|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||18.20 - 19.31|
|52 Week Range||11.99 - 30.00|
|Beta (3Y Monthly)||N/A|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||34.00|
Acreage Holdings, Inc. (“Acreage”) (ACRG-U.CN) (ACRGF) (FSE:0ZV) is pleased to announce that, further to the joint news release with Canopy Growth Corporation (“Canopy Growth”) on April 18, 2019 (the “Joint Release”), Acreage has obtained an interim order (the “Interim Order”) of the Supreme Court of British Columbia in connection with the proposed arrangement (the “Arrangement”) to be implemented under a statutory plan of arrangement pursuant to section 288 of the Business Corporations Act (British Columbia).
Canopy Growth (NYSE:CGC) moved higher after announcing a deal with its investment arm, Canopy Rivers (OTCMKTS:CNPOF). This offers some relief to CGC stock, which had returned to levels not seen since before they announced their buyout intentions on Acreage Holdings (OTCMKTS:ACRGF).Source: Shutterstock Unfortunately, Canopy Growth stock seems to need more. CGC has again sold off after briefly crossing the $50 per share mark in late April. While the deals with Canopy Rivers and Acreage boost the long-term prospects of Canopy Growth Corporation, they also show the difficulty of breaking CGC stock out of its current trading range. Canopy Growth Continues to Improve Market PositioningCanopy Rivers announced that the portfolio company it owns, PharmHouse Inc., will commit more of its production to Canopy Growth. CGC will now buy an additional 20% of PharmHouse's output for the next three years. PharmHouse had previously committed 10% of its flowering space to Canopy Growth.InvestorPlace - Stock Market News, Stock Advice & Trading TipsStill, despite what the PharmHouse deal means to Canopy Growth, much of the focus has settled on mergers and acquisitions (M&A). The latest M&A deal for Canopy involves a buyout of New York-based Acreage Holdings. However, in reality, one could better describe this "agreement" as an option. The deal will not close until recreational weed becomes legal across the U.S. * 7 Stocks to Buy that Lost 10% Last Week I agree with my InvestorPlace colleague Tom Taulli that the alliance with Constellation Brands (NYSE:STZ) alliance holds Canopy Growth in good stead. I also believe the company has positioned itself for a leadership position in the U.S. in both hemp and cannabidiol (CBD). This benefits the firm without regard to what happens with the Acreage deal. I also see Canopy Growth remaining the market leader in North America when U.S.-based companies can operate with full legal status. Investors Should Separate Canopy Growth, CGC stockStill, what helps Canopy Growth may or may not boost Canopy Growth stock. The current hype regarding marijuana stocks renders the price-to-sales (P/S) ratio of around 135X meaningless. However, it also leaves investors without a valuation-based metric with which to evaluate CGC stock.Hence, this leaves investors with the charts as a guide. For all of the hype, Canopy Growth stock has twice pulled back after spiking above $55 per share in intraday trading. In recent weeks, even the Acreage deal could not keep CGC stock above $50 per share. Moreover, since Jan. 15, it has rarely moved below $40 per share or above $50 per share. CGC Stock Has Become Range-BoundDespite its elevated multiple, I do not think it will break through the lower end of the range unless a recession occurs, or the U.S. suddenly makes cannabis legal.For now, traders have focused on when and how CGC stock will break through on the high end of the range. The elevated P/S ratio will struggle to go even higher without further stimulus. However, seeing the rally fizzle after the stock moved past $50 per share could make one wonder whether stimulus truly helps. Moreover, seeing marijuana stocks (including CGC) tank after weed became officially legal in Canada remains fresh on investor's minds. It also shows the strange and powerful phenomenon of illegality driving cannabis equities.Like most, I believe CGC stock will trade at higher levels years from now. However, until we see the stock stay above $55 per share, I do not think that the higher stock price will come in the near term. Final Thoughts on CGC StockCGC stock trades near the high end of its range, and I expect CGC will stay in the range. The PharmHouse deal serves as yet another confirmation that the growth story remains intact for Canopy Growth. However, it will likely not have a material effect on Canopy Growth stock. * 10 Stocks to Sell Before They Tank Your Portfolio Moreover, before the company announced this deal, CGC had fallen back to levels it saw before they announced the Acreage Holdings deal. Simply put, CGC stock has become range-bound.The prospects of the cannabis industry should keep Canopy Growth stock at an elevated multiple in the near term. However, even a major coup such as the Acreage deal has failed to put CGC stock back on a growth trajectory.The Acreage and the PharmHouse deals show that Canopy Growth has both the strategic vision and the product needed to lead the marijuana industry. Unfortunately, translating this insight into near-term growth for Canopy Growth stock will prove more elusive.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy that Lost 10% Last Week * Top 7 Dow Jones Stocks of 2019 -- So Far * 5 Service Stocks That Can Win the Trade War -- According to Goldman Sachs Compare Brokers The post Why Canopy Growth's Deals May Not Translate Into Gains for CGC Stock appeared first on InvestorPlace.
