Tuesday was mixed for US and Canadian cannabis stocks with many companies largely on the decline.
Aphria has been in the spotlight since December when a short seller report accused the company of insider self dealing at the cost of shareholders. The company purchased certain Latin American assets that, according to the report, were essentially worthless. In response to the allegations Aphria launched an internal investigation. Last Friday, Aphria issued the results of that independent investigation which acknowledged conflicts of interest. According to the investigation, compared to similar high-cost cannabis sector acquisitions, Aphria purchased its Latin American assets within an acceptable price range, though on the high end. Additionally, Vic Neufeld and Cole Cacciavillani will be retiring from Aphria. In January the two announced they would be stepping down from their positions with the company however remain directors. Due to revelations in the report, Both Neufeld and Cacciavillani will be retiring from Aphria effective March 1, 2019. Unfortunately, the two will still serve in a special advisory capacity.
Last Wednesday Green Growth announced the opening of its first Seventh Sense CBD shop in Fayette Mall in Lexington, Kentucky. The company recently signed an agreement with Simon Property Group to open 108 CBD retail locations in malls across the US. In conjunction with its new retail location, Green Growth also launched an ecommerce site, ShopSeventhSense.com, which will allow the company to broadly distribute its new CBD personal-care product line.
On February 21st Cronos Group shareholders will put Altria Group’s $1.8B investment to a vote. If approved, which is expected, the deal will solidify the first tobacco-cannabis relationship in the sector. Assuming shareholders agree to the partnership, Altria will acquire a 45% stake in the canna firm, with the option to boost that stake to 55%.
Last Thursday Canopy Growth issued its quarterly earnings report reflecting a 282% year-over-year upshot in revenue. Friday the stock gained 4% and is now up nearly 80% this year, according to CNN. Benchmark analyst Mike Hickey rated Canopy a “buy” with a price target of $75 — 38% higher than where the stock currently sits.
Tuesday Organigram Holdings released a fully immersive, 360-degree, virtual tour of its Moncton, New Brunswick campus. The tour showcases Organigram’s three-tiered indoor cultivation facility, giving investors and customers insight to the production process. Last week the company issued its Q1 fiscal 2019 earnings report. According to the earnings report Organigram’s sales increased 287% due to legalization in Canada. The company expects sales to nearly double Q2 fiscal 2019 — projecting nearly $25M in sales.
Last week Valens GroWorks announced that it has boosted its extraction capacity to 240,000 kilograms annually. The company recently received a bullish write up from The Street, noting AltaCorp’s “outperform” rating on the stock. The company has been very active this year, with two extraction deals executed in January.
According to Zacks, who issued a “buy” rating on the company, analysts have given Zynerba Pharmaceuticals an average 12-month price target of $16.40, representing more than a 200% upside. Zynerba is on track to report results from its clinical study of CBD used in the treatment children and adolescents with Fragile X Syndrome. The company also completed enrollment in its Phase 2 clinical trial for epileptic encephalopathy and expects to report results in the third quarter of 2019.
Tilray closed the acquisition of Natura Naturals Holdings today — a deal that will boost Tilray’s production capacity by a minimum of 155K square feet. Going forward Natura Naturals will be renamed High Park Gardens. Tilray also announced today that it will release its fourth quarter and full fiscal 2018 earnings report on March 18, 2019 after market close.
Zacks has rated Innovative Industrial properties a “buy” and projects the company’s earning growth for the current year to be 64.2%. Standard and Poors announced last Thursday that it will include IIPR in its 600 SmallCap Index this week. Innovative Industrial Properties recently announced that its subsidiary IIP Operating Partnership LP has commenced a $100M private placement.
Aurora Cannabis issued its quarterly earnings report last week, nearly quadrupling its revenues. The company’s gains came with some significant costs however — Aurora disclosed quarterly losses of CA$237.8M on revenues of CA$54.2M. The company reported that some of its losses were due to inefficiencies and shrinking margins.
Last week Neptune Wellness announced its Q3 earnings report for the period that ended December 31, 2018. The company reported quarterly revenues of $6.5M and a net loss of $3.7M. Recently Roth Capital rated NEPT as a “buy” with a $5 price target.
