|Bid||6.98 x 21500|
|Ask||6.99 x 21500|
|Day's Range||6.62 - 7.05|
|52 Week Range||4.05 - 12.52|
|Beta (3Y Monthly)||2.49|
|PE Ratio (TTM)||32.29|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
Cannabis stocks were mostly higher on Monday, after the U.S. Food and Drug Administration said it is expediting its effort to create a regulatory framework for CBD with plans to publish a report on its progress by early fall.
Organigram earnings missed Q3 views. Aurora Cannabis got two new cultivation licenses. Organigram, Aurora and other marijuana stocks rose.
Aurora Cannabis Inc. (NYSE: ACB) said Monday it has obtained Health Canada licenses for outdoor cannabis cultivation in Canada, and also a processing license for its Aurora Air facility, where the company’s new edible products will be manufactured. The company will use two new sites for cannabis cultivation research, one being located in British Columbia and the other in Quebec. Benzinga's Cannabis Capital Conference heads to Detroit on Aug. 15 -- Click here to learn more!
It's a news item that may have nonchalantly passed over many traditionally minded investors' radars. In a few days, Hexo (AMEX:HEXO) will trade on the grandest stage of all: the New York Stock Exchange. Therefore, even though the HEXO stock price incurred ugly volatility in recent months, that could soon change for the better.Source: Shutterstock After a tough earnings report, Hexo could use some good news. This is the positive development that embattled stakeholders have been looking for.Getting listed on the top exchange is a significant event for any publicly traded company. But what makes the promotion for HEXO different is that it also positively impacts the broader marijuana industry. That's because, from day one, all cannabis players searched for one thing: credibility.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWith the "upgrade" in Hexo, the organization joins powerhouse names like Canopy Growth (NYSE:CGC) and Aurora Cannabis (NYSE:ACB). And this in turn gives the green sector one more name within the elite circle.Now, I'm not suggesting that mere inclusion in the NYSE is the end all, be all. Over the years, we've seen the top exchange delist several names that didn't meet its standards. But that's also the draw for Hexo stock: the NYSE won't let just anyone in. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond Among many other factors, a prospective corporation must demonstrate broad demand and value of its equity. Furthermore, they must submit financial documents proving their viability. Given every opportunity to find something wrong, the NYSE gave HEXO stock a pass.That's got to be worth something! Good News Is Gold for HEXO StockDespite the above points, I may still have some doubters regarding the NYSE move's importance. At the end of the day, critics might argue, it's just a change of scenery for Hexo.Nevertheless, it's still a positive development for the budding company, and good news in this sector is worth its weight in gold. Unlike most other investment markets, cannabis-based securities primarily are not driven by the fundamentals. Instead, they're narrative-driven, which can be good and bad.On the negative end of the spectrum, you just need to look at the recent earnings season for marijuana firms. Company after company tumbled over the past several weeks, and for what? Failing to meet consensus expectations for earnings per share and revenue growth?As I explained regarding Aurora Cannabis' bout with volatility, Wall Street is not playing fair with marijuana businesses. Analysts know that due to a murky legal environment in the U.S., cannabis operators have limited options. Thus, the poor earnings results don't accurately reflect demand. Rather, they reflect unnecessary market inefficiencies due to myopic laws.Yet HEXO falls because most investors are trained to look at the numbers. Admittedly, they don't look good.But the numbers don't matter now as much as the narrative. Because for botanical advocates, the main goal was never about Canadian legalization. Instead, the grand prize is full legalization in the U.S.And stories like HEXO being listed in the NYSE add more leverage and credibility to this prospect. With enough positive headlines, the narrative can quickly shift from cannabis firms not making their numbers to potentially advantaging an unprecedented opportunity.That's why I'd advise against panicking: we're just getting into the good stuff for Hexo Corp stock. Ample Evidence Points to Full LegalizationSeveral years from now, I'm almost certain that we'll look back on names like Hexo stock with regret. Not because their shares did poorly but because they catapulted to unbelievable heights.Think I'm high on something? Consider that right now, cannabis is the fastest-growing job market in the U.S. Remarkably, this is true despite the fact that many states still haven't legalized marijuana to any degree.Moreover, several European countries are shifting favorably to weed. Late-last year, South Korea legalized medical marijuana. The concept was so groundbreaking - because the country is socially very conservative -- that it caught observers by surprise.I could go on and on. But the point is that the world is gravitating toward marijuana legalization. Eventually, the rest of the markets will catch up to this fact. And this is the ultimate narrative that can push Hexo Corp stock to crazy levels.Josh Enomoto is considering buying Hexo stock in the next 72 hours. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy for Less Than Book * 7 Marijuana Stocks With Critical Levels to Watch * The 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The post The NYSE Listing Means Legitimacy and Bigger Things for Hexo Stock appeared first on InvestorPlace.
EDMONTON , July 15, 2019 /CNW/ - Aurora Cannabis Inc. ("Aurora" or the "Company") (ACB) (ACB), the Canadian company defining the future of cannabis worldwide, today announced that it has received Health Canada licenses for outdoor cultivation at two Canadian sites.
