|Day's Range||1.9500 - 1.9500|
New York’s Carolyn Maloney expressed optimism about the House approving the SAFE Banking Act. The bill would open banking access to the cannabis industry.
LEAMINGTON, ON , Aug. 23, 2019 /CNW/ - Aphria Inc. ("Aphria" or the "Company") (TSX: APHA and NYSE: APHA), announced today that it has filed a preliminary short form base shelf prospectus (the "Shelf Prospectus") with the securities regulators in each province of Canada , except for the Province of Quebec , and a corresponding shelf registration statement on Form F-10 (the "Registration Statement") with the United States Securities and Exchange Commission (the "SEC"). The filing of the Shelf Prospectus satisfies one of the Company's contractual obligations to its syndicate of underwriters in connection with the US$350 million of convertible senior notes issued by the Company on April 23, 2019 .
Sundial Growers has successfully entered the Saskatchewan cannabis market. The company wants to set up operations in all provinces by the end of 2019. Saskatchewan is a unique Canadian market where licensed cannabis producers can sell directly to retailers. Cookies, a lifestyle and cannabis brand in North America, formed a partnership with Gage Cannabis Co., […]The post Cannabis Stock News Daily Roundup August 23 appeared first on Market Exclusive.
Hexo Corp (NYSE:HEXO) continues to feel the impact of its underwhelming Q3 earnings, a slower than expected recreational cannabis market in Canada, and concern over corporate leadership in the industry. Hexo stock is down 13% from Monday's open, and is now trading right around the $4 mark.Source: Shutterstock This continues a slide that began after HEXO hit an all-time high of $8.28 in April, and worsened after another quarter of red ink and the departure of its co-founder from his executive role. HEXO Underwhelmed in Q3On June 12, HEXO reported Q3 earnings and failed to impress investors. The company missed badly on revenue ($13 million CAD compared to the $14 million analysts were looking for) and the red ink was worse than expected, with a quarterly loss of $7.75 million -- up from a loss of $1.97 million the previous year. The company announced plans to enter the U.S. CDB market through a joint venture with Molson Coors Brewing Co (NYSE:TAP), but that is fast becoming a crowded field and investors weren't overly impressed. Hexo stock dropped over 8% on the results.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Marijuana Stocks That Could See 100% Gains, If Not More HEXO is expected to report Q4 earnings in September. Investor Nervousness Around Cannabis IndustryMany investors piled onto Canadian cannabis stocks over the past year, looking for the legalization of recreational pot in Canada to result in a boom market. The reality has been a little harsh for some.Slower than expected initial sales of recreational pot led to cannabis stocks tumbling in the days after recreational marijuana use was legalized in Canada last October. There were no line-ups at Canadian cannabis retailers and product shortages were reported as a result of glitches in distribution and production. While the situation has improved, recreational pot still isn't exactly flying off the shelves in Canada.Adding to investor unease, 2019 has seen considerable drama among Canadian cannabis companies, and HEXO has not been immune. In January, the CEO of Aphira (NYSE:APHA) left the company amid allegations of improprieties regarding acquisitions in Latin America. On July 10 the CEO and co-founder of Canopy Growth (NYSE:CGC) was forced out of his role, and didn't leave without igniting controversy over his dismissal.Just days later on July 18, HEXO's co-founder stepped down from his role of Chief Brand Officer, although he retained his seat on the board.The most recent headlines were centered around CannTrust Holdings (NYSE:CTST), which became the center of Health Canada and Ontario Securities Commission investigations over illegal cannabis cultivation at one of its facilities. The fallout there has included the firing of the CannTrust Holdings CEO and the forced resignation of the company's co-founder and chairman. The series of leadership shakeups and missteps has certainly not helped cannabis stocks in 2019, although the corporate transitions are expected to put many of these companies in stronger positions for the long term. How Does Hexo Stock Performance Compare to Cannabis Cohorts?Even after this week's 13% drop and a decline in Hexo stock price of around 40% since it reported Q3 earnings in June, HEXO is performing reasonably well on the year compared to its fellow Canadian cannabis stocks. Year-to-date growth is 6.5% for HEXO, while Aurora Cannabis (NYSE:ACB) is up 11% and Aphira has gained over 8%.However the biggest of the Canadian cannabis producers Canopy Growth has lost 13% since the start of the year. CannTrust Holdings -- the company that kicked off the latest round of concern about the industry -- has dropped some 64% so far in 2019. * 7 Retail Stocks to Buy on the Dip The question for HEXO investors is whether the company's Q4 earnings are going to going to be as underwhelming as Q3's were. If so, the Hexo stock price slump that started in April could well continue through the fall. And HEXO doesn't have far to drop before it goes into the red for 2019…As of this writing, Brad Moon did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Retail Stocks to Buy on the Dip * 7 Marijuana Stocks With Critical Levels to Watch * 7 Internet of Things Stocks to Buy Now The post Hexo Stock Continues to Feel the Effects of Cannabis Industry Issues appeared first on InvestorPlace.
