from MedMen Enterprises Inc (OTCMKTS: MMNFF) (CNSX: MMEN) after insiders of the company were accused of making of sexist and racist remarks. The association is also highly concerned about financial corruption among MedMen’s top executives. Former company CFO James Parker filed a lawsuit against the company recently, 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”. This is the second lawsuit to accuse MedMen of fiduciary abuses launched in the last month. MedMen lost 6.17% on the OTC and was trading at $2.82.
KushCo Holdings Inc. (OTCMKTS: KSHB) announced today that the company is restructuring its executive leadership team. Effective March 1, 2019 Jim McCormick will be stepping down from his position as the company’s COO and will be replaced by Rodrigo de Oliveira. Oliveria is being promoted from Vice President of Operations and will serve as interim COO. The company’s president Jason Vegotsky is being promoted to Chief Revenue Officer, and Carmen Lam, who is the company’s Regional Sales Director is being promoted to Senior Vice President. Kushco was trading up 1.17% at $6.04.
Last week 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 just 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 was trading down 2.30% on the OTC at $11.92.
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. FSD issued a press release denying the allegations. Auxly was given an “outperform” rating from AltaCorp Capital recently. Auxly was down 1.84% with a price at $0.56.
It is worth noting that FSD has also fired its recently hired CEO from GW Pharmaceuticals. The company 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. The company made a $1.5M investment in Pharmastrip Corp. under an agreement to produce cannabis-infused oral thin-film-strips. FSD was down 2.27% and was trading at $0.22.
Last week, 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 lost 3.37% and was trading at $5.45.
Namaste Technologies Inc. (OTCMKTS: NXTTF) (TSXV: N) announced Monday that the company has terminated CEO Sean Dollinger due to evidence of self-dealing. Canada News Wire issued a correction stating that Namaste has not brought legal action against Dollinger. According to the Globe and Mail Dollinger is disputing the company’s dismissal and is seeking an injunction to retain his role as CEO. The company issued a press release last Tuesday that Dollinger is counter-suing the company. Namaste lost 10.47% on the OTC and was trading at $0.77.
New Age Beverage Co. (NASDAQ: NBEV) is expected to release its quarterly earnings report on Wednesday. Over 6 million previously locked up shares of NBEV poured into the market last week. 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 gained a whopping 36.7% in January according to S&P Global Market Intelligence. 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 2.20% and was trading at $6.22.
The Supreme Cannabis Company Inc. (OTCMKTS: SPRWF) (TSX: FIRE) Last Monday the company began listing on the Toronto Stock Exchange. Supreme plans to release its second quarter earnings report on Tuesday for the three-month period that ended on December 31, 2018. The company’s subsidiary 7Acres announced last Thursday that it has entered into a supply agreement with the New Brunswick Liquor Corporation to supply cannabis to its retail stores. The agreement will expand Supreme’s footprint into New Brunswick and Saskatchewan, upping the company’s provincial count from 6 to 8. Supreme was trading down 0.68% on the OTC at $1.45.
Today Amyris Inc. (NASDAQ: AMRS) announced the appointment of Oreste Fieschi as President of Sweeteners & Ingredients. According to Zacks, analysts expect the company to post $100.76M in sales for the current fiscal quarter. Amyris announced a $255M binding term sheet for a planned cannabinoid facility, licensing, and commercialization partnership last week. The confidential partner will receive payments linked to milestones that are expected over the next 12-36 months. Amyris was trading down 12.11% at $5.01.
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 gained 6.76% and trading at $4.74.
Horizons ETFs Management Canada Inc. (TSE: HMMJ) lost 2.95% and was trading at $19.75.
The Horizons Marijuana Life Sciences Index ETF (OTC: HMLSF) lost 2.99% and trading at $14.88.
ETFMG Alternative Harvest ETF (NYSEARCA: MJ) was trading down 2.33% at $33.53.
The North American Marijuana Index tracks the leading cannabis stocks in the US and Canadian Sectors. The Index lost 1.81% and was trading at $270.74.