Individual and institutional investors as well as advisors are invited to log-on to VirtualInvestorConferences.com to view presentations NEW YORK , May 17, 2019 /PRNewswire/ -- Virtual Investor Conferences, ...
Since their inception, marijuana stocks attracted significant attention. Due to both investment sentiment - and let's face it, raw emotions - the cannabis sector absolutely skyrocketed. But now, the segment is attracting attention for failing to live up to analysts' expectations. Is the honeymoon phase over for weed?Hardly! While cannabis firms have produced some disappointing results during earnings season, that's no reason to abandon them. For one thing, the resurgent U.S.-China trade war is incredibly favorable for marijuana stocks to buy. Prolonged tensions will almost surely cause us economic damage. An easy fix here is to legalize weed and fully open the door to a multi-billion dollar industry.Another reason to stay the course with marijuana stocks to buy is the medicinal-cannabis market. Currently, 33 states have legalized medical marijuana, which is indirectly an indictment against the pharmaceutical industry. As I've argued many times before, pharmaceuticals must take at least some responsibility for the opioid crisis. This story alone has converted many people who have realized the benefits of all-natural treatments.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMoreover, medical marijuana is becoming a popular and potentially profitable exported good. We all know that progressive Europe is receptive to cannabis-based therapies. But more shocking is that conservative Asian countries notorious for their draconian anti-drug policies have demonstrated tolerance. Thailand became the first Southeast Asian country to legalize medical marijuana, while South Korea is the first East Asian country to jump onboard. * Top 7 Dow Jones Stocks of 2019 -- So Far No matter how you look at it, this development strongly benefits the "botanical" industry. Here are the best three marijuana stocks to buy right now: Aurora Cannabis (ACB)Source: Shutterstock Aurora Cannabis (NYSE:ACB) recently issued its earnings results for the first quarter of 2019. Let's just say the print wasn't exactly great for ACB stock. Although Aurora Cannabis' net-revenue haul of 65.2 million CAD exceeded the year-ago quarter's tally by a country mile, it missed analysts' consensus target of 67.6 million CAD.Also a miss was earnings per share. Wall Street expected a loss of 4 cents per share, but Aurora instead delivered a loss of 16 cents. With such a wide gap, conventional wisdom dictates that you should avoid ACB stock.Actually, though, even if Aurora Cannabis hit its metrics with flying colors, I wouldn't pay much attention. Why? Because this is a marathon investment toward an unprecedented sector. As such, you'll find nearer-term noise. Ignore it.The key here is that the management is positioning itself for dominance in the lucrative medical-marijuana market. Its acquisition of Whistler Medical Marijuana indicates that the focus is on quality, not quantity. When weak marijuana stocks get flushed out, ACB will remain standing. Canopy Growth (CGC)Source: Shutterstock Undeniably, a motivating factor to buy shares of Canopy Growth (NYSE:CGC) is the company's international presence. Primarily, it puts up a strong showing in the European mainland. Currently, Canopy is pushing both westward and eastward in the region. However, the ultimate prize for CGC stock and others is the U.S. market.Of course, this is seemingly a pipe dream due to our country's (misguided) Schedule I classification of marijuana. Still, CGC stock jumped mid-April when Canopy announced a contingent offer to buy out Acreage Holdings (OTCMKTS:ACRGF). Canopy will pay $300 million upfront if the U.S. legalizes marijuana.Many botanical advocates argue that Schedule I is a relic of the ignorant and racist past. However, it's still federal law, which means cannabis firms in green-friendly states are still technically at risk. * 7 Stocks to Buy that Lost 10% Last Week But thanks to the U.S.-China trade war, I genuinely believe that full legalization is nearing reality. A prolonged conflict with the world's second-biggest economy will invariably hurt our own fiscal health. That's why the U.S. has to explore marijuana if they insist on playing hardball with China. If so, look for CGC stock to soar. Hexo (HEXO)Source: Shutterstock If you're like most folks who learned about marijuana stocks to buy late in the game, you're probably hesitant on exposing yourself to the top-tier names. After all, we see them splattered on investment headlines all over the internet. If that's you, you might want to check out Hexo (NYSEAMERICAN:HEXO).For starters, Hexo is an understated name. It generates interest, of course, but not nearly as much as the top dogs. I believe that benefits HEXO stock and is partially the reason why shares have steadily made robust gains. Year-to-date, the cannabis firm's equity is up over 113%.That said, HEXO stock has much more upside remaining over the long term. Renowned alcoholic beverage-maker Molson Coors Brewing (NYSE:TAP) has a partnership with Hexo to develop cannabidiol (CBD) infused, non-alcoholic drinks.CBD recently gained mainstream recognition because it offers the cannabis plant's health benefits, but without levering a negative psychoactive effect. In other words, the compound is a perfect gateway for consumers to try other cannabis-based products.This is a partnership that provides multiple natural synergies. Even though it's not quite a household name, you should put Hexo on your list of marijuana stocks to buy.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 10 Retirement Stocks That Won't Wilt in a Bear Market * 5 Consumer Stocks Ready to Push Higher * 3 of the Best ETFs to Buy for a Play on Gold Stocks Compare Brokers The post The 3 Best Marijuana Stocks to Buy Right Now appeared first on InvestorPlace.