Only two months ago, Seaport Global was taking a cautious stance on Canadian cannabis company Aphria (APHA), cutting estimates for both sales and earnings in part on worries about oversupply in the Canadian market. Two months later, and with Aphria stock down 8%, Seaport is changing its tune on Aphria -- for the better.In a note published Thursday, Seaport analyst Brett Hundley reiterated his "buy" rating and $13 price target (which he had lowered in June) on Aphria stock. For perspective, Aphria’s stock closed at $6.51 yesterday, so this implies upside of nearly 100%. (To watch Hundley's track record, click here)The analyst described two possible, positive outcomes of the marijuana supply debate in Canada, gleaned from conversations with Aphria management earlier in the week.In one scenario, the analyst expressed doubt that "Canadian oversupply will develop, as many pundits expect." Investment capital has been harder to come by for Canadian cannabis companies of late, you see. And with less capital, there's less money available for expanding production capacity. Less capacity, less cannabis -- and as a result, less (or no) oversupply!Similarly, consolidation within the industry could give rise to more rational actions among the remaining players, who might limit supply in order to support prices.The second scenario seems similarly benign. Assume supply does surge, driving down prices for dried marijuana flower. That won't necessarily hurt sales or profits for Aphria (or other cannabis players) however, if they are able to pivot to focus on production of higher value-added products such as vapes and edibles. As Hundley explains: Aphria "management believes that more than enough extraction capacity is coming into place ... to handle the new 2.0 market, and it believes that pricing will find an equilibrium across the market, as declines in flower are offset by benefits from higher value-added product prices."Result: Despite broad concerns of oversupply in the industry, Aphria management "seemed confident on reaching its $1B revenue run-rate by December, 2020."Now, it's important to make a distinction here between "revenue run-rate" and "revenue," period. By Hundley's estimation, Aphria will only actually do about C$662 million in revenue in 2020, although if it does even that, it will equate to 256% growth from 2019 revenues. The $1 billion "run-rate" target refers to Aphria's intention to accelerate production throughout the year, finally reaching a point at the end of 2020 at which it will be churning out roughly C$1 billion in sales per year. Hundley, by the way, is taking Aphria at its word on this -- the analyst's projection is for sales to get within a whisker of C$1 billion in 2021 -- C$972.6 million.Also worth pointing out: Both of these sales estimates, for 2020 and 2021, are up significantly from what Hundley was projecting just two months ago -- further evidence that the analyst sees worries of marijuana oversupply abating.Final point, regarding profits. As far as profits go, Hundley predicts none of those this year, but positive "adjusted earnings before interest, taxes, depreciation, and amortization" of C$68.2 million in 2020, growing 116% to C$147.2 million in 2021.No word on net profits of course. Then again, that's par for the course in marijuana-land. In the immediate future at least, there will be none.All in all, Wall Street sizes up APHA as a ‘Moderate Buy’ stock, as the bulls edge out the cautious on the cannabis maker. In the last 3 months, Aphria stock has received 4 bullish ratings versus 2 analysts hedging their bets, and 2 bearish ratings. Importantly, the consensus price target of $10.57 hints there could be over 60% upside for investors from current levels. (See APHA's price targets and analyst ratings on TipRanks)
Today, Aphria announced a deal with ParcelPal to deliver medical cannabis to patients. Also, Cole Cacciavillani's son has won a cannabis store license.
[Editor's note: This story will be updated each week with new stocks and analysis. Please check back often for Mark's latest take on marijuana stocks.]In financial markets, there are certain levels that are more important than others with regards to the amount of supply and demand that exists at them. In addition, in financial markets, prices are always doing one of three things. They are going up, going down or staying the same.When understood and applied correctly, technical analysis of the marijuana stocks should be an illustration of these dynamics in this sector.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut technical analysis has a bad reputation and I can understand why. Most technical analysts don't seem to understand what they are supposed do. They mindlessly look at markets and try to identify patterns without understanding what they are supposed to mean.Even worse, some analysts are proponents of strange methods like Elliot waves and Gann theory. These methods are like Bigfoot. They are fun to talk about, but they aren't real. * 10 Marijuana Stocks That Could See 100% Gains, If Not More Knowing where the important levels are can help you profit. For example, suppose you want to buy a stock when it gets to $5 a share. If there is support at $6 and you don't realize it, the stock could drop to $6 and then rally. You would have missed a nice profit for one dollar because you didn't know about the support. Marijuana Stocks to Watch: Canopy Growth (CGC)Canopy Growth (NYSE:CGC) has been trending lower since the end of April. Since then, the CGC stock share price has dropped by 50%.Even getting rid of idealistic Co-CEO Bruce Linton didn't convince investors that things would turn around. The bottom line here is that Canopy loses a lot of money and shareholders are starting realize this. The latest earnings report showed them posting a loss of CA$257 million.After that earnings report, the stock dropped from $32 to $28 and it has been trending lower since then.If it trades down to the $25.50 level, it may rebound a bit. That is where it found support in December and it is currently oversold. Cronos Group (CRON)Cronos Group (NASDAQ:CRON) grows and sells marijuana.After failing to break resistance around the $14 level, CRON stock has dropped by about 15%. It may keep going lower, because I don't see any well-defined support levels.This stock shows how resistance levels become support and then support becomes resistance. This is an amazing phenomena that few consider.Clearly the $14 level is important here. Those who sold it at $14 in September and December were happy when