Acreage Holdings is adding more muscle to its management arsenal. The company announced the appointment of Stacey Kawahata as the Vice President of Consumer Insights and Brand Strategy, and Joen Choe as Vice President of Marketing. Currently the company is facing difficulties opening its Sterling Massachusetts dispensary. Town officials are reluctant to change zoning laws which would allow the company to produce recreational marijuana products. Last week Acreage Holdings’ John Boehner has formed a new cannabis lobbying effort called the National Cannabis Roundtable. The aim of the Roundtable is to reform marijuana taxation and legalization.
GW Pharmaceuticals announced last week that Alzheimer’s Research UK will be sponsoring a clinical trial of the GW’s newly developed pharmaceutical Sativex. GW hopes to successfully treat symptoms of dementia and alzheimer’s including agitation and aggression. 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.
Today Oppenheimer analyst Rupesh Parikh initiated coverage on Hexo Corp, giving the company an “outperform” rating and a price target of $7 — an 18% upshot from the stocks current position. Last week Hexo and its partner Molson Coors announced the launch of their new cannabis-infused beverages is scheduled for the fall.
MedMen has been met with a lot of adversity recently. The New York Medical Cannabis Industry Association is distancing itself from MedMen Enterprises 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. According to Marijuana Business Daily, MedMen may also lose its flagship store in West Hollywood. Further the lawsuit allegations have the potential to interfere with MedMen’s Massachusetts cannabis license application. According to the Boston Globe, the Cannabis Control Commission will review the company’s lawsuits and recent press surrounding the company. The CCC will then determine if the company is suitable to hold a state cannabis license. Despite serious allegations and concerns from shareholders and investors, MedMen seems to be going full steam ahead. Just last week the company announced it is launching a new clothing line.
KushCo has been building up its management team with several new additions. Today the company announced that Danny Moses — yes that Danny Moses — has joined KushCo’s Advisory Board. But Moses isn’t the only addition. The company announced 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. Oliveira 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.
Today Trulieve announced a newly established partnership with SLANG Worldwide. According to the agreement, SLANG’s US subsidiary Organa Brands will supply Trulieve with leading cannabis brand products for its Florida medical marijuana dispensaries. Robert Fagan of GMP Securities has rated the company a “buy” with a price target of CA$26, representing a return of 59.2%.
MariMed announced last Monday that it has converted its initial $30M purchase of debentures into GenCanna Global common stock. Recently the company established a subsidiary, MariMed Hemp Inc., which will be focused solely on hemp derived CBD products.
Last week Auxly Cannabis announced changes to its management team, with the appointment of Brian Schmitt as Chief Financial Officer, Jason Sonshine as Vice President of Strategy, and Carla Nawrocki as Vice President of Investor Relations for the Company.
Today Robert Fagan of GMP Securities initiated coverage on iAnthus, giving the company a “buy” recommendation with a price target of CA$11. Last week iAnthus announced the appointment of Pat Tiernan as Vice President of Operations.
Namaste has been shrouded in drama recently. Last week the company announced that it terminated CEO Sean Dollinger due to evidence of self-dealing. In response to the termination, Dollinger began taking legal action against the company. As of today, Namaste has reached an understanding with Dollinger, who has agreed to withdraw his injunction and resign from his position with the company. As part of the agreement, Dollinger will be permitted to act in an advisory capacity.
Nasdaq is estimating New Age Beverages will release its earnings report tomorrow based on the company’s historical reporting schedule. 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.
GMP Securities analyst Robert Fagan lowered Supreme Cannabis’ price target from CA$3.50 to CA$3.25 last Wednesday. Last week Supreme issued its Q2 2019 financial results, reflecting a 359% increase from Q2 2018. The company reported quarterly revenue of $7.72M with a net loss of $1.55M.
Last week Amyris and the Infectious Disease Research Institute announced the receipt of a $4.4M grant from the National Institute of Allergy and Infectious Diseases. Amyris was selected as a partner because of its record of success in engineering molecules that are pure, sustainable, and achieved at a low cost.
Last week Level Brands released its quarterly earnings report that ended on December 31, 2018. The company reported a net sales increase of 82% ($1.2M). According to Business Wire, Level Brands’ subsidiary cbdMD accounted for 37% of net sales — pretty amazing considering the cbdMD was acquired on Dec. 20, giving the subsidiary only eleven days to post sales for the quarter.
The North American Marijuana Index tracks the leading cannabis stocks in the US and Canadian Sectors. The Index gained 0.24% and was trading at $281.13.