The stock market is slowly but surely pushing higher. It seems as though the bulls are reluctant to run too far, too fast. At the same time, the bears simply can't garner any staying power when it comes to pushing this market lower. At least not while rate cuts are on the way. Let's look at a few top stock trades for next week. Top Stock Trades for Monday 1: Johnson & Johnson Click to EnlargeShares of Johnson & Johnson (NYSE:JNJ) were smacked lower on Friday, falling over 4%. The stock is approaching the same level we flagged earlier in the year, near $130.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThis level is currently acting as support, but has played a key role over the past 12 months. If JNJ stock falls down to this level, it may be worth investors nibbling at on the long side. Keep in mind, J&J reports earnings next week. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond If it hold this mark on an earnings decline, that's even better. Top Stock Trades for Monday 2: Square Click to EnlargeWe had Square (NYSE:SQ) on watch for a break higher, and that's exactly what we've gotten this week. The stock is up big over the past four trading sessions, rallying over 10%.For the short-term traders in this name, it would be prudent to book some of these gains with SQ stock heading straight into prior resistance.From here, let's see how SQ stock behaves. Does it pullback and consolidate a bit? Do shares push through resistance, which turns to support?I would love to see SQ stock coil under this level for a few days while holding up above $80. A breakout could Square flying higher, but the more rest it has before the breakout, the more powerful the move can be. On a decline, see that $78 holds as support. If it doesn't, $75 is on the table. Top Stock Trades for Monday 3: Illumina Click to EnlargeIt was a tough day to be a shareholder in Illumina (NASDAQ:ILMN). The stock plunged more than 15% after management warned about a big shortcoming in earnings.The action on Thursday spoke clearly. However, investors used the pullback to the 21-day moving average as an opportunity to get long rather than an opportunity to exit the name once steep channel support gave way.Given how big of a run ILMN has been on, you can't blame dip-buyers too much on this one. One day later and the stock is down huge. Its inability to stay above the 200-day moving average near $317 or the 61.8% retracement near $311 doesn't bode well for bulls. Under prior downtrend resistance (purple line) just adds salt to the wound.The longer shares stay below $311, the worse off bulls are. Let's give this one a few days to see where it settles down at. If it reclaims the $311 mark quickly, then we at least have a point of reference to use on the downside. Top Stock Trades for Monday 4: Aurora Cannabis Click to EnlargeYesterday we wrote about the bearish setup in Canopy Growth (NYSE:CGC) with its descending triangle formation. On Friday the stock plunged more than 7% and Aurora Cannabis (NYSE:ACB) isn't doing much better, down more than 5%.ACB is setting up the same descending triangle formation that CGC is and it's playing out exactly the same. Below the $7 to $7.25 area is very troubling for ACB. A rally back to this area and a failure to reclaim it sets it up for more downside. * 7 Stocks to Buy for Monster Growth in the Second Half of 2019 Be careful with this one. I wouldn't touch this one on the long side with a chart like this.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy for Less Than Book * 7 Marijuana Stocks With Critical Levels to Watch * The 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The post 4 Top Stock Trades for Monday:JNJ, SQ, ILMN, ACB appeared first on InvestorPlace.
Canadian cannabis companies have leapt onto U.S. stock markets, dazzling investors. Here's a rundown of industry facts and how to invest in marijuana stocks.
Valued at $7.3 billion in market capitalization, and holding the title of Canada's second biggest marijuana company, Aurora Cannabis (ACB) gets a lot of attention on Wall Street, where 13 analysts vie to cover the company's comings and goings.Actually, make that 14. Because this week, Compass Point analyst Rommel Dionisio joined the club, and initiated coverage of Aurora Cannabis stock with a Neutral rating and a 12-month price target of $8.00.Dionisio explained that "with approximately 20% market share in both the recreational and medical use markets," Aurora is "well positioned to benefit not only from the legalization of cannabis for recreational use last fall, but also the scheduled expansion of the market later this year to include advanced delivery forms such as vapes and edibles, which generally carry higher profit margins" -- both at home and abroad.Around the world, but especially in Europe and South America, more than 35 countries now permit at least the medical use of marijuana among their populations. Aurora Cannabis, with its "early presence" in these markets, is positioned to take a leading role in supplying them with legal cannabis products as adoption rates increase and more countries join the market. This, says Dionisio, justifies paying "a premium valuation multiple" for the stock.That being said, at a recent share price north of $7.00, Dionisio is of the opinion that Aurora already enjoys this premium valuation. Even if the stock did touch highs north of $16 a share in the past year, there's no guarantee it will return to that price point any time soon. Indeed, Dionisio values the stock at no more than $8 a share today -- and accordingly, does not endorse it as a "buy," rating the stock only "neutral."Is that fair?As Aurora moves from selling dried marijuana flower into higher margin products such as vapes, beverages, and edibles, Dionisio believes we'll see both an expansion of marijuana's popularity (noting that "these advanced delivery forms comprise about 1/3 of total cannabis product sales" in U.S. markets where they're legal today), and profit margins as well.That being said, Canada has already pushed back the date at which it will permit sale of these products once, from October to December 2019, and other delays could arise. Furthermore, Dionisio doesn't see Aurora turning a quarterly profit again (much less an annual profit) before Q4 2020 at the earliest. At the same time, the stock's share price, combined with Dionisio's $0.20 per share earnings estimate for 2021, show the stock to be very highly valued at 36 times earnings (that may or may not happen) two years in the future.That could be a long time to wait in a rapidly changing market, and one in which Aurora Cannabis is far from the only player. To the contrary, Dionisio notes that he's aware of "approximately 100 companies are on the list of licensed producers of cannabis products in Canada." In the meantime, Aurora Cannabis is losing money and burning nearly a half billion dollars in cash every year, and valued at 56.5 times revenues."With the stock already trading at over a 100% premium to the peer group average on an Enterprise Value/2020 Revenue multiple basis, we believe shares of ACB appear largely fully valued, and we recommend investors await a more attractive entry point before accumulating the stock," the analyst concluded. (Original Source)To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here.Read more on ACB: * Don’t Jump on the Bandwagon for Aurora Cannabis (ACB) Stock * Aurora Cannabis (ACB) Stock Set to See Big Gains, Says Analyst * What Is Aurora Cannabis (ACB) Competitive Advantage? * Aurora Has Substantial Upside on Soaring Production Capacity More recent articles from Smarter Analyst: * Can You Still Trust CannTrust (CTST) Stock? This Analyst Is No Longer Certain That You Can * Aurora Cannabis (ACB) Continues Expanding Cultivation Footprint with Two Licenses for Outdoor Growing * Tesla (TSLA): Range Anxiety Is All Perception, but Still a Major Hurdle * Cannabis Stock HEXO to Benefit from Sector Chaos
Aurora Cannabis (NYSE:ACB) bulls are looking tired. ACB stock has now hit $10 on three occasions: January 2018, last fall, and most recently this March. Each time ACB stock has fallen sharply from that resistance level. If Aurora stock can't get back above $10 soon, the stock could be in deep trouble.The fundamental picture for ACB stock hardly looks better. Canadian marijuana companies continue to run big losses. We see management controversies developing. A scandal at a rival pot company has people worried.And the core problem in the Canadian market -- excess supply -- continues to mount. Even the Ontario market coming online has done little to fix this disturbing trend. Aurora in particular looks to have too much supply given the weak demand trends.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond This plays into another mounting concern; companies like Aurora will have to take write-downs if their businesses don't start generating profits soon. All in all, ACB stock's recent 21% slide is well-founded and more room to go. CannTrust: A Big Warning for the SectorEarlier this week, shares of Canadian marijuana rival CannTrust (NYSE:CTST) plummeted. Investors dumped CannTrust stock on news that regulators had seized a large quantity of its pot inventory. Why would they do that? The government claims that CannTrust was growing marijuana in unlicensed facilities.CTST stock has gone into free fall. It dropped more than 20% immediately following the news, and has now lost 40% of its value in the past week alone. It's down 70% from where it traded in March, and has hit fresh two-year lows. It's a stunning reminder to the rest of the industry that even in generally tolerant countries, like Canada, regulators are still a big concern if companies get sloppy with their paperwork.Why is this so important to ACB stock in particular? Because Aurora is aiming to be the global leader in medicinal cannabis. As Aurora's latest corporate presentation notes, it is active on five continents and in 25 different countries. Aurora claims to be the industry leader in both the EU and Latin America.With such far-flung operations, what are the odds that Aurora will run into regulatory trouble with at least one of its operations? I'm not suggesting Aurora is doing anything incorrectly. But in the course of making so many acquisitions and entering so many markets, it can be hard to keep everything 100% up-to-date as far as licensing and paperwork go. The market, with CannTrust at least, has said that it will take a stock to the cleaners if they run into any government headaches. It's a big risk to monitor for ACB stock going forward with its unusually extensive global footprint. Industry Bracing for Write-DownsA Bloomberg article this week noted that the marijuana industry is facing rough times ahead. Of the big players, analysts expect only Cronos (NASDAQ:CRON) to make positive net income this year. That's not a favorable result, given that 2019 was supposed to be the big year. Marijuana companies were going to move from story and hype to becoming solid businesses with legalization in place and many other market opportunities opening up.But the stream of red ink hasn't let up. On top of that, producers have overwhelmed the Canadian market with way too much inventory. As a result, Bloomberg reported that:"Instead of profit, writedowns related to unfinished inventory may be in the offing for some Canadian companies. That has some investors voting with their feet, moving out of Canada and into the U.S., where the marijuana companies are generally performing better despite a patchwork of state-by-state regulations."Investors have been increasingly moving their funds into the American marijuana plays given the state of the Canadian industry. And we saw a big sign of industry unease when Canopy's (NYSE:CGC) former CEO was forced out of his position when, seemingly, major backer Constellation (NYSE:STZ) had a disagreement over business strategy going forward.As Canopy and others have failed to turn acquisitions into profits, this raises the possibility of asset write-downs. Companies like Aurora, Canopy, and Aphria (NYSE:APHA) have bought many other smaller pot firms. Bloomberg Intelligence analyst Kenneth Shea says these companies will have to take charges against earnings in coming quarters if those assets don't start producing profits. ACB Stock VerdictYes, the price of Aurora stock has gone down a lot recently. But that doesn't necessarily mean it is cheap yet. Just look at CannTrust's non-stop plunge from $10 to $3 since March. What looks cheap often gets a lot cheaper.Let's face it: The Canadian marijuana industry is suffering from a big shakeout at the moment. People dreamed of easy profits following legalization. But it isn't working out that way. Aurora has a unique pitch for investors with its focus on medicinal and international markets, but that brings its own share of risks. With sentiment turning downward -- with good reason -- ACB stock could have a good deal farther to fall.At the time of this writing, Ian Bezek held no positions in any of the aforementioned securities. You can reach him on Twitter at @irbezek. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy for Less Than Book * 7 Marijuana Stocks With Critical Levels to Watch * The 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The post Aurora Cannabis: Here's Why ACB Stock Continues to Sink appeared first on InvestorPlace.