it went lower. But then, when it went higher, these sellers believe that they have made a mistake. They tell themselves that if it comes back to $14, they will buy it back. This demand will create support. * 11 Stocks Under $10 to Buy Now Support becomes resistance because when the stock goes lower, those who bought it at the support level are now losing money. They tell themselves that if it trades back up to the level, they will sell it to break even. This supply of stock at the level creates resistance. Aurora Cannabis (ACB)Aurora Cannabis (NYSE:ACB) is a Canadian-based company that grows and sells medical cannabis.Since failing at resistance at the $7 level, ACB stock has trended lower. There is resistance around this level because it was support in June. It the stock rallies back to $7, that level will probably be resistance again.If it continues to trend lower, it may find support around the $5 level. This is because this level was support in November and December.I believe that this company will continue to have difficulties. A large part of the valuation is Goodwill and intangibles assets. This is an issue because these values are extremely hard to calculate, and companies tend to overestimate them. In my opinion that is the case here. CannTrust Holdings (CTST)CannTrust Holdings (NYSE:CTST) is involved in the production and distribution of medical cannabis.Over the past month, there has been support around the $2 level. However, this level seems to be breaking, and this company is facing the very real prospect of bankruptcy. It is currently undertaking a strategic review.This company is now known on Wall Street as Can't Trust Holdings. CTST was recently found to be growing cannabis in unlicensed grow rooms that were literally hidden behind fake walls.Even worse, not only was the senior management aware of this, they seemed to be encouraging it. We know this because they were stupid enough to put it in emails that the Canadian Authorities have seized. * The 10 Best Marijuana Stocks to Buy Now Since then, the company has had to accept product returns and will soon be facing a series of lawsuits by investors who were defrauded. My guess is that other companies are also engaged in this type of illicit activity, and if so we will soon be hearing about them as well. Aphria (APHA)Aphria (NYSE:APHA) produces and sell medical cannabis.Investors should watch for resistance around the $6.30 level. That is because is was a support level from May through July. Remember, those who bought it at $6.30 are losing money, so they decide to sell it if it gets back to the level.However, this level may not be too significant, because it was recently broken to the downside before ACB stock went rallying back up through it. Once a level is broken, it can lose its some of its importance.If it does rally, there will probably be resistance again around the $7.50 level. This level was support in May and June, and then again earlier this month when the stock rallied on what was considered a good earnings release. Supreme Cannabis (SPRWF)Supreme Cannabis (OTCMKTS:SPRWF) produces and sells medical cannabis.SPRWF stock recently found support around the 90-cent level. This level was also support at the end of December.I like this company because its cannabis is sun grown, as opposed to being grown with artificial lights. This method is cheaper and results in a higher-quality product.The company has rallied by over 30% since updating its guidance. The numbers were very impressive. Full year 2020 revenue should be $150 million-180 million CAD. Prior estimates were around $130 million CAD. * 15 Growth Stocks to Buy for the Long Haul For the fourth quarter, the company sees revenue of $19 million CAD versus $3.5 million CAD a year ago. The Street was looking for around $13 million CAD. CURE Pharmaceutical(CURR)CURE Pharmaceutical (OTCMKTS:CURR) develops and manufactures drug formulation and drug delivery technologies.You don't need to be a Market Guru or Master Trader to see that the $4.50 level is important for CURR stock. It was resistance a year ago in August and September, and then again in March.After breaking to the upside in July, it became a support level. Now that the stock has traded lower, it has become a resistance level again.Knowing that there is resistance at this level could help you with your trading decisions. For example, suppose you want to sell it at $5. You need to be aware that it may not get there.Watch how the stock trades around the $4.50 level over the next few days. If it looks like its breaking to the upside, then it could get to your level and it makes sense to be patient. Conversely, if it looks like it is going to fail at this level you may want to sell it because there is a good chance it could go much lower.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 Marijuana Stocks That Could See 100% Gains, If Not More * 11 Stocks Under $10 to Buy Now * 6 China Stocks to Buy on the Dip The post 7 Marijuana Stocks With Critical Levels to Watch appeared first on InvestorPlace.
This initiative between ParcelPal and Aphria will commence with Calgary as the catalyst city. Patients can purchase product from Aphria's online store and utilize the ParcelPal technology platform to receive their product safely and legally. In collaboration with ParcelPal, and MADD Canada are confident that this program will not only enable consumers unfettered access to their medicinal cannabis in a safe and timely manner but will furthermore assist in eliminating impaired drivers from our roadways by removing their need to drive to or from cannabis stores for product.
CALGARY , Aug. 22, 2019 /CNW/ - High Tide Inc. ("High Tide" or the "Company") (HITI.CN) (HITIF) (2LY.F), an Alberta -based, retail-focused cannabis corporation enhanced by the manufacturing and wholesale distribution of smoking accessories and cannabis lifestyle products, today announced that the Canna Cabana retail store located at Unit #3, 5506 50th Avenue in the city of Bonnyville (the "Bonnyville Store") received its first delivery of cannabis products from Alberta Gaming, Liquor and Cannabis ("AGLC") and has begun selling recreational cannabis for adult use. Grand opening festivities will be held at the Bonnyville Store on Saturday, August 24 .
Aphria stock (APHA) has surged 26.4% since the company announced its Q4 earnings results. Will Aphria's growth strategy keep paying off?
On Tuesday, Jim Cramer stated that Cronos Group and Aphria passed Canopy Growth. Canopy Growth has lost 15.3% of its stock value since its Q1 earnings.