Canopy Growth (NYSE:CGC) has big plans, if they come too much under fire, though, it could hurt Canopy Growth stock.Source: Shutterstock When it comes to the cannabis opportunity, a key strategy for the large operators is M&A (Mergers & Acquisitions). This makes a lot of sense as scale will likely be the critical factor for long-term success. There will be a need for multiple brands, strong distribution channels and high levels of production.Such things can be developed by organic means, but there are major downsides. The need for huge amounts of capital, for example. Although, perhaps the most important factor is that organic growth is often just too slow.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Dividend Stocks to Buy as the Trade War Reignites Yet M&A can be fraught with risks too. In fact, we are getting a good sense of this with CGC recently. Canopy Growth Stock and AcreageIt all started in mid-April when the company announced it wanted to purchase Acreage Holdings (NASDAQOTH:ACRGF) for a hefty $3.4 billion (involving a $300 million upfront payment). The company is the largest vertically integrated, multi-state owner of cannabis licenses across 20 states in the U.S. It also owns The Botanist retail store brand. On the news of the deal, the CGC stock price got a nice lift.Now there is a novel feature to the transaction - that is, the deal will actually not close until the U.S. legalizes cannabis for recreational purposes. There is also a 90-month termination provision if this does not happen. For the most part, it's an option on the future.All great, right? Well, I think this is certainly the case for Canopy stock. But one important shareholder, Marcato Capital Management, of ACRGF is far from satisfied. It has a 2.7% equity stake and has indicated it will fight the deal.The letter to the board did not mince words, saying the deal is "value destroying." Interestingly enough, it points out the divergence in the reaction from Wall Street. ACRGF stock fell by 6% whereas Canopy Growth stock has gone up 15.2% (as of May 6th).According to the letter: "In total, Canopy's market capitalization has increased by roughly US $3.5 billion since the deal announcement, indicating pro forma economic value to Canopy of US $6.9 billion -- over 100% greater than the price offered to Acreage shareholders."The letter also notes other issues: the uncertainty of the closing, the valuation's discount to industry multiples, such as for CGC, Cronos (NASDAQ:CRON), Tilray (NASDAQ:TLRY) and Aurora Cannabis (NYSE:ACB); and the lack of third-party participation in the bidding (the acquisition agreement does not even include a "Go-shop" provision).OK so what now? What could be the impact on CGC? It's true that Marcato Capital Management has a relatively small position in the company. But then again, agitation from an activist shareholder can attract other like-minded investors. The result is there will likely be more pressure to change the deal.Yet this type of deal is unusual because it is conditional on the potential overturning of a federal law. Despite all the optimism, it is far from clear when there could be a change. Let's face it, when it comes to the government, things are usually fairly slow. This definitely bolsters CGC's position when it comes to the valuation.In other words, both sides have valid arguments. Bottom Line on Canopy Growth StockFor CGC stock, I think the deal for ACRGF is spot-on and is structured right. But I also believe there will need to be a bump-up on the valuation to get the transaction to a clean close. And given the huge opportunity in the U.S. market, I think this will be well worth in.In the meantime, Canopy Growth stock is still positioned nicely to grow even without the deal. The company has built an integrated global platform that has the backing of $4 billion from Constellation Brands (NYSE:STZ). CGC also should continue to benefit from the Canadian market as well as the cannabidiol (CBD) opportunity. But again, I think the story gets even better with ACRGF.Tom Taulli is the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Dividend Stocks to Buy as the Trade War Reignites * 10 Stocks That Could Squeeze Short Sellers, Including CGC * 5 Tech Stocks Getting Crushed Compare Brokers The post Canopy Growth Stock Is a Good Buy Even If the Acreage Deal Collapses appeared first on InvestorPlace.