A full year after its widely publicized initial public offering, Tilray (NASDAQ:TLRY) shares experienced breathtaking highs and gut-wrenching lows. This dynamic attracted a fair share of skeptics and detractors. Even in an already volatile cannabis sector, Tilray stock is a big mover in both directions. Therefore, TLRY isn't for the faint of heart.Source: Shutterstock If you're seeking relative safety in the cannabis stock niche, you're probably better off sticking with a cannabis old-timer: Speaking relatively, I'm referring to names such as Canopy Growth (NYSE:CGC) or Aurora Cannabis (NYSE:ACB).But if you're ready to take a walk on the wild side, though, then buckle up for some cannabis controversy. Compared to other weed plays, Tilray stock is a veritable roller-coaster ride.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Not Your Grandfather's StockMillennials and younger traders are drawn to volatile stocks like TLRY; thus, don't expect to see this in a lot of retirement accounts. With a jaw-dropping 52-week range of $20.10 to $300.00, it's fair to say that Tilray stock experienced some growing pains before real price discovery finally took hold. * 10 Stocks to Sell for an Economic Slowdown Plus, with no price-earnings ratio listed because the earnings are negative, this is a "proceed with caution" play. Still, the price action for TLRY seemed to have calmed down this summer. After generating considerable noise as the NASDAQ's first listed pot stock, investors might identify a trading range for this wildcard. No Lock-up Worries for TLRYMuch of the bearish sentiment surrounding TLRY involved the company's largest shareholder, a private-equity firm known as Privateer Holdings. You may recall the hubbub over the ominous-sounding Tilray news that its insider shareholder lock-up period was ending earlier this year (Jan. 15, to be exact). That means that Privateer would now be allowed to sell all of its TLRY shares.This most likely caused some investors to panic and sell their holdings of Tilray stock before Privateer could sell theirs. But as it turned out, their fears were unwarranted: Privateer announced that it wouldn't sell any of its TLRY shares immediately after the lock-up period expiration.That was quite a relief, as Privateer owned approximately 76% of Tilray's outstanding shares. Not only that, they've agreed to extend their lock-up provision on those TLRY shares for two years. Street CredFor Tilray, gaining credibility on Wall Street wasn't easy. But they managed to align themselves with a bona fide giant when they partnered with beer-maker Anheuser Busch Inbev (NYSE:BUD). The purpose of their joint endeavor is to research nonalcoholic beverages containing THC and CBD.Personally, I feel that this partnership will prove transformative for the cannabis industry; investors and the media practically ignored this landmark arrangement, which is unfortunate. This deal will position Tilray in a unique position to capitalize on the potentially massive Canadian market for cannabis-infused beverages.Another boost to Tilray's credibility is the recent announcement that they're importing medical cannabis oral solutions in large quantities to the U.K. Sascha Mielcarek, the managing director of Tilray Europe, noted that Tilray already has six medical cannabis products approved for medical use in the U.K. Mielcarek also expressed optimism as the company continues to make inroads into the burgeoning European cannabis market, stating:Regulations are progressing as more and more countries across Europe are recognizing the benefits of medical cannabis and its potential to improve patients' quality of life. We're pleased to reaffirm our commitment to delivering medical cannabis to patients in the U.K. and look forward to offering a variety of GMP-certified, pharmaceutical-grade products in the coming months.Skeptics should also be aware that Tilray already ships to 12 countries with legalized cannabis. Among them is Germany, which has a population more than twice the size of Canada's. The Bottom Line on Tilray StockPlease don't misunderstand -- I'm not saying that retirees should load up their investment accounts with shares of TLRY stock. It's something of an acquired taste.However, cannabis-infused beverages and the rising cannabis market in Europe present huge opportunities. Therefore, I'm not at all against the idea of buying Tilray stock on the dip. It could turn into a joyride as the company strives for stability in this decidedly unstable industry.As of this writing, David Moadel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell for an Economic Slowdown * 7 Marijuana Penny Stocks That I May Buy * 7 of The Best Schwab ETFs for Low Fees The post 'High' Caliber: Can Tilray Stock Close the Credibility Gap? appeared first on InvestorPlace.
Chief Financial Officer Mike Lee told Jefferies analyst Ryan Tomkins that earnings before interest, taxes, depreciation and amortization could be negative for the next 2 fiscal years.
Marijuana legalization efforts are moving forward following a reform hearing on Wednesday concerning the drug. During Wednesday's hearing, Rep. Tom McClintock expressed an optimism that legalization efforts could extend across the aisle: "It ought to be crystal clear to everyone that our laws have not accomplished their goals," McClintock said.Source: Shutterstock Currently, a number of marijuana bills are on the table, including the STATES Act (PDF), put forth by Senator Elizabeth Warren and Senator Cory Gardner, which seeks to provide individual states with the right to decide how marijuana is regulated without fear of facing repercussions from federal agencies. The goal of this bill is to act as an amendment to the Controlled Substances Act.The Marijuana Justice Act, sponsored by Senator Cory Booker, is another candidate for marijuiana reform. It seeks to legalize the drug and also clear the records of anyone having served time for possession or use of marijuana.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIf this historic reform pans out, the impact of marijuana legalization will be felt across all marijuana stocks, including Canopy Growth (NYSE:CGC) and Aurora Cannabis (NYSE:ACB) which are both down 25% from their 2019 highs. Even with bipartisan support, however, reaching a consensus on the best path forward still appears problematic.Many lawmakers clashed over the idea of what broad-scale marijuana reform should be and how all of its nuances should be handled. One major point of contention is just how should marijuana reform in the U.S. deal with the repairment of communities crippled by year-after-year of President Nixon's costly war on drugs.The following are some key highlights from the historic hearing: * With Democrats controlling the House of Representatives, efforts to legalize or reduce restrictions on marijuana will likely pass in the House. * A Republican-controlled Senate could put a stop to any new laws that seek to cut down the red tape around the drug. * Across-the-aisle support is a possibility, however, and lawmakers believe marijuana legalization in 2019 could be on the table with bipartisan effort. * Majority Leader Mitch McConnell is a major roadblock to national marijuana reform. * Chairwoman Karen Bass accused the war on drugs of being "racially biased from its inception." * Tom McClintock pushed back on Bass' claims, accusing Democrats of "decid[ing] to play the race card in this hearing." * Malik Burnett, a physician at John Hopkins Bloomberg School of Public Health, testified that marijuana policy has been "a tale of two Americas" where the privileged are starting cannabis companies and the marginalized have had their lives ruined by marijuana-related convictions. * Baltimore State Attorney Marilyn Mosby weighed in, saying "there is little public safety value related to the current enforcement of marijuana laws." * Rep. Matt Gaetz, a co-sponsor of the STATES Act, believes his colleagues should support the bill despite it not going far enough with regard to social issues. * Physician David Nathan argued that consenting adults should have never been barred from using marijuana in the first place, comparing it to more harmful substances like alcohol and tobacco.The biggest takeaway from the hearing on national marijuana reform is that both sides of the aisle can agree we need to change how we treat marijuana in the U.S. While this doesn't guarantee marijuana legalization in 2019, it is definitely a bright spot for activists and investors in pot stocks.Rep. Ted Lieu summed it up best with an aside on how much progress we've actually made in America over the past 15 years: "If 15 years ago I were to tell you, in 15 years we would have gay marriage in 50 states and, in some of those states, we'd be smoking weed, you'd think I was crazy--but that is in fact what is happening now."P.S. This pot stock could soar starting Tuesday, Aug. 13 …The opportunity in legal weed is much like the opportunity internet stocks offered in 1994 … or that Bitcoin offered in 2015. It's set to grow so much over the next 10 years that it will turn out to be one of the biggest investment opportunities of your entire life -- no matter when you were born.But you must be prepared to act before this window closes.When you do, you'll benefit from one of the best wealth-creating strategies throughout history: buying early.You can get exclusive access to my new Cannabis Cash Calendar pick the moment it's released on Tuesday, August 13th.Click here for more on this incredible opportunity.As of this writing, William White did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell for an Economic Slowdown * 7 Marijuana Penny Stocks That I May Buy * 7 of The Best Schwab ETFs for Low Fees The post Marijuana Legalization Inches Closer With Historic Reform Hearing appeared first on InvestorPlace.