It's been almost three weeks since Aphria (NYSE:APHA) announced surprisingly strong fiscal Q4 earnings, sending Aphria stock up by nearly 20%. The headlines about Aphria's results were all very positive. Here are three examples: * Aphria Earnings, Sales Beat, Helped By Distribution; Aphria Stock, Marijuana Stocks Jump- Investor's Business Daily * Aphria Posts Surprise Profit as Cannabis Sales Volumes Double - Financial Post * Aphria Inc. Announces 158% Increase in Adult-Use Sales and Profitable Fourth Quarter- Aphria press releaseSource: Shutterstock InvestorPlace - Stock Market News, Stock Advice & Trading TipsGranted, that last headline was written by the company, but generally, the business media were quite positive about Aphria's return to profitability. * 10 Undervalued Stocks With Breakout Potential Back in early July, I suggested that aggressive investors ought to consider buying Aphria stock because the company's new facility would enable it to to deliver significantly more cannabis. As a result, I thought APHA would be able to make a big push into the vaping market, which is expected to account for 30% of the entire market by 2021. I believed that,in turn, would be a strong positive catalyst for Aphria stock. However, before I put a rubber stamp on APHA stock, I thought I should look at the finer points of Aphria's results to see if I could uncover any red flags that could hurt Aphria stock. The Positives of Aphria's Q4 ResultsAs Investor's Business Daily pointed out, Aphria's overall revenue in Q4 jumped 75% to C$128.6 million, 31% higher than analysts' average estimate. Even better, Aphria's revenue from recreational pot grew 158% year-over-year to C$18.5 million. APHA has two primary revenue streams: Distribution revenue and net cannabis revenue. In Q4, distribution revenue increased 72% versus Q3 to C$99.2 million, while net cannabis revenue jumped 86% quarter-over-quarter to C$28.6 million. Aphria's distribution revenue accounted for 77% of its overall revenue. Most of its distribution revenue is from CC Pharma, the company's German pharmaceutical distribution business, which Aphria acquired last November. APHA generated net profit of C$15.8 million in Q4. It now expects 2020 revenue of C$650-700 million and adjusted EBITDA of at least C$88 million. Also, the number of kilograms of cannabis sold by APHA in the quarter doubled to 5,574, and its average cost of goods sold per gram sank 51 cents to C$2.35 a gram.It's no wonder that APHA stock initially jumped by 40% on the news. The Negative AspectThe biggest negative aspect of Aphria's Q4 2019 report is that its distribution business' gross margin is significantly lower than its gross margin from dried cannabis. In Q4, its distribution business generated a gross profit of C$12,274, 19% lower than the gross profit of its cannabis business. Put another way; cannabis generates 53 cents gross profit for every dollar of sales compared to 12 cents for its distribution business. At the end of the day, while the gross margins of its cannabis operations are impressive, it's going to need its distribution business to start contributing more to the bottom line, either by generating increased medical cannabis sales to pharmacists in Germany or by lowering the distribution unit's overall costs. Until the cannabis side of the business can generate more than the C$100 million of annual sales it posted last quarter, APHA's gross profits will continue to be relatively low, considering its top line. The Bottom Line on Aphria Stock Aphria's business continues to head in the right direction, thanks to the vice-like grip of its chairman, Irwin Simon, on the company. With its cannabis output expected to rise meaningfully, leading to better results in 2020, I continue to see Aphria stock as significantly undervalued compared to some of its bigger peers. On a scale of one to ten, I'd rate APHA's Q4 earnings a solid eight, painting a bright future for the Canadian cannabis company. 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 * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Aphriaas Q4 Earnings Said a Lot About the Outlook of Aphria Stock appeared first on InvestorPlace.
CALGARY , Aug. 20, 2019 /CNW/ - High Tide Inc. ("High Tide" or the "Company") (HITI.CN) (HITIF) (2LY.F), an Alberta -based, retail-focused cannabis corporation enhanced by the manufacturing and wholesale distribution of smoking accessories and cannabis lifestyle products, today announced that the Company will feature its Canna Cabana retail cannabis business in the exhibit hall and during a presentation at the Association of Municipalities of Ontario Conference in Ottawa, Ontario ("AMO Conference"). The presentation entitled "Cannabis Retail: Making it Work for Your Community" will be presented at the AMO Conference by Nick Kuzyk , Chief Strategy Officer & SVP Capital Markets at noon on August 20, 2019 in Confederation Ballroom 2 on the 4th Floor of the Westin Hotel. Currently, there are 3 branded Canna Cabana locations in Hamilton , Sudbury and Toronto, Ontario .
