|Bid||8.99 x 42300|
|Ask||9.01 x 900|
|Day's Range||8.92 - 9.12|
|52 Week Range||4.05 - 12.52|
|Beta (3Y Monthly)||2.80|
|PE Ratio (TTM)||41.67|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
Pot stocks may have cooled off in recent months but the industry is still hot and Bank of America Merrill Lynch expects it to get hotter as it reaches maturity. "We expect all companies to deliver attractive growth over the next few years, reflecting a low base and strong demand in a newly created legal cannabis markets, namely Canada," Bank of America Merrill Lynch analyst Christopher Carey wrote in a note. Part of the reason for the industry's cool down in recent months is that the short-term growth story for many companies has gone up in smoke.
Ah, the magic of analyst ratings! After a tough month in April, cannabis firm Hexo (NYSEAmerican:HEXO) suddenly reversed course after Bank of America analyst Christopher Carey initiated coverage. Sizing up the risk and reward profile, Carey assigned a "buy" rating on Hexo stock with a $10 price target.Source: Shutterstock The news couldn't have come at a better time. While cannabis stocks offer tremendous upside because they essentially materialize an industry that previously never existed, they're also incredibly volatile. Because this is an unprecedented sector, many investors are unsure how to approach a company like HEXO.As such, I mentioned earlier that I liked Hexo stock, even compared to relative heavyweight Aurora Cannabis (NYSE:ACB). Unfortunately, the aforementioned volatility in cannabis stocks disproportionately impacted HEXO, sending my recommendation toward a quick grave. But thanks to Carey, this bad boy gained nearly 12% on Wednesday.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Stocks to Buy for Spring Season Growth Of course, by the time that you're reading this, this dramatic burst in Hexo stock is in the past. Do newcomers still have a chance in riding this promising, but wild bull? Underappreciated Elements Support Hexo StockThe best way I can characterize Hexo stock is as a diamond in the rough. I believe the organization has the right components in place to make a solid run. However, the credibility issues that stymie virtually all cannabis stocks will pressure HEXO. At the end of the day, it comes down to your risk tolerance.But if you're willing to take that leap, Carey argues that this weed play deserves your attention. Primarily, HEXO stock is undervalued relative to its peers. Of course, in the marijuana sector, "undervalued" is an extremely relative term. That said, many cannabis stocks have hit nosebleed levels. Therefore, HEXO at least on paper provides some assurance of future room for growth.Next, the BofA analyst mentioned that Hexo stock is levered toward a "de-risked" Canadian cannabis market. Although I wouldn't use that term specifically, I see his point. Our northern neighbors paved the way for other western and developed nations to adopt tolerant policies. While this broader dynamic is building out, management has time to hone its craft.Finally, Carey mentioned "value-add partnerships" that go beyond the scope of Hexo's existent relationship with Molson Coors Brewing (NYSE:TAP). I agree. Cannabis stocks can branch out into subsegments of the broader categories of recreational and medicinal usage. However, let's not gloss over the Molson partnership as it holds a significant key for growth.Naturally, the idea here is for Hexo and Molson to developed cannabidiol (CBD)-infused drinks. Now, CBD itself is a tailwind for the industry as it offers non-psychoactive exposure to the cannabis plant. In other words, it's a lot easier to introduce people to weed through a drink rather than a joint. Upgrade Suggests Rising Credibility for Cannabis StocksIndeed, Hexo's Molson partnership has advantages over an expected synergy like Cronos Group (NASDAQ:CRON) and Altria Group (NYSE:MO). I don't think I can ever get my parents to smoke marijuana. But to drink it in a form that won't get them stoned? That's infinitely more palatable and more socially acceptable.Invariably, that had to enter BofA's thinking process when deciding to go bullish on Hexo stock. But just the fact that the big bank is even considering cannabis stocks is a major sign. It gives the industry significant credibility, and it suggests a very viable environment in the future.While we here in the U.S. have also warmed to varying degrees of legalization, most banks won't finance cannabis-related businesses. Why? Because it comes down to that nasty roadblock called Schedule I. Despite individual state laws, cannabis falls under strict federal guidelines.Sure, we've made progress in this department, too. For instance, the 2018 farm bill won consensus at a time when bipartisanship no longer exists. And major conservative figures have more or less voiced support for full legalization.Nevertheless, that Schedule I classification remains on the books for marijuana. Unless the federal government officially extinguishes it, most banks won't touch cannabis stocks. * 5 Dividend Stocks Perfect for Retirees And while BofA isn't necessarily diving into the sector with open arms, it's essentially giving you the green light to do so. Look, Hexo stock is a risky play no matter how you cut it. But if you've got the nerve, I'd read between the lines.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Buy for Spring Season Growth * This Is How You Beat Back a Bear Market * 7 Dental Stocks to Buy That Will Make You Smile Compare Brokers The post If You Can Tolerate Risk, Hexo Stock Is a Buy appeared first on InvestorPlace.