From acquisitions to equity investments, the North American hemp industry has been awash in capital investment since the Farm Bill 2018 was federally passed in the United States last December. The Hemp Business Journal has been closely monitoring such activity, and will soon publish more comprehensive data pertaining to the latest deals. Arguably the biggest deal in the hemp industry so far this year has been the acquisition of Manitoba Harvest by Tilray (NASDAQ: TLRY).
Cronos Group (NASDAQ:CRON) shares have struggled of late. Since early March highs, Cronos stock is down about 35%.Source: Shutterstock Cronos stock managed to put together a modest rally last month, but it has faded. CRON sits at a one-month low at the moment.To be sure, CRON stock isn't alone. Other cannabis majors are scuffling. Canopy Growth (NYSE:CGC) has dropped steadily since late April, losing about a quarter of its value.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAurora Cannabis (NYSE:ACB) is off almost 30% since mid-March. Tilray (NASDAQ:TLRY) has stabilized, but after a long, steep decline. Hexo (NYSEAMERICAN:HEXO) has slid 41%. * 10 Best ETFs for 2019: The Race for 1 Intensifies For the biggest cannabis stocks, investor patience is drying up. Why that is remains unclear. Valuation could be a concern. It's likely that there's a "OK, what's next?" response after Canadian legalization in October.The problem for Cronos Group stock, however, is that even when sentiment returns, it's not clear what the company can do to spark investor enthusiasm.The near- to mid-term worry is that if cannabis stocks continue following, CRON stock will too. And if they rise, Cronos stock may well underperform peers until the wisdom of its plans become more clear - and Cronos starts showing real success. The Canada Problem for Cronos StockIt's become increasingly clear that the Canadian market isn't big enough and that there are real worries about too much supply in cannabis flower more broadly. As I've noted before, prices have crashed in U.S. regulated markets due to oversupply.In March, Tilray's CEO predicted similar issues in Canada as soon as next year. Aurora's strategy clearly is predicated on the idea that Canada alone isn't enough.Cronos seems to be operating on similar principles. Despite its US$1.8 billion investment from Altria (NYSE:MO), its production capacity might not even make the top ten in Canada, as the Motley Fool has noted. Even with that cash on the books, Cronos isn't racing to build out its production capabilities.That strategy makes some sense, particularly if as feared the Canadian market simply isn't big enough. Oversupply in dried flower is a real concern. But as far as CRON stock goes, it raises the question of what catalyst might arrive any time soon.Cronos might be right in playing the long game. Investors - and particularly cannabis stock investors - haven't shown that same patience in recent months. The StrategyAs CEO Mike Gorenstein put it on the Q1 conference call, "Like Altria, we believe that the best way to create value through the supply chain is by working with contract farmers and not being farmers ourselves."Cronos simply isn't all that interested in producing dried cannabis flower. It would rather let others spend the money to create that supply, assuming it can then buy flower at cheaper rates down the line.Instead, the company is focused on derivatives and R&D. It's working with Ginkgo Biosciences to create new strains of cannabis that can yield purer and easier-to-extract THC and CBD.Its new Cronos Device Labs in Israel will focus on fine-tuning vaporizers for varying customer demands. Production in Colombia is focusing on hemp over cannabis, with Gorenstein predicting on the Q1 call that CBD would outpace THC in terms of growth in the coming years.The Altria partnership should give Cronos an edge in these areas, given that tobacco company's long history with regulators. But there's risk here as well.The efforts with Ginkgo may not pan out. Even if they do, the new strains may not be all that valuable, if 'natural' strains are abundant and cheap as other companies build out capacity. Vaporizer demand may be lower than expected.There's certainly a risk that while Cronos plays around the edges of the market, rivals like Canopy and Aurora simply overpower the market. Canopy has more cash thanks to its deal with Constellation Brands (NYSE:STZ,NYSE:STZ.B).Aurora will give its stock to any company that will take it. If an investor believes that cannabis production will be big business globally, it's tough to believe that Cronos will be the big winner. The Long-Term Case for Cronos StockFrom a long-term standpoint, Cronos' strategy does seem wise. It's a good idea to keep US$1 billion or so in the bank in an industry in upheaval.Canadian suppliers are going to go bust; that's simply the nature of any growing market. Unexpected new markets may emerge elsewhere. Keeping capital on hand enhances flexibility, which seems like a compelling attribute to have as cannabis legalization (both recreational and medical) expands.Similarly, focusing on higher-value-add and higher-margin products makes sense. One need only look at the difference in valuation between Altria and Pyxus International (NYSE:PYX), an Altria grower, to understand what that will be the case in cannabis as well.The issue over the next 1-3 years, however, is that the strategy appeals to those of us (myself included) who think cannabis stocks are too expensive to begin with.Again, Cronos is set up for a future where oversupply hits prices and/or the global cannabis market moves slower than bullish investors expect. In both scenarios, cannabis stocks come down - and it's unlikely, though not impossible, that CRON stock emerges unscathed.In a sense, Cronos stock is the pot stock for investors who question whether pot stocks have rallied too far. If those investors are right, they're betting off staying as patient as Cronos is willing to be. As such, even with CRON stock cheaper, there's seemingly little need to rush in.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell for an Economic Slowdown * 7 Marijuana Penny Stocks That I May Buy * 7 of The Best Schwab ETFs for Low Fees The post Cronos Isn't in a Rush. Investors in Cronos Stock Shouldn't Be Either appeared first on InvestorPlace.