[Editor's note: This article was originally published in July 2019. It has since been updated to reflect changes in the market.]Investing in penny stocks can be appealing to some. And investing in marijuana penny stocks can be even more appealing … if you're willing to take massive risks. But with great risks comes even greater potential rewards.Surely, in an industry with the growth potential of cannabis there must be some stocks out there that are future millionaire makers. But, while every investor has dreams of finding the next Apple (NASDAQ:AAPL) or Amazon (NASDAQ:AMZN) amid the pile of cheap stocks, you need to be very careful when investing in any highly risky area of the markets.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAfter all, these companies are penny stocks for a reason. And most of them will not survive. * 10 Undervalued Stocks With Breakout Potential The following marijuana penny stocks are offer interesting opportunities for investors willing to take risks on the future of the marijuana industry. While note of these are flat-out buys in my book -- you have to make your own decisions -- these companies have all recently had some positive developments that might make them good long-term plays. GrowGeneration Corp (GRWG)GrowGeneration Corp (OTCMKTS:GRWG) sells products for hydroponic growing. GRWG announced in July that it has appointed Bob Nardelli as a strategic advisor. As the former CEO of Home Depot (NYSE:HD), its pretty obvious that he will bring tremendous experience and wisdom to the table.The company just reported its Q2 2019 results and they looked pretty good. Net income was $1,062,000. During the same period last year, the company reported a loss of $929,959. Same store sales were up 23% versus last year's quarter. In addition, the gross profit margin increased to 29.9% from 24.2% for Q2 2018.Despite these positives, the stock is overbought and there is resistance at the $5.05 level, which is just above where it is trading. This level was resistance last year in April and September. 48North Cannabis Corp (NRTH)48North Cannabis Corp (TSE:NRTH) grows and sells medical marijuana. I like this company because it is an outdoor organic grower and I think this type of growing will be the way the industry trends … 48North is already ahead of the curve.The company just announced Charles Vennat as its Chief Corporate Officer. Mr. Vennat is an experienced veteran who was most recently the President of Bastos of Canada. He will drive the company's business plan and strategic vision.The marijuana industry is full of incompetent management teams. Many are comprised of idealistic entrepreneurs who got the business up and running but don't have the skills to manage it as it grows. * 10 Mid-Cap Dividend Stocks to Buy Now Bringing in senior level management could give NRTH an advantage over is competitors that are managed by people with less experience. The company also announced that it has successfully completed its first shipment to the Ontario Cannabis Store. This marks its entry into Ontario's recreational retail market. Body & Mind Inc (BMMJ)Body & Mind Inc (OTCMKTS:BMMJ) is involved in the provision of medical cannabis. This company operates in Nevada, California, Ohio and Arkansas. It just announced that it has qualified to trade on the OTCBQ Venture Market.Typically when a company qualifies to be listed on an exchange investors consider it a positive thing. This will provide greater transparency and more liquidity for the penny stock.In addition, last month, Body and Mind announced that is has been added to the Horizons U.S. Marijuana Index ETF. This will give the company greater exposure to investors.Maybe this news will help turn the price of the stock around. Since April, it is has dropped from $2.60 to 62 cents. Flower One Holdings Inc (FLOOF)Flower One Holdings Inc (OTCMKTS:FLOOF) produces and sells wholesale cannabis. This company just reported its Q2 2019 results and it exceeded expectations.In addition, the company announced that it has also obtained up to $30 million in debt financing and that its stock has been upgraded from the OTCBQ to the OTCQX exchange.From a technical perspective, the stock is at an interesting inflection point. It is testing support around the $1.80 level. This level was also support in March and June. If it breaks, the stock could make a rapid move lower.This is because it gapped up in February and gaps tend to refill quickly. Support is formed when sellers believe they made a mistake selling after the stock goes higher. They tell themselves that if it comes back down to the level they will buy it back. This demand for the stock at a particular level is what forms support. * 7 Vanguard Funds for Conservative Investors Because FLOOF spent such a limited amount of time trading between $1.20 and $1.80 in February, there probably wasn't enough time for meaningful support in this zone. And thanks to this lack of support, the gap could be refilled quickly. Global Hemp Group (GBHPF)Global Hemp Group (OTCMKTS:GBHPF) develops hemp cultivation for cannabinoid extraction. This company recently announced that its subsidiary, Covered Bridge Acres, has completed preparing 35 acres at its Scio, Oregon farm.Most of the large cannabis companies such as Aphria (NYSE:APHA) and Aurora Cannabis (NYSE:ACB) grow their cannabis either in indoor growing facilities or greenhouses. There are advantages to these methods compared to outdoor growing, such as greater security and the ability to grow year round.However, outdoor growing is considerably cheaper. I've seen estimates that the costs are between 10 - 25% of the other methods. In addition, some argue that cannabis that is grown outside is better than cannabis grown indoors. This is because it is grown with natural sunlight and soil.Given these dynamics, companies that are outdoor growers have advantages over the larger indoor growers. As such, I would expect that eventually companies like Global Hemp will be acquired by the larger companies. Global Cannabis Applications Corp (FUAPF)Global Cannabis Applications Corp (OTCMKTS:FUAPF) is involved in the development of smart phone applications for the cannabis industry. This company announced that it has appointed Shay Meir to the position of General Manager, Global Grow Operations.Meir was one of the first 10 Israelis to hold a license to cultivate cannabis. He set up a research lab and worked closely with the Israeli Ministry of Health to research and develop cannabis for medical purposes. * 15 Growth Stocks to Buy for the Long Haul He is a pioneer in the medical cannabis field and his addition to the company should be a positive. Maybe it will help to turn the stock around. It the past year, FUAPF has dropped from 25 cents to 4 cents. Emerald Health Therapeutics (EMHTF)Emerald Health Therapeutics (OTCMKTS:EMHTF) is a Canadian producer of cannabis products. Pure Sunfarms is a joint venture that is 50% owned by Emerald. It just announced preliminary results. The full, second-quarter earnings release will be out on Aug. 28.Pure Sunfarms reported all-in growing costs of 65 cents Canadian to grow one gram of cannabis. In U.S. dollars, that would be about 48 cents.To put this into perspective, consider that Aurora Cannabis recently reported that its cost to produce a gram is $1.42 -- nearly three times as much.In addition, sales increased sequentially by 125% and the company reported its third quarter of profitability. This may not sound like its that big of a deal, but consider that most companies in this industry are losing money and it's a bit more impressive.EMHTF stock continues to hold the $1.50 support level. If this level breaks, we could get a large move lower.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 7 Marijuana Penny Stocks That I May Buy appeared first on InvestorPlace.