EDMONTON , April 18, 2019 /CNW/ - Calling all Canadian budtenders! Aurora Cannabis is kicking off the search for Canada's Top Budmaster ™ through a national competition that will recognize cannabis professionals across the country who are guiding consumers as they navigate the new world of legal cannabis. Through a series of skills-based and knowledge-testing events, as well as through digital competitions, Canada's budtender community will be able to demonstrate their expertise in cultivar characteristics and histories, product categories and formats, exceptional customer service, and must also showcase how they contribute to the community and culture. As Canada's first legal 420 holiday approaches, it's time to recognize the women and men in cannabis retail stores who educate consumers every day.
Marijuana stocks are among our top charts to watch today. Bank of America Merrill Lynch named the company as one of three marijuana stocks to buy. The stock, after sharp year-to-date gains, has been consolidating in recent weeks, but may be on the verge of its next leg up with cannabis stocks in general.
One company we've highlighted in the past CleanSpark, Inc. (CLSK) has developed power solution for the cannabis industry that can reduce energy costs by up to 82%. This represents a huge potential revenue stream for the company. Due to this fact the company has stated that marketing to cannabis companies is one of their top initiatives for 2019.
Canopy Growth will probably purchase the rights to buy Acreage Holdings to tap the growing potential of the U.S. marijuana market. This should bolster the ETF MJ.
The story really begins with the November 2017 investment made in Canopy Growth by Constellation Brands that left Constellation with a 38% equity stake in the firm and a pathway toward a controlling interest over a number of years. Cafina comes with a licence already in force to cultivate, distribute and export cannabis for medical and/or research purposes.
Aurora Cannabis stock edged up following a bullish note from Cowen & Co. that applauded management’s competitive positioning of the company.
While not bullish on Aurora Cannabis (ACB) long term, the stock could still reach $11 in the short term. The cannabis sector has several catalysts to push stocks higher before the oncoming flood of supply dips the market into oversupply in the next few years.Bullish CallMerrill Lynch analyst Christopher Carey came out with a bullish call on the leaders in the Canadian cannabis sector with global expansion hopes. The analyst placed a $52 price target on Canopy Growth (CGC) and an $11 price target on ACB.Following the bullish call, Aurora traded back to $9 providing a prediction of about 22% upside for the stock listed on the NYSE. The call isn’t really that bullish to warrant owning the high-risk in the sector long term, but investors should still consider the ability of Aurora to rally beyond $11 such as the all-time high just above $12.50.The company has a diluted share count that is marching towards 1.1 billion shares. The $11 price target places the market cap at a very aggressive $12.1 billion or C$16.2 billion.How the Target WorksAurora is aggressively pushing into the farming aspect of cannabis. The company recently announced plans to expand production to 625,000 kg from around 550,000 kg. The LatAm operations have aggressive plans as well that will push total production to top 1 million kg.The next big step for Aurora is for the June quarter to see supply reach 25,000 kg from only 7,822 kg in the December quarter. Whether the Canadian cannabis giant can maintain stable sales prices is crucial to making the following step in quarterly supply to in excess of 100,000 kg or a 15 fold increase from 2018 levels.Carey predicts that the Canadian market won’t reach cannabis oversupply until 2021. The stock can hit $11 anytime, but a delay in the oversupply outcome from sometime in 2019 or 2020 increases the odds