Acreage Holdings, Inc. (“Acreage”) (ACRG-U.CN) (ACRGF) (FSE:0ZV) today announced it has entered into a Letter of Intent (the “Letter of Intent”) with GreenAcreage Real Estate Corp., a newly formed REIT (“GARE”), negotiated at arm’s length, under which GARE would purchase and lease back to Acreage cannabis related real estate assets. GARE is externally managed by GreenAcreage Management LLC, an entity in which Acreage holds a 20% interest (“GreenAcreage”) and in which its CEO has invested.
Women in the cannabis industry use various tactics to counter the stigma of working in the nascent field.
A few months ago, I was thinking that medical marijuana would become legal in the United States by 2023, with recreational use to follow a few years later. I now expect it to be much sooner than that. And everyone who owns cannabis stocks stands to benefit-- perhaps by the 2020 election.One Republican who's close to President Trump, Dana Rohrabacher, is expecting it even SOONER: "as early as spring of 2019."Well, that's about where we are now. So it's time to get positioned in high-quality cannabis stocks with U.S. operations, if you haven't already.InvestorPlace - Stock Market News, Stock Advice & Trading TipsNearly every Democratic presidential candidate has called for legalization. According to the insiders I've spoken with at cannabis conferences, President Trump is moving closer to introducing such a policy as well. The tax revenues alone would be more than any politician could pass up. * 7 Cloud Stocks to Buy on Overcast Days Already, the dominos are starting to fall -- which brings me to the first pot stock to own BEFORE legalization hits: Canopy Growth (CGC)One of the most important developments in the history of the U.S. marijuana industry hit the headlines just before the Easter holiday. Canadian cannabis giant Canopy Growth (NYSE:CGC) announced that once legalization is passed, it will buy a U.S.-based marijuana company called Acreage Holdings (OTCMKTS:ACRGF).Acreage already operates in 20 U.S. states, and was one of the first to tackle the East Coast market. Founder and CEO Kevin Murphy is a Wall Street transplant -- and incredibly well connected. Acreage's board includes three of the most important people on the planet: former U.S. Speaker of the House John Boehner, former Massachusetts governor and current presidential candidate William Weld, and former Prime Minister of Canada Brian Mulroney.Acreage has another advantage: the ability to manufacture and distribute on a national scale. That's thanks to its late-2018 acquisition of Form Factory.Canopy has already created billions in wealth for its shareholders, as you can see in the chart below. Imagine what it can do as the biggest player in the much-larger U.S. market.With marijuana illegal in the United States, pot stocks based here are still in the earlier part of that chart. The legal limitations result in the stocks trading at a major discount to their Canadian peers (for the moment). So, let's take a look at some of our highest-quality options. Innovative Industrial Properties (IIPR)Innovative Industrial Properties (NYSE:IIPR) is the only publicly traded marijuana real estate investment trust (REIT) - a vehicle that owns assets and must pay out 90% of its profits to shareholders.I've always loved the company's business model. It buys grow facilities from the growers, often providing them with much needed money for their businesses, and then leases the land back to them. Innovative Industrial Properties receives an initial base rent of 10%-16% of the total investment, and rent grows approximately 3%-4.5% a year. A typical lease is 10-20 years, with the targeted size of the initial deal from $5 million to more than $30 million.It's a win for the growers and a win for the company, which has grown to a market value of $780 million by repeating that acquisition and leaseback model over and over. As marijuana moves toward legalization in the United States, Innovative Industrial Properties is undoubtedly the best positioned real estate business.Not only is Innovative Industrial Properties the only marijuana stock to pay a dividend, it was the first to list on a major U.S. exchange. It began trading on the NYSE on December 1, 2016. Today, Innovative Industrial Properties is indeed the clear leader in marijuana real estate. Early investors have made a lot of money along the way…and many more will rush in the moment marijuana is legalized federally. iAnthus Capital (ITHUF)In October, iAnthus Capital (OTCMKTS:ITHUF) was part of the biggest marijuana merger of the time. By buying MPX Bioceuticals, iAnthus now has operations in 11 states, more than 60 retail locations, and over 500,000 square feet of cultivation and processing space.Most importantly for us as investors in marijuana stocks -- iAnthus is expected to be one of the first to turn a meaningful profit.iAnthus released its fourth-quarter numbers on April 2, with quarterly revenue coming in at $2.2 million on full-year sales of $4.5 million. Specifically, iAnthus generates