For would-be Aurora Cannabis (NYSE:ACB) bulls intent not to get drawn-in and smoked in a promising secular market trend, the suggestion remains the same. Don't fix what isn't broken and stick with the ACB stock price chart rather than outside influences. Let me explain:It has been a month since cautiously writing about ACB stock and putting the cannabis producer on the radar for purchase. But similar to an even earlier discussion of Aurora, action was specific to the price chart. And on each occasion, shares of Aurora Cannabis failed to deliver a "show me the money" signal worth buying into. Thank you, ACB stock. * 10 Cheap Dividend Stocks to Load Up On With ACB stock down another 17% and over 50% removed from last October's all-time-high, is it finally time to look past Aurora's larger-than-expected loss and reduced Q4 revenue guidance delivered in May? Shouldn't investors support the long game in ACB stock as Canada's second-largest recreational and medical player? Maybe.InvestorPlace - Stock Market News, Stock Advice & Trading TipsGiven the decline in ACB stock, doesn't it now make more sense than ever to embrace Aurora Cannabis as a recognized global leader via the company's aggressive acquisition strategy and licensing wins? Again, it's certainly worth thinking about.The truth of the matter is, it's wholly acceptable to buck price weakness and sour sentiment in favor of a promising longer-term investment. And this isn't just advice for ACB stock. Even Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) investors are asking those questions right now.But if the investment in question is ACB stock, you'd be in good company too. Jim Simmons' Renaissance Technologies hedge fund certainly believes in the ACB stock story. Per 13F filings, the famed quant fund has purchased nearly 1.70 million shares over the past two quarters. The fund has also built a smaller position of around 240,000 shares in cannabis peer Aphria (NYSE:APHA).It's good information, but rather than simply get drawn in to Aurora by outside influences, albeit prominent ones, it's also nice to know the ACB stock price chart also supports this investment proposition in today's market. ACB Stock Weekly ChartThere's always the chance of failure when it comes to investments in risk assets like stocks. Right now though, using a solid-looking opportunity on Aurora's price chart in conjunction with an above-the-market buy order and adherence to a technical stop-loss can avoid much larger regrets within one's portfolio.Currently shares of ACB are in a testing position of channel and Fibonacci support backed by the 62% retracement level. I've used 2017's low and that same year's massive breakout in the design of this key support area near $5.50. Also supportive, ACB stock is oversold and generated a stochastics crossover signal a couple weeks ago.My advice today is a familiar approach when it comes to buying ACB stock. I'd recommend investors put Aurora on the radar for purchase if last week's pivot low can hold support, and confirm a bottoming candlestick is in place. It's that simple.Using an entry above $6.75 and setting a stop 10 cents beneath the candle amounts to dollar risk of $1.20 for the position. Size the position accordingly and in return for that exposure, I'd set a price target of $9.75 - $10.50 for taking partial profits which looks sensible off and on the price chart.Investment accounts under Christopher Tyler's management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler's observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional options-based strategies and related musings, follow Chris on Twitter @Options_CAT and StockTwits. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post How to Position Smartly in ACB Stock appeared first on InvestorPlace.
At the end of July, a short seller went after Hexo Corp. (NYSE:HEXO) -- and the market yawned. In fact, the HEXO stock price bottomed the Friday before, gained 9% the day of the report, and even with a pullback is up over 11% since the session before its release.Source: Shutterstock The market's lack of response isn't terribly surprising. Short sellers have had a few high-profile misses of late. In late 2017, Citron Research infamously compared Shopify (NYSE:SHOP) to Herbalife (NYSE:HLF); SHOP stock has tripled since then. * 10 Stocks Under $5 to Buy for Fall Closer to home, in December Quintessential Capital Management alleged self-dealing at fellow cannabis producer Aphria (NYSE:APHA). Quintessential made some good points: Aphria took a C$50 million impairment on acquired assets barely four months later. APHA stock lost half its value after the release, then promptly rose 150% before fading along with other cannabis plays.InvestorPlace - Stock Market News, Stock Advice & Trading TipsSo there are some reasons why investors might see this bear raid, too, as much ado about nothing. And in terms of the most widely-covered allegation, it may be. But the report does highlight some potential risks to HEXO stock -- risks that investors would be wise to at least keep in mind going forward. The Snapchat Risk to Hexo StockThe primary allegation from short seller The Friendly Bear is that Hexo's advertising on Snap (NYSE:SNAP) platform Snapchat could violate Health Canada regulations. The Friendly Bear compared Hexo to CannTrust Holdings (NYSE:CTST), whose stock plunged after illegal grow rooms put its production license at risk.The argument is intriguing, if a little thin. Health Canada regulations prohibit advertising of any kind to minors (those under 18, the federal minimum age for cannabis purchase in the country, though most provinces set the age at 19). Snapchat, of course, sees heavy usage among teenagers.But, as The Friendly Bear points out, the regulator also forbids advertising that associates the brand with "glamour, recreation, excitement, vitality, risk or daring." An ad captioned "A Fresh Spark" may well fit that bill. Both issues are amplified by the fact that Health Canada, in March, emphasized both the promotional nature of some online advertising and pointed to concerns about social media ads being seen by customers who were not of age.In a statement to Bloomberg, Hexo refuted the report. It noted that it doesn't run campaigns in its home province of Quebec, where regulations are more stringent. And it said its agreement with Snapchat ensures ads reach only adults.That response seems to have satisfied investors. And perhaps with good reason. The