of Aurora reaching new highs.In Q4, Aurora got just under C$7 per gram of cannabis sold. Assuming 500,000 kg sold at this price would provide an incredible C$3.5 billion in annual sales.Suddenly, the C$16.2 billion target market cap wouldn’t seem that expensive. Aurora would still have the additional production capacity coming online plus the LatAm operations.The easy path to $11 and even above $12 is the announcement of a major joint venture from the work with advisor Nelson Peltz. The deal might not even have to be all that material for the market to latch onto any catalyst for a CBD deal in the U.S. with a global beverage or consumer goods company. CBD-infused products such as beverages and edibles or even oils along with medical cannabis are expected to provide higher sales prices and profits.The long-term risk to these stories is a collapse in prices. A price dip in half to C$3 to C$4 per gram would still lead to substantial revenue growth. In such a scenario, one would have to worry about lower margins crimping profits. A lot of disgruntled investors might question why Aurora wildly built supply to push the market into an oversupply situation so quickly after legalization in Canada at the end of 2018.TakeawayThe key investor takeaway is that Aurora has several paths to easily reach $11 in the short term. The big key long term is whether cannabis prices remain stable as the company brings on a substantial increase in supply in the face of a strong illegal system that can avoid the regulator costs and taxes. Any hint of collapsing prices when end the rush to own the Canadian cannabis stocks.To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here. Disclosure: The author has no position in ACB stock.Read more on ACB: * Aurora Cannabis (ACB) Stock Is in Position for Another Bullish Leg * Can Aurora Cannabis (ACB) Stock Hit Its Targets? * Aurora Cannabis (ACB) Stock: Flooding the Cannabis Market with More Supply More recent articles from Smarter Analyst: * Jeff Bezos Is Leading Amazon (AMZN) in the Right Direction * Why Autonomous Could Be a Strong Driver for Nvidia (NVDA) Stock * Microsoft (MSFT) Stock's Big Rally Should Continue * Oppenheimer Still Sees 40% Upside for Tesla (TSLA) Stock
Aurora Cannabis (NYSE:ACB) is having a busy year raising its cash on hand. It filed a $750 million mixed shelf offering at the start of the month. In mid-January, it filed a $250 million aggregate principal amount of convertible senior notes due 2024. What is the company doing with all this money? And if markets continued to accumulate shares throughout the year, will the stock reward loyal holders? Higher Debt and Share DilutionThe convertible notes issuance and mixed shelf offering will no doubt give Aurora plenty of cash to grow the business. But the cost to existing shareholders is more debt and share dilution. Now, this could still pay off for Aurora and its shareholders if the company puts the cash to good use.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAlso, its competitors either raised cash on the stock market or sold part of the company in return for a cash infusion. For example, Tilray (NASDAQ:TLRY) raised $435 million in October, while Canopy Growth (NYSE:CGC) got an investment from Constellation Brands (NYSE:STZ).Executive Chairman Michael Singer said:"Although we have no immediate intention of drawing capital against this Shelf Prospectus, we have introduced this option as a prudent and long-term strategic measure to provide us with flexibility in access to growth capital, if or when required, to continue executing on our global expansion and partnering strategy." Dilution Could Pay Off for ACB StockAurora is not diluting investors if the company signs deals that add value to the business. So far, Aurora bought companies but paid fair value for them. * 10 S&P 500 Stocks to Weather the Earnings Storm Last year in May 2018, it bought MedReleaf for CAD$3.2 billion in an all-share