revenue in nine of the 11 states it is currently approved to do business in. California should join that list as No. 10 in the next couple of months. The company has 21 dispensaries open with the ability to open 40+ more. It has a total of 200,000 square feet in cultivation and processing facilities in nine states and the potential to increase that to as much as 580,000 square feet.And it's about to expand even further. On March 29, iAnthus also announced that it would purchase CBD for Life, a national cannabidiol (CBD) brand in the United States. Its products are currently available in more than 750 retail outlets throughout the country. That number will likely skyrocket once marijuana is legal in every state. Charlotte's Web (CWBHF)No list of my favorite U.S. cannabis stocks is complete without Charlotte's Web (OTCMKTS:CWBHF), my pick for the InvestorPlace Best Stocks for 2019 Contest.Charlotte's Web is the world's leading brand by market share in the production and distribution of CBD wellness products. It gets its name from a five-year-old girl named Charlotte Figi whose grand mal seizures were drastically reduced -- from 300 per week to just two or three a month -- thanks to this company's high-quality CBD oil. It's an amazing story, and just one example of why this industry is set to grow 40X in the coming years.For these reasons, Charlotte's Web's jump to a major stock exchange in either the U.S. or Canada is inevitable, and I suspect the announcement is right around the corner. I see the company garnering more and more market share as CBD oil hits the shelves in CVS Health (NYSE:CVS) and Walgreens (NASDAQ:WBA) stores… just for starters. I Also Like Penny Pot Stocks. Here's WhyCanopy, Innovative Industrial Properties, iAnthus, and Charlotte's Web are the heavyweights in their markets. All of them started out as penny stocks.For that matter, so did Coca-Cola (NYSE:KO), Apple (NASDAQ:AAPL), Netflix (NASDAQ:NFLX), and Microsoft (NASDAQ:MSFT). But people who invested with Steve Jobs and Bill Gates when they were operating out of garages are now, of course, incredibly wealthy. And these companies went from just a couple of employees -- to employing millions worldwide.You might own AAPL stock yourself. But many of the gains have already been made. For example, in the last two years, it's up 24%. In the same time, IIPR is up 387%, and CGC is up 480%.Think about it: It's easier to go from $0.50 to $3 per share, than it is to go from $200 to $1,200 per share.And while these stocks are so tiny, the "big money" on Wall Street is locked out. But not us. Click here to learn more.I've got a whole presentation for you on all the reasons I like penny pot stocks with U.S. legalization around the corner. But it boils down to their ability to innovate.It's about buying the equivalent of Apple before the iPhone… not Apple once it's cranking out more expensive versions of the same product.Now, when it comes to penny stocks, you've got to weed through a lot of trash. Let me show you my five-step method for picking the RIGHT penny stocks.After my presentation, you'll have the chance to learn about the four penny pot stocks my research is highlighting now. Actually, I'll throw in a fifth penny pot stock just for fun.With legalization about to hit possibly in the next few weeks - it's now or never.Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of Investment Opportunities and Early Stage Investor. He has dedicated his career to getting investors into the world's biggest, most revolutionary trends BEFORE anyone else. The power of being "first" gave Matt's readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA), +1,044% in Tesla (TSLA), +611% in Liquefied Natural Gas Limited (LNGLY), +324% in Bitcoin Services (BTSC), just to name a few. If you're interested in making triple-digit gains from the world's biggest investment trends BEFORE anyone else, click here to learn more about Matt McCall and his investments strategy today. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Cloud Stocks to Buy on Overcast Days * 6 Stable Stocks Worth Buying for Protection * 5 Active Vanguard Funds That You Have to Own Compare Brokers The post 4 Pot Stocks to Own for Full-Blown Federal Marijuana Reform appeared first on InvestorPlace.
Acreage Holdings, Inc. (“Acreage”) (ACRG-U.CN) (ACRGF) (0VZ.F) announced institutional investor conferences it will attend in May, and its first quarter 2019 earnings release date. Acreage will announce first quarter fiscal 2019 financial results after the market closes on May 28, 2019. Acreage Management will host a call to discuss the results on May 29, 2019, at 8:30 AM Eastern Daylight Time.
Acreage Holdings (“Acreage”) (ACRG-U.CN) (ACRGF) (FSE:0ZV) today announced the appointment of Christine Rigby as Vice President of Investor Relations. Rigby will partner with Steve West to develop and strengthen the company’s investor relations strategy and framework to deliver its vision to all shareholders. Rigby will also help drive strategic initiatives with Acreage’s management team.