regulations are stringent, and perhaps somewhat vague. Even if Health Canada determined that the ads were in violation, one imagines Hexo would be able to pull or revise its advertising. Comparing Hexo to CannTrust, in particular, seems like a potential bridge too far. Two More Risks to the HEXO Stock PriceThat said, the report also contained two other intriguing facts that didn't seem to gain as much attention. First, the author highlighted a potential risk to Hexo's relative dominance in Quebec. The company owns about 30% share in that key market, thanks to a first mover advantage and its physical presence in the province.An agreement with the province ensures guaranteed purchases of 20,000 kilograms in year one, per a Hexo press release from last year. But it's not clear that the guaranteed extends beyond year one, with Hexo itself writing at the time that the agreement was "expected to supply" increased amounts going forward. With competition increasing, the expected growth in demand may not materialize.The second source of potential pressure comes from a recent regulatory measure. Quebec already has banned the sale of candies, in an effort to protect minors. Federal regulations on edibles appear to be much the same, ahead of the expected launch of those products near the end of this year.That's a potential issue for Hexo in Quebec and beyond. After all, Hexo itself is focused on becoming, as it terms it, "the premier branded 'ingredients for food' cannabis company." If regulations compress the edible market, Hexo, more than other cannabis plays, would suffer. Patience May Be Wise With HEXO StockNone of this is to say that investors should have sent the HEXO stock price tumbling -- or that Hexo stock is a short. I wrote last month that HEXO would be an intriguing buy at some point. The stock has returned to similar levels, but I'm still somewhat loath to rush in.The focus on edibles is wise for a smaller producer -- but that catalyst remains likely six months away. Cannabis stocks continue to struggle, with even Aphria's blowout earnings report not enough to spark a sector-wide rally.And Hexo Corp. doesn't have a lot of room for error. It remains reliant on Quebec. It will remain reliant on edibles going forward. If either of those two markets is smaller than hoped, Hexo's growth slows. And a market cap still over $1 billion (including the effect of warrants) may well come down. The HEXO stock price may be cheaper, but that's not the same as it being cheap.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Social Ads Not the Only Risk to HEXO Stock appeared first on InvestorPlace.
To be fair, it sure feels like no cannabis stock is offering refuge of any sort these days, but Canopy Growth (NYSE:CGC) really drives home that point as the shares labor more than 52% below their 52-week high. Using the strict definition of a bear market -- a decline of 20% from the most recent high -- CGC stock is in a bear market 2.5 times over.Source: Shutterstock It has often been noted that cannabis stocks require some patience on investors' part, but it has also been pointed out that Canopy stock is one of the names that tries investors' patience. For awhile, analysts and investors were willing to sacrifice cannabis companies' profitability for growth, but when Aphria (NYSE:APHA) recently turned a profit, regardless of the reason, the timetable for profitability in the cannabis space got moved up in a big way."Names who can show a route to profitability (or are there now) have the greatest likelihood attracting near-term investor interest," Jefferies analyst Ryan Tomkins said in a note.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIt's clear that investors will only prioritize growth for so long. It's becoming evident that profits, or at the very least, substantial revenue growth, are essential for cannabis companies to keep investors engaged. Tick Tock …Remembering that Canopy was the first well-known marijuana firm to ink a partnership with a big-name company, Constellation Brands (NYSE:STZ), and that it has a solid lineup of brands, such as Tweed, Spectrum Therapeutics, DNA Genetics, Doja and Maitri, makes the profitability all the more frustrating. * 8 Dividend Aristocrat Stocks to Buy Now No Matter What Some of Canopy stock's woes are self-inflected. There has been upheaval in the C-suite and little clarity on when the company will stop losing money. By some estimates, CGC will not show earnings before interest, taxes, depreciation and amortization until a year from now. And even then, investors should rightfully nitpick because EBITDA is a non-GAAP metric. The forecast for when Canopy will be truly profitable is far longer."Finally, we are aligned with Constellation Brands in the expectation that our consolidated operations will begin to deliver positive net income in the medium term that is within three to five years," Canopy CEO Mark Zekulin said on the company's recent earnings conference call.With Canopy stock trading at its lowest levels since January, the company can't have execution missteps as it had in the second quarter. As Zekulin pointed out on the conference call, Canadian customers were craving high-THC products in the quarter, but Canopy didn't have enough supply. Bottom Line on CGC StockExecution problems can be rectified, but when it comes to Canopy stock, there is some pause about the company's lack of execution in its home market of Canada, particularly as CGC has its eyes set on the lucrative U.S. market."Over the past two quarters, we have established offices in California and Colorado, and we'll soon be establishing offices in Illinois and New York," Zekulin said on the call. "We are currently involved in high-level discussions with key retailers in the United States, including being constructively involved with them as we collectively navigate the regulatory process. These investments in the U.S. CBD markets are significant."Canopy noted operational improvements in European markets including Germany, Poland, the Czech Republic and the United Kingdom.If Canopy Growth can show some operational excellence in the U.S. and those European markets, it would go a long way toward allaying investors' fears. Butt the bottom line is that revenue must increase and losses must decrease.As of this article, Todd Shriber does not hold any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Canopy Growth Stock Is Not the Place for Near-Term Cannabis Refuge appeared first on InvestorPlace.