Aurora Cannabis (NYSE:ACB) is not a company that I would want to own. Other than being a cannabis player, ACB stock doesn't seem to have much going for it as a potential investment.To me, ACB appears overextended, over-leveraged, and overvalued. It is no surprise that Aurora stock has fallen about 30% since March while the broader markets have rallied. Here are some of the issues that the company has to deal with.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Outdoor versus Indoor Growing CostsA reckoning will soon impact the cannabis market. This will happen when investors realize that the cost advantage of outside growing far outweighs any disadvantages when compared to inside growing.Some experts estimate the cost of outdoor growing to be just 15% of growing in an enclosed facility. So-called weedpreneurs consider indoor growing more secure and creates a higher quality product. But guess what? It is called "weed" for a reason. * 10 Stocks to Sell for an Economic Slowdown Weeds grow rapidly outside. Around the world, producers grow high-quality cannabis outdoors in various environments. Marketers may even use outdoor growing as a positive. I can see it now: Grown with natural sunlight!All joking aside, ACB and the other growers that are mainly internally focused will face intense price competition soon. And that hurts the case for Aurora Cannabis stock. Is Aurora Moving Too Much, Too Fast?I believe that Aurora has taken on more than it can efficiently manage. Although it's not unusual for marijuana firms to adopt acquisitive strategies, ACB takes the cake. Recently, management pulled the trigger on 17 companies. It's not clear if any of these will really pan out for ACB stock.In addition, Aurora has made 12 strategic investments. Management likes to talk about the 88,000 patents that it owns. However, I do not see how anyone can reasonably keep track of such a vast portfolio. Considering that this sector is competitive enough, it's another worry impacting Aurora stock. Share Dilution Hurts ACB StockAurora's shopping spree has led to significant share dilution, and that is not a good thing. In my spare time, I love to read about Wall Street history. One of the most interesting events that happened on the Street is known to historians as the Erie War.This was a fight over the Erie Railway Company that occurred in the 1860s. While Cornelius Vanderbilt was trying to take control of Erie by buying shares, Erie's board of directors just kept issuing and printing new shares to sell to him. In doing so, the company became more and more diluted.This kind of reminds me of the takeover shopping spree that has impacted ACB stock. Want to buy yet another company? No problem. Issue more shares.Most of the acquisitions that Aurora has made have been financed by the issuance of new shares. In theory, this should not matter because management is supposedly buying something of equal or greater value. But in the real world it doesn't always work like that. In my opinion this dilution of Aurora stock is a negative. Goodwill Is a Cautionary Tale for Aurora StockEver since I started analyzing companies, the concept of goodwill has interested me. Goodwill represent intangibles such as corporate reputation. And how would the markets define "reputation?" It is the premium above the value of the company's assets.This will be added to the company's balance sheet as an asset. So basically, if a company goes around overpaying for other companies, the value of the company will increase by the amount that it overspent. And here's where things get tricky for Aurora Cannabis stock.In its last earnings release, Aurora reported almost goodwill of $3.2 billion CAD. This is an astonishing 57% of the value of the company. In theory, this means that over half the value of the company is associated with ACB overspending on its buyouts. This is way too high for my comfort level.Although I don't speak for everyone, I suspect it's too high for most conservative investors. Therefore, it's another reason to steer clear of Aurora stock. Don't Fight the Tape Click to Enlarge It isn't surprising that ACB stock has not performed well. Since March the price has fallen by almost 30% while the broader markets have rallied to all-time highs. My guess is that ACB stock will continue to underperform. I see no reason to invest in it. I would even go so far as to say you would need to be stoned to want to own it.As of this writing, Mark Putrino did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy on College Students' Radars * 7 Retail Stocks to Buy for the Second Half of 2019 * The S&P 500's 5 Best Highest-Yielding Dividend Stocks The post Too Many Technical and Fundamental Questions Plague Aurora Stock appeared first on InvestorPlace.