transaction. Or it expanded its facilities through higher capital expenses. More recently, on Apr. 10, Aurora expanded the size of its marijuana production facility in Medicine Hat, Alberta, by 33%.The acquisitions and production facility investments increase the company's scale. This, in turn, increases Aurora's growth potential. So as markets willingly bid cannabis stock higher, the high valuation in ACB stock works in the company's favor.It may use its own stock to scale up its business. This will allow it to catch up to Canopy. However, it needs to keep showing results. Previously, Tilray enjoyed a higher valuation but weak quarterly results posted in March sent the stock on a downtrend. TLRY stock is down 30% in the last month.Cannabis companies are racing to beef up their size, scale and growth rates. Only a few of them will reach a big enough scale to become global leaders in the industry. So, that small debt offering could allow Aurora to leverage its balance sheet to go after growth.A word of warning: short-term risks are high for investors here. Aurora and other cannabis companies are not making any profits yet, and revenue growth trails mounting costs, so always proceed with caution. Opportunities for Aurora CannabisAurora leads in medical market share in Europe and Latin America. It is active in 5 continents and 24 countries. On top of the 15 strategic acquisitions made since Aug. 2016, it completed or is undergoing 40 clinical studies. The studies involve over 71,000 medical patients.Production capacity is currently 100,000 kg per year (as at the end of Q2/2019). By early 2019, it forecasts production of 150,000 kg/year and then over 500,000 kg/year by mid-2020.The cash raised could accelerate Aurora's lead in the Canadian market. Quarterly revenue is growing nearly exponentially, while competitors trail by a wide margin. As long as registered medical patients grow and production increases, expect the pace of revenue growth to continue.Aurora's addressable market may expand as it targets the Canadian medical, global medical, Canadian adult-use, and global adult-use markets. So far, margins are stable for the Canadian markets and in the case of adult use, strengthened through premium and innovative products. Globally, Aurora needs to leverage its early mover advantage, spend on R&D to develop high margin products. Your TakeawayAurora has tremendous global market growth potential, but it will not happen overnight. Near-term, the company now has the cash resources to invest strategically. Its value chain will benefit from higher cultivation and the opening of more distribution outlets. Although shares are holding up now, expect volatility increasing after the company reports quarterly results on May 13.As of this writing, Chris Lau did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 5 Dividend Stocks Perfect for Retirees * 7 Reasons the Stock Market Rally Isn't Over Yet * 10 S&P 500 Stocks to Weather the Earnings Storm Compare Brokers The post Why Aurora Cannabis Is Issuing So Much Stock and Debt appeared first on InvestorPlace.
Marijuana stocks have been a volatile but largely outperforming group in 2019. But an analyst warns that while some companies are living up to the hype, others have risen too far, too fast.
Speaking Wednesday to the Benzinga Cannabis Capital Conference in Toronto, 420 Investor author Alan Brochstein moderated a panel of representatives from some of the leading cannabis suppliers serving the Canadian market discussing how their companies have so far approached finding a share of the still-nascent industry. One of the major choke points affecting the Canadian market is meeting demand. Scott Walters, VP of corporate development with The Supreme Cannabis Co. Inc. (OTC: SPRWF), characterized the shift after the Oct. 17 legalization.
Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Asia Commercial Bank and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future.