Not all investors are happy with the big attempt of Canopy Growth (CGC) to push into the U.S. cannabis market. In fact, one large shareholder wants the surprise move to purchase Acreage Holdings (ACRGF) via a right in the future blocked. Small investors might want to look at other U.S. cannabis multi-state operators (MSOs) due to the unknown risk surrounding the Acreage Holdings deal closing and specifically the timing of the deal.Investment Manager Will Vote Against The DealMarcato Capital Management LP sent a letter to the board of directors of Acreage claiming the investment manger would vote against the deal. Marcato Capital only has 2.7% of the outstanding shares via owning 575,000 shares, but the investment management team carries a lot of clout on Wall Street.For a recap, the Acreage deal involves a $2.55 per share upfront payment or $300 million to investors for waiting for federal approval of cannabis plus an agreement to receive 0.5818 shares of Canopy Growth once the deal closes. In total, the deal values one of the biggest MSOs in the U.S. at only $3.4 billion.At the current stock price of $49, Acreage shareholders have a right to Canopy Growth stock worth $28.50 plus the $2.55 payment. The stock still trades right below $21 on the deal news so the market isn’t too confident that federal approval will allow the deal to close any time soon.Lost ValueMarcato Capital thinks Acreage has a fair value far in excess of the deal value of $3.4 billion. The investment manager expects the enterprise values of cannabis companies will skyrocket upon the relaxation of Federal restrictions so selling out the company prior to that approval is irrational.The investment manager estimated that Canopy Growth gained in value equivalent to $3.5 billion to suggest the deal was under priced by 50%. In addition, the deal via stock offers no value to Acreage shareholders.Based on calculations from Marcato Capital, Canopy Growth trades at an EV of 178.2x consensus ’20 EBITDA estimates versus Acreage at 20.7x ’20 EBITDA estimates of $164 million. One really has to question why somebody would want to transfer stock from Acreage to Canopy Growth at some unknown future date.The move is even more troubling considering the vast opportunities in the U.S. cannabis market that is estimated to reach $80 billion by 2030. The problem is that Canopy Growth now has a market valuation of nearly $17 billion while the CEO only expects revenues to top C$1 billion or ~$700 million in the next 12 months. Based on these differences in valuations encompassed in this graph from Green Thumb, the opportunity is logically in the U.S. MSOs and not the Canadian LPs.Source: Green Thumb Industries presentationTakeawayThe key investor takeaway is that Marcato Capital has a solid point that Acreage Holdings appears to be cashing out at the wrong time and into the wrong stock. The opportunity remains in the U.S. cannabis market with an MSO, not a Canadian LP with an inflated stock price and needing access to global markets to justify inflated valuations.The noise being made by Marcato Capital isn’t likely to alter the rights deal for Acreage Holdings and one has to question the motivation of the management team. Investors are better to use this market knowledge to find an MSO aggressively expanding in the largest cannabis market in the world.To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here. Disclosure: The author has no positions in Acreage Holdings stock. More recent articles from Smarter Analyst: * Putting General Electric Management Under the Microscope Is Bad News for GE Stock * Tesla (TSLA) Stock Isn’t a Bargain, Despite Recent Sell-Off, Says Needham * Analysts Pound the Table on Pareteum (TEUM) Stock * Amazon (AMZN) Stock Poised for Continued Growth; Here's Why
Cannabis stocks were mostly lower Tuesday, weighed down by weakness in the broader market after U.S. officials said tariffs on imported goods from China could be raised by the end of the week.
Acreage Holdings (OTCMKTS:ACRGF), the New York City-based cannabis company recently accepted Canopy Growth's (NYSE:CGC) $3.4 billion offer to merge once the U.S. government legalizes cannabis at the federal level. The tentative deal did wonders for both Acreage and CGC stock. Source: Shutterstock Marcato Capital Management owns 2.7% of Acreage. It opposes the transaction on the grounds the valuation isn't nearly enough. The news has put a tiny dent in both company's stock prices. Long term, I believe Marcato's temper tantrum will do little to CGC stock, but hurt Acreage's stock immensely. Here's why. Caving to Marcato Would Do Irreparable Harm to Acreage StockIs it just me or are activist investors getting way too much freedom these days to pound their drum when investments they've made aren't going as planned?InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Strong Buy Stocks That Tick All the Boxes Since when did a 2.7% ownership interest in any public company represent a quorum? It's not even close. It's like a neighbor complaining about the sale of a property next door to a known developer. You can scream and shout and protest all you want but your ownership, or lack thereof, gives you very little say beyond the municipality planning rules, to stop whatever plans the developer has for the property. Yet, the public markets are held ransom by investors like Marcato, who get on their soapbox to whine until they get their way. "We believe Acreage's strategic value, as one of the few multi-state operators of scale in the U.S., with leading positions in the most valuable markets merits a significant premium to any stand-alone cash-flow derived valuation," Marcato stated in its letter to the investing public and Acreage's board of directors. "Furthermore, we believe enterprise values of cannabis companies