Aurora Cannabis (NYSE:ACB) stock had two recent failed attempts at breaking out from $8 per share. This is a level that has been pivotal since January of 2018 so it's not a surprise to find it sticky here. But this resistance remains the opportunity for the next few months.Clearly the bulls and the bears are in a heated battle over the short-term future of Aurora stock. That is why they keep chopping around these levels. But the important thing for the bull thesis is for ACB to hold its support. Otherwise, the sellers will take control of the reins and the bulls would have to fall back and reset for another set of attempts.InvestorPlace - Stock Market News, Stock Advice & Trading TipsI consider this opportunity primarily a swing trade for a momentum stock. These are volatile tickers that move fast in either direction, which makes them tricky to trade without either complete faith or proper knowledge of levels.While I do have some faith that the cannabis industry has a good future ahead, I don't have blind faith that it will. So in this case I must plot the short-term lines that I see here for ACB stock. * The S&P 500's 5 Best Highest-Yielding Dividend Stocks I need to clarify that the battle though fierce now, year-to-date the ACB is up almost 50%. So this is not the case of a struggling stock. The point from today is to catch the next big burst. The battle here is important for both sides because the breach on one side will carry momentum in that direction.My hunch is that the bulls will eventually prevail and the upside opportunity for ACB is to target a new high. There will be resistance at $8, $9.25 and $10.40 per share. The current ACB price pattern is a sharp descending wedge knocking against a flat floor. Often these resolve themselves upwards especially if there is no new specific reason to sell the stock. First the Fundamentals for ACBThe whole sector is exorbitantly expensive. The valuations are completely insane but that's because we don't yet have a baseline. This is similar to the chase of eyeballs into the dot-com bubble. Only this time we actually do have a market and products so there is actual income flowing into Aurora and other pot stocks.The very fact that legitimate companies like Constellation Brands (NYSE:STZ) and Altria (NYSE:MO) are investing billions into pot companies like Canopy Growth (NASDAQ:CGC) and Cronos (NASDAQ:CRON) is proof enough that there something there.The potential comes from the fact that ACB and the gang need to expand their capacity in order to satisfy the incessant demand that we know is there. But the bigger upside reset will probably come from legislative changes.More and more countries are legalizing cannabis. The U.S. is still lagging even though some states took the plunge individually. Once federal regulations in the U.S. change they open the door for companies like Pepsi (NYSE:PEP) to invest in cannabis then the interest in them turns into a feeding frenzy.One thing is not in doubt: Cannabis has very devout fans. This is true for traditional recreational use, edibles and the expectations of drinkables. Medicine is also incorporating cannabis in many formats. I am also noticing more advertisement for topical spreads which are not yet constrained by the regulatory bodies in the US. Trading ACB StockIf I am already long ACB stock, I just look away for a few months. But for those who have complete faith in the concept and believe that it's only a matter of time before the stars will align for pot stocks, they need to simply plug their noses and buy the ACB shares here. This is a long-term bet that the concept will grow into its valuation.After all, this is an industry that is like a newborn, so young that it's eyes are still shut. It is impossible to short the future prospects of the sector so soon so the bottom -- regardless of ACB fundamentals -- should be shallow. The hopium is still too big.For the short term, the bulls and bears for ACB are playing tug-o-war between $7 and $8 per share. So far the floor has held but the risk now becomes that the action forms a neckline that must hold. Else the sellers prevail and overshoot to test the next support zone around $5. This would be a dip I'd buy.The bottom line is easy. Both sides of the opinions on Aurora stock are passionate. But for now it's impossible to deny the upside potential of such a young company. So it becomes a matter of time before the bears get tired and the bulls overwhelm them on the charts. So I'd rather be long than short this one for the next year. * 7 Retail Stocks to Buy for the Second Half of 2019 Another way to go long ACB without committing to the full price of the stock now is to sell December $6 puts and let time do the work. This way I get paid today for the opportunity to own the shares at a 18% discount from now.Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. Join his live chat room free here. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy on College Students' Radars * 7 Retail Stocks to Buy for the Second Half of 2019 * The S&P 500's 5 Best Highest-Yielding Dividend Stocks The post Aurora Cannabis Stockas Highs Are Coming appeared first on InvestorPlace.
This is the first of a two-part series on the history of Colombia and its route to cannabis legalization. Colombia is in an extraordinary position. It possesses the fourth largest economy in Latin America.
About every week an analyst comes out with pie in the sky market sizes for the cannabis market. A stock like Aurora Cannabis (ACB) is highly reliant on sales actually reaching these targets which has been problematic for the stock as actual Canadian sales have disappointed.$200 Billion MarketAccording to Stifel, the cannabis sector offers a $200 billion global opportunity in a decade from now. The issue for cannabis stocks is getting access to this global market with limited recreational approvals around the globe. The global market is mainly focused on Canada and parts of the U.S. and still faces a long path to fully open up global markets.Analyst Andrew Carter predicts the Canadian market to reach C$10 billion in sales by 2023, yet the market is only on a pace for C$900 million in sales now. Even if edibles and vapes double the revenue potential in 2020, the market is only on a C$2 billion sales path.The analyst has an interesting projection that the U.S. Federal laws won’t change until 2021 at beat. While this forecast isn’t a direct impact to Aurora Cannabis, it does prevent the Canadian giant from entering the U.S. cannabis market outside of CBD sales for several more years.Global, Without the U.S. Aurora Cannabis has always promoted the company has a global player in the cannabis sector. The problem is that the U.S. market dominates cannabis sales now and Canadian sales continue to struggle.For FQ3, Aurora Cannabis only had sales of C$4 million outside of Canada. Dozens of U.S. companies already have sales far in excess of what Aurora does outside of Canada.The company having facilities