Cannabis stocks have been trading at aggressive growth multiples for quite some time, but with expectations hinging on future demand and industry consolidation, the large-scale producers like Aurora Cannabis (ACB) could reach production and revenue goals that help justify the present valuation.Aurora stock has been able to remain stable within its current price-range of $8-$9, because the valuation hinges on the production ramp of a number of large scale grow facilities, which could take production all the way past 300K Kg/year. Hence, Aurora is in a position to trade at a multiple that seems reasonable on a forward-earnings basis assuming they can generate 20% net profit margins on $800M to $1.2B sales, which translates to a net profit range of $160M to $240M in FY’20 where investors would be paying 53x forward earnings at the low-end of earnings, which is still lofty, but seems reasonable for a rapid growth industry.To reach those type of targets, ACB’s production ramp needs to average into a pretty high figure over the next 12-month. However, the pricing dynamics of cannabis needs to hold steady as well, for the investment into new production to work favorably for ACB.Jeffries analyst Owen Bennett reports a number of favorable catalysts or news events that could help for some of the larger scale producer stocks:> Crowdsourced data was released by Statistics Canada for each province showing pricing data for the legal and illicit markets. Generally average prices had increased since legalisation (national average 17%) which is likely due to the supply issues we have seen (from scaling/cultivation issues, packaging bottlenecks, LPs keeping product back for extraction, lack of extraction capacity) as well as the muted rollout of retail stores from a number of provinces.> > On Thursday, The House Special Committee on Criminal Justice of Missouri voted 7 – 0 to approve decriminalisation for those possessing less than 36g of cannabis. The lead sponsor of the Bill, Rep. Shamed Dogan said this bill as designed as the first step to targeting larger issues such as the opioid epidemic. We are seeing this approach echoed on a national / federal level, where sponsors are focusing on pushing through bills to tackle specific segments of cannabis legalisation (access to banking services, access for vets, etc.), which stand more chance of passing near-term than a widespread bill such as the STATES Act.Keep in mind, Canada only legalized cannabis everywhere within its borders on October 17th, 2018. The demand for recreational creates an immediate backdrop of demand whereas the shortage of production has yet to reach the market. With pricing still 17% above pre-legalization, the trend in pricing still seems favorable, and the recent regulatory move (only 6 months ago) comes at a time where production is about to ramp considerably over the next 12-24 months. So, the regulatory scenario in Canada, and pricing trends implies that ACB should be in a position to sell at the higher-end of the selling price range, while producing much more in volume. In that scenario, ACB could report stronger margins over the next 12-months and still surprise current expectations.It’s also worth noting that there are more states in the United States that are decriminalizing cannabis possession, such as Missouri. If more States continue to transition towards legalization/decriminalization over the foreseeable five-year period, the United States rate of consumption will likely grow adding to the growth narrative and diminishing risks tied to industry overproduction.To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here. Disclosure: The author has no position in ACB stock.Next up: Aurora Cannabis: Flooding the Cannabis Market with More Supply More recent articles from Smarter Analyst: * Jeff Bezos Is Leading Amazon (AMZN) in the Right Direction * Why Autonomous Could Be a Strong Driver for Nvidia (NVDA) Stock * Microsoft (MSFT) Stock's Big Rally Should Continue * Oppenheimer Still Sees 40% Upside for Tesla (TSLA) Stock
Delivering the opening remarks, Raznick emphasized the sheer size and scope of this year's conference, which includes executives from leading cannabis companies like OrganiGram Holdings Inc. (OTC: OGRMF), iAnthus Capital Holdings Inc. (OTC: ITHUF), Aurora Cannabis Inc. (NYSE: ACB) and many more. Raznick took a moment to remember the monumental work done in the cannabis sector by Medicine Man Technologies Inc (OTC: MDCL) founder and former CEO Brett Roper, who died late last year. Roper is considered a major trailblazer in the early years of the cannabis industry and is fondly remembered by those with whom he worked.
Canopy Growth (NYSE CGC), along with most other cannabis firms, continues to operate at a loss as it builds out the infrastructure, develops its markets and develops goods that differentiate itself from the competition. Yet so far, pot stock investor seem oblivious to the risks of ongoing losses for the foreseeable future. So before investing in CGC stock, you need to pause for a moment to look at a few metrics. In doing so, investors can confirm that the company is on the right track. With that in mind, how does CGC stock fare for the speculative investor?Source: Shutterstock Operational EfficiencyCanopy Growth's yield potential in Canada is a good indicator of the company's operational efficiency. Much of the profit potential depends on government regulation and the pace at which it approves Canopy's medical products.Problems begin when investors look at the company's efficiency outside of the Canadian region, namely Europe, Australia, and South America. In those places, management does not have a clear estimate on yield over the next 1.5 to 3 years. Denmark has yet to produce supply for Canopy and is not scheduled to do so until later this year.