will skyrocket upon the relaxation of current Federal restrictions. Accordingly, Marcato believes it is highly imprudent for Acreage to sell itself today at the proposed valuation, with so much unlocked growth and value embedded in the Company."Would've, could've, should've. Marcato can't possibly know what the future holds. It's putting the other 97.3% of Acreage shareholders at risk in a move that itself is "value destructive" and possibly irreparably harmful to the company's share price. A Smaller Piece of a Bigger PieThe last time I checked, Acreage had $21.1 million in annual 2018 revenues and an adjusted EBITDA loss of $9.6 million. By comparison, Canopy had C$132.3 million in net revenue through the first nine months of fiscal 2019 and an adjusted EBITDA loss of C$69.0 million.This deal will see Acreage shareholders join forces with one of the world's largest cannabis companies; a company that's got the full support of Constellation Brands (NYSE:STZ), itself operating one of the world's largest alcoholic beverage businesses, and very skilled at global distribution. So what happens if Marcato gets its way and the deal is scuttled?I believe CGC stock will carry on, business as usual, while Acreage stock will struggle to find buyers should shareholders vote down the deal. Not to mention, Canopy Growth would likely make a vigorous fight to collect the $150 million break-up fee from Acreage. More importantly, why haven't we heard more opposition to the deal from Acreage shareholders?"This really does appear to be a singular opinion, inconsistent with the positive feedback we have been getting from our shareholders since the deal was announced," Howard Schacter, Acreage's head of communications told the Financial Post.They say the best deals are those where both sides win something from the transaction and also lose something. In the case of Canopy Growth, the big positive is that it moves the company closer to U.S. cannabis. The downside is it puts Canopy Growth in wait mode while other competitors figure out how to gain legal entry to U.S. cannabis, potentially leapfrogging over it. For Acreage, the positive is that it gains a guaranteed price for its business regardless of whatever its U.S. competitors do to grow their revenues. Sure, it's possible that Acreage will become the leading producer of cannabis in the U.S. in five years. It's also possible that it won't, leaving the company on the outside looking in. The downside for Acreage is that it will give up the chance to fetch a better price from another suitor -- the argument Marcato's making -- depriving its shareholders of a better payday. The Bottom Line on CGC StockI think Canopy Growth CEO Bruce Linton has pulled off an extraordinary move by aligning it with Acreage, one of the more politically savvy U.S. cannabis companies, without having to expend more than $300 million in near-term cash. Acreage gets a substantial sum to continue building its business across 20 states while Canopy gets an ear to the U.S. market. In my opinion, it's a win/win situation. * 6 Growth Stocks to Buy for the Rest of 2019 But make no mistake, if Marcato gets its way, CGC stock won't be the loser in the deal. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Strong Buy Stocks That Tick All the Boxes * 7 Stocks to Buy From the T. Rowe Price Health Sciences Fund * 5 Tech ETFs to Plug In to Big Profits Compare Brokers The post An Activist Investor Unwisely Wants to Cancel Canopy Growth/Acreage Deal appeared first on InvestorPlace.
Cannabis stocks were mostly lower Monday, with market leader Canopy Growth Corp. under pressure from an activist shareholder that said it would vote against a key deal aimed at securing Canopy a foothold in the U.S.
Investors betting on marijuana stocks got some disappointing news out of Canada last week. Statistics Canada reported that Canadian marijuana retail sales declined by 7% in February compared to January.Source: Shutterstock On the surface, that decline may seem troubling, but it's not actually as bad as it seems. There is plenty of demand for Canadian marijuana. Unfortunately, there is not nearly enough supply to meet that demand. As a result, Canadian producers are in high demand, a dynamic that bodes well for marijuana stocks. Consolidation AheadThe drop in Canadian retail sales in February underscores just how critical the marijuana supply issue is. Typically, as demand for a particular product grows naturally, supply grows alongside demand and the market stays balanced. In the case of marijuana, demand has and will not grow at a steady, natural pace. Canadian demand was constrained up until last year by a federal ban on recreational marijuana use. Now that that ban has been lifted, there is a boom in demand. Suppliers can't keep pace.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Vice Stocks to Spice Up Your Portfolio The situation in Canada is a potential preview of the problems the marijuana industry will face if marijuana is ultimately legalized in the U.S. as well. Marijuana producers are frantically trying to beef up their production, but they are facing an uphill battle. In addition to limited capacity, Canadian marijuana stocks have limited access to U.S. capital. Most banks are unwilling to deal with the headache of investing in companies running operations that are still technically illegal in the U.S. at a federal level.In a nutshell, there are dozens of small-time Canadian and U.S. marijuana companies putting their pedals to the medal to ramp up production. Unfortunately, companies with limited resources can only grow so fast organically. As a result, there has been a flurry of marijuana buyouts and partnerships. That trend will likely continue in the coming years.Given the current supply-constrained environment, the