Cannabis companies that have made acquisitions at the height of excitement about Canadian legalization last year may be facing some big goodwill writedowns.
In the last two quarters, billionaire, hedge fund manager, and mathematical genius Jim Simons has moved decisively into the cannabis sector, taking large positions in both Aurora Cannabis (ACB) and Aphria (APHA).Simons, known for his work in higher mathematics and military cryptography, founded the Renaissance Technologies hedge fund in 1982. The firm was a pioneer in quantitative trading, the application of higher mathematics to the financial markets, and has developed a reputation as one of the best returning hedge funds in the business. Simons retired from active direction of the company in 2009, but continues as non-executive chairman in an advisory role.Simons’ new positions in cannabis are considerable. Per the 13F filings, his firm purchased 788,595 shares of ACB, for $6.3 million, in Q1, and followed up in Q2 with an additional 905,305 shares at $7.1 million. Also in Q2, Simons picked up 241,500 shares of Aphria, at $1.7 million. Clearly, Simons sees something of value in the cannabis sector.Even the Skeptics See Potential in Aurora Cannabis Writing earlier this month, 4-star analyst Rommel Dionisio of Compass Point noted Aurora’s (ACB) high quarterly production and strong brand presence in the Canadian marijuana market. Aurora reported nearly 30,000 kilos of cannabis production in the last quarter, significantly more than the previous guidance of 25,000, and making Aurora one of the world’s largest medical/recreational cannabis producers.Dionisio hedges his bets on Aurora. He rates ACB as a Hold, but gives the stock a $8 price target, indicating a 33.5% upside from the current share price of $5.99. The analyst sees plenty of growth potential in Aurora’s strong production and hefty market share – all factors that brought Renaissance Technologies into this stock, as well. (To watch Dionisio's track record, click here)On the negative side of the ledger, Aurora lowered guidance of fiscal Q4 revenue, from $111 million to the range of $100 to $107 million. The reduction in revenue guidance comes even as the company is ramping up production, and Dionisio attributes it to “modest pricing pressure” as supplies increase in the Canadian market.Summing up Aurora’s situation, Dionisio says, “Aurora enjoys the second leading share of the important Canadian market, with approximately 20% market share in both the recreational and medical use markets. Moreover, through a series of acquisitions and license wins, Aurora has become one of the global front-runners in establishing an early presence in several countries in Europe and Latin America. Aurora … appears well positioned to remain one of the leading companies in the global cannabis industry, and as such warrants a premium valuation…”Overall, ACB gets a Moderate Buy rating from the analyst consensus, based on 3 buys and 4 holds given in the past three months. As mentioned, shares are selling for $5.99, so the $8.68 average price target suggests an upside of 45%. It’s important to note here that even the low-end price target, of $7, still suggests an upside of 16%, so even the true skeptics see some potential in the stock. (See ACB's price targets and analyst ratings on TipRanks)APHA Presents a Buying CaseWith a 967% increase in net sales recorded in Q2 2019, compared to the year-ago quarter, Aphria (APHA) presents on the surface with a much more clear-cut case for buying. Unlike many cannabis companies, which are still bleeding red ink as they work to pay for recent acquisitions and expansions, Aphria brought in a net profit of C$15.8 million.There is a possible shadow here. Of Aphria’s total revenue, C$128 million, C$99.2 million came from “distribution revenue” credited to its acquisition earlier this year of CC Pharma, the German medical cannabis company. Aphria’s own recreational sales increased 158% since last year, but still only totaled C$18.5 million. If Aphria should have to write down the CC Pharma acquisition costs, it may still show a profit – but that is not guaranteed.Despite the questions lingering around Aphria’s Q2 profits, analyst Justin Keywood, from GMP FirstEnergy, puts a Buy rating on APHA shares. In line with his bullish rating, Keywood gives APHA a C$14 price target – or $10.55 in US currency. His target implies an impressive upside of 70% from the stock’s current sales price on the NYSE. (To watch Keywood's track record, click here)Keywood sees the company’s combination of rapidly expanding production, high-quality product, and solid relations with government contacts (important for medical cannabis distribution in Canada’s nationalized health system) forming a solid foundation for both current operations and future growth.Keywood says, “Aphria is executing on a plan to significantly improve how it operates, while expanding rapidly. This is supported by our conversations with experts in the industry. Aphria also has $571mm in cash to support growth initiatives, while investing in derivative products, international operations and other strategic areas.”The Street largely seems to echo Keywood’s positive sentiment, considering TipRanks analytics showcase APHA as a Moderate Buy. Out of 7 analysts polled in the last 3 months, four are bullish on Aphria stock, while two remain sidelined, and one is bearish. The stock’s average price target of $10.57 represents about 70% upside potential. Like ACB, APHA’s lowest price target is significantly higher than the current share price, indicating an underlying confidence in the company, even among the naysayers. (See APHA's price targets and analyst ratings on TipRanks)