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Stocks to Buy for Spring Season Growth This is yet another example of investors waiting for production to increase in meaningful quantities. Even if it reaches full utilization on time, investors are hardly assured that revenue from sales will exceed the costs for producing edibles and beverages. Weak Quarterly ResultsInvestors reacted negatively to Canopy Growth after it reported results on Feb 27. CGC stock had previously topped $59.25 but now trades near $42 -- and for good reason. Revenue of $83 million CAD tripled from last year, but Canopy Growth still lost 38 cents CAD a share. It also missed analyst consensus estimates. The company failed to benefit from average selling prices going up.The ongoing losses suggest that the company will have to raise prices even more to offset growing losses. If the product is demand elastic, Canopy may have a hard time selling in higher volume when prices are up.Temporarily non-producing facilities, absorption of the medical excise tax and commitments to sales and marketing and corporate infrastructure spending led to an adjusted EBITDA loss of $75.1 million. However, Canopy Growth is likely to face other one-time charges in the upcoming quarter -- so don't write this off as a one-time issue. Medical PlatformThe medical side of Canopy Growth faced some pressure in the third quarter. To counter the headwinds, Spectrum, its wholly owned subsidiary, needs more education-driven activity to grow awareness of the brand and the medical products. On Apr. 12, Spectrum Cannabis announced a partnership with an endorsement from CARP, a Canadian advocacy association for aging Canadians. It will offer tailored educational initiatives for over 320,000 CARP members.The company continues to believe that its medical opportunity globally over the next three years has a higher growth potential over the recreational market. For this to happen, Canopy therapy would need to face fewer regulatory hurdles than medical marijuana.Canopy is also running a promising study evaluating the efficacy of medical cannabis for treating insomnia. These tests are currently in Phase IIb clinical trials. It received approval from Health Canada in the second quarter of 2019. Thanks to awareness from the client base for cannabis in its role in helping to fall asleep or stay sleep, Canopy only needs to refine the ingredients and run a number of trials to gain approval from regulators. Strong Cash BalanceCanopy Growth has a few bright spots. Shareholders may point to the safety of its cash levels as one of those. By looking at Canopy's $4.9 billion in cash, most of which came from Constellation Brands, Inc. (NYSE: STZ), investors are at least assured that the company will not run out of money any time soon.Canopy's inventory build-up is also another positive development. Management intentionally increased inventory from $102 million at the end of March 2018 to $185 million at the end of December 2018. It is scaling up supply to meet strong market demands. As the legalization of the recreational market and medical customers expect more choice, the company expects sales volumes to increase. * 10 S&P 500 Stocks to Weather the Earnings Storm The Bottom Line on CGC StockThe risks in Canopy Growth is typical with any other stock in this sector: losses outpace revenue. The market is willing to wait for output to increase in 2019 but risks remain. Still, the company has lots of cash so short-term risks are low. Plus, as supply facilities are built, its efficiency will get better through scale.Disclosure: As of this writing, the author did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Buy for Spring Season Growth * This Is How You Beat Back a Bear Market * 7 Dental Stocks to Buy That Will Make You Smile Compare Brokers The post Is CGC Stock on the Right Track? appeared first on InvestorPlace.
Germany has awarded contracts to supply domestically-grown cannabis to two Canadian companies, as it seeks to develop its own medicinal marijuana industry and reduce reliance on imports. Drugs regulator BfArM said on Wednesday it would purchase 4,000 kg and 3,200 kg of cannabis over four years from German production subsidiaries of Canada's Aurora Cannabis and Aphria, respectively. The first home-grown harvest is slated for late 2020, the German drugs watchdog said in its statement, describing the tender as an "important step for the supply of medical-grade cannabis grown in Germany to critically ill patients".
Medical Marijuana (OTC: MJNA) subsidiary Phyto Animal Health announced the launch of its newest cannabidiol pet product, Skin Vitality. The salve is intended to treat itching, support muscle and skin recovery and provide relief for hot spots, wounds, bug bites, flea dermatitis and rashes. GB Sciences (OTCQB: GBLX), a partner in GB Sciences Louisiana, said that all cultivation […]The post Cannabis Stock News Daily Roundup April 17 appeared first on Market Exclusive.
Congress legalized hemp last year, opening the floodgates for companies to sell creams and sprays that advertise CBD, which is said to have a calming effect that lacks the high of THC.