biggest buyers could end up dominating the market in the long-term. In addition, the biggest buyout targets could command a hefty premium given the limited supply. Likely Buyer: Canopy GrowthCanopy Growth (NYSE: CGC) has already been aggressively adding to its capacity. In late April, Canopy announced a $3.4 billion conditional buyout of U.S. marijuana producer Acreage Holdings (OTCMKTS:ACRGF). The deal is contingent upon U.S. federal marijuana legalization. Bank of America analyst Christopher Carey says investors can expect plenty more buyout deals ahead for marijuana stocks like Canopy."We think Canopy showed that there are many options for Canadian marijuana companies to create value, and with Canada supply chain constraints likely to sustain near-term, we see potential that more deals are announced, potentially in the US, in the coming months," Carey says.Canopy has $3 billion in cash on hand but only had to commit $300 million up-front for Acreage given the conditional nature of the deal. Canopy has become the leader in Canadian production. It will likely be aggressive in establishing a similar position in the U.S. market. CGC stock investors can expect Canopy to pursue similarly structured deals with other U.S. producers. If Canopy is aggressive, it can have its pick of the top U.S. producers, leaving competitors to pick up the scraps once marijuana is legalized in the U.S. Potential Seller: HexoIn addition to the best potential marijuana buyer, Hexo (NYSE: HEXO) could be the best buyout target. With a market cap of under $1.7 billion, Hexo is certainly large enough to make a difference without being too big to digest. Carey says Hexo is relatively low-risk as far as Canadian marijuana stocks go. HEXO stock should benefit from its five-year contract as the official supplier of the province of Quebec. It is also expanding its own capacity with smaller deals, including the recent $260 million acquisition of Newstrike Brands.There are two key reasons why Hexo stock stands out as the best potential buyout target. First, Carey says HEXO stock is a rare value among marijuana stocks."We think Hexo is the most attractively valued stock in our coverage group based on our valuation framework of EV/sales (near-term delivery) and DCF (long-term value creation)," Carey says.Carey says Hexo trades at a discounted valuation to its larger-cap peers due to its limited capacity for global expansion. However, this limited global growth trajectory is the second reason HEXO stock makes a great buyout target. If Canopy, Aurora Cannabis (NYSE: ACB) or even a U.S. tobacco company like British American Tobacco (NYSE: BTI) decides to make a big splash with a deal, they have the global presence to get the most value out of Hexo's limited operation. * 7 Energy Stocks to Buy to Light Up Your Portfolio Takeaway For Marijuana StocksThe Canadian sales drop highlights just how much of a mess the marijuana market is in these days. Too many suppliers have too little capacity and limited ability to grow organically. As a result, a wave of consolidation among marijuana stocks is inevitable. The long-term winners of this consolidation will be potential buyers like CGC stock and potential sellers like HEXO stock.As of this writing, Wayne Duggan did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Energy Stocks to Buy to Light Up Your Portfolio * 10 Vice Stocks to Spice Up Your Portfolio * 7 of the Best ETFs to Buy for a Slowing Economy Compare Brokers The post 2 Marijuana Stocks to Buy Despite Declining Canadian Sales appeared first on InvestorPlace.
Marcato also sent a letter to Acreage's Board of Directors, which can be found below. Marcato Capital Management ("Marcato"), the beneficial owner of 575,000 shares, or approximately 2.7% of the outstanding Subordinated Voting Shares of Acreage Holdings, Inc. ("Acreage" or the "Company"), has significant capital markets experience and a long track record of working collaboratively with boards of directors to uncover strategies to enhance value. As a large Acreage shareholder, we will be voting against the proposed transaction with Canopy Growth Corporation ("Canopy") as we believe this is a value destructive transaction and not in the best interests of shareholders.
The Democratic presidential front-runner has a long history of being anti-cannabis, but his views on the topic may be evolving.
Acreage Holdings, Inc. (“Acreage”) (ACRG-U.CN) (ACRGF) (FSE:0ZV) announced it has publicly posted a letter to shareholders from Kevin Murphy, Founder, Chairman, and Chief Executive Officer of Acreage (the “Letter”) regarding the proposed transaction with Canopy Growth Corporation announced on April 18, 2019 (the “Proposed Transaction”) along with responses to various frequently asked questions (“FAQ”) received by Acreage in connection the Proposed Transaction. To access the Letter and the FAQ, please visit Acreage’s investor relations website at investors.acreageholdings.com, where you will find links to the documents on the main menu bar.
Despite shares underperforming in the weeks since the deal was announced, Acreage Holdings CEO Kevin Murphy defended his company's agreement to be acquired by Canopy Growth.
Retired Major Tye Reedy, now the director of operations services at marijuana company Acreage Holdings, is in danger of losing his Army pension.
Think BIG, a new brand of cannabis, is out to raise awareness for criminal justice reform — all while paying homage to hip-hop legend The Notorious BIG. The California-based social movement strives to promote art and creativity through the sale of recreational marijuana use. Think BIG Founder CJ Wallace and Co-Founder and President Willie Mack sat down with Yahoo Finance’s Julie Hyman and Adam Shapiro to break down how the company got started and what’s next for Think BIG.