in 24 countries across 5 continents will actually turn into a massive dead weight, if sales don’t improve. Aurora Cannabis will need to justify why the company is in Estonia, Latvia, Poland and South Africa as examples with such limited international sales. The company doesn’t even breakout non-European dried cannabis sales despite listing activity in Australia, Brazil and Mexico amongst other countries.The point here is that Aurora Cannabis expanded into all of these locations due to these pie-in-the-sky revenue targets that are highly unlikely to materialize in this time frame. Not to mention, the first mover advantage that the Canadian company covets will be lost when these markets don’t fully open for legalized pot use for years, if not decades.The end result is that Aurora Cannabis has a market valuation of C$11 billion based on ~1.1 billion shares outstanding. In essence, the company has a market valuation in excess of the forecasted 2023 Canadian opportunity alone.The company will naturally continue to grow medical cannabis outside of Canada, but the market potential still doesn’t match the stock price considering all of the competitors in Canada that will dilute the actual market opportunity. Even with 25% market share, Aurora Cannabis would be lucky to reach C$2.5 billion in sales by 2023.TakeawayThe key investor takeaway is that Aurora Cannabis remains valued based on unrealistic market targets and global expansion that is far from certain. The stock will continue to struggle as the Canadian rollout disappoints and the stock is already valued based on cannabis sales hitting 2023 market targets that likely won’t reach targets.To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here.Disclosure: No position. Read more on ACB: * Aurora Cannabis (ACB) Stock Set to See Big Gains, Says Analyst * What Is Aurora Cannabis (ACB) Competitive Advantage? * Aurora Cannabis (ACB) Stock Has Substantial Upside * Aurora Investors Seem to Be Missing the Latin American Opportunity More recent articles from Smarter Analyst: * Can You Still Trust CannTrust (CTST) Stock? This Analyst Is No Longer Certain That You Can * Aurora Cannabis (ACB) Continues Expanding Cultivation Footprint with Two Licenses for Outdoor Growing * Tesla (TSLA): Range Anxiety Is All Perception, but Still a Major Hurdle * Cannabis Stock HEXO to Benefit from Sector Chaos
Investors that enjoy cannabis investing via the ETF wrapper rejoice: you've got another marijuana ETF to consider. On Tuesday, the aptly named Cannabis ETF (NYSEARCA:THCX) came to market.Source: Shutterstock The new cannabis ETF's issuer, Innovation Shares, frames the rookie marijuana fund as the "first passively managed pure-play ETF solution for investing in cannabis." THCX is the third cannabis ETF to hit U.S. exchanges. The $1.1 billion ETFMG Alternative Harvest ETF (NYSEARCA:MJ) is the seasoned veteran among domestic cannabis ETFs.New competition to MJ arrived in April when the actively managed AdvisorShares Pure Cannabis ETF (NYSEARCA:YOLO) launched. Today, YOLO has around $60 million in assets under management, making it one of the more successful stories among 2019's crop of new thematic ETFs.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * The S&P 500's 5 Best Highest-Yielding Dividend Stocks "As a pure-play cannabis ETF, THCX focuses on companies in the legal marijuana, CBD and hemp industries -- the portfolio does not rely on alcohol or tobacco stocks to provide exposure to this burgeoning global growth story," said Innovation Shares Managing Director Matt Markiewicz in a statement. The New Cannabis ETF's HoldingsThe new cannabis ETF tracks the Innovation Labs Cannabis Index, a rules-based benchmark that rebalances monthly. Home to 36 stocks, the cap-weighted index has a combined market capitalization of about $80 billion and features 19 licensed Canadian producers and 19 US-listed weed stocks, according to issuer data.Index components include some more obscure fare, such as The Green Organic Dutchman Holdings Ltd. (OTC:TGODF) and Toronto-listed OrganiGram Holdings Inc. (TSXV:OGI.V). Well-known cannabis names in the benchmark include Aurora Cannabis (NYSE:ACB), Canopy Growth (NYSE:CGC) and HEXO Corp (NYSE:HEXO), a beaten up Canadian cannabis name."The index currently consists of 35 stocks that are expected to benefit from the rise in value of the global cannabis market which is estimated to reach $630 billion by 2040," according to the index provider.Combined, THCX's aforementioned rivals, MJ and YOLO, have almost $1.2 billion in assets under management. That number does not necessarily jibe with investor demand for a marijuana ETF or interest in the cannabis investment theme. However, that theme is still in its early innings, many cannabis stocks are volatile, plenty are not profitable and some investors are simply waiting for the group's real leaders to emerge while the more financially challenged names peter out.While a myriad of challenges face cannabis stocks and their investors, scores of data and fundamental factors bode well for the long-term trajectory of the industry, potentially paving the way for more acceptance and assets of cannabis ETFs."With several regulatory catalysts on the horizon in the U.S. and abroad, the current cannabis environment presents an exciting opportunity for investors," said Markiewicz. "One area which has witnessed explosive growth since the signing of last year's U.S. Farm Bill is the hemp-derived CBD industry. Several of the companies in the portfolio are actively participating in this CBD boom by cultivating hemp, providing extraction services or by using CBD for applications in the pharmaceutical, health and consumer wellness markets." The Bottom Line on THCXMany new ETFs, regardless of underlying investment objective, struggle. And it is clear THCX entered as still small, but highly competitive arena. That said, the new cannabis ETF has something on its side: a low fee. Sort of."Sort of" because the rookie cannabis ETF charges 0.70%, per year, or $70 on a $10,000 investment. That is not cheap in ETF terms, but it is expensive relative to the 0.75% charged by MJ and YOLO's annual expense ratio of 0.74%. * 7 Retail Stocks to Buy for the Second Half of 2019 At the very least, THCX's low fee is likely to catch a few eyes among investors comparing the cannabis ETFs and that should be good to get some capital flowing into the fund.Todd Shriber does not own any of the aforementioned securities.The post The New Cannabis ETF Is the Market's Cheapest Marijuana Fund appeared first on InvestorPlace.
Former Canopy Growth CEO Bruce Linton reveals why he thinks he was fired, and why he'll likely be coming after Constellation Brands in the U.S.
Analysts say nation will turn a new leaf, changing federal law within a few years, as cannabis industry expected to grow big time over next decade.
Aurora's focus on medical marijuana patients and international expansion could put these three companies on its buyout radar.