|Bid||35.09 x 900|
|Ask||35.11 x 900|
|Day's Range||33.38 - 35.83|
|52 Week Range||24.21 - 59.25|
|Beta (3Y Monthly)||3.53|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
Canopy Growth shares are getting walloped today just over a week after Canopy's Co-CEO Bruce Linton was ousted from the job. Yahoo Finance's Zack Guzman & Emily McCormick, along with Media Entrepreneur and Author Charreah Jackson discuss.
It's a news item that may have nonchalantly passed over many traditionally minded investors' radars. In a few days, Hexo (AMEX:HEXO) will trade on the grandest stage of all: the New York Stock Exchange. Therefore, even though the HEXO stock price incurred ugly volatility in recent months, that could soon change for the better.Source: Shutterstock After a tough earnings report, Hexo could use some good news. This is the positive development that embattled stakeholders have been looking for.Getting listed on the top exchange is a significant event for any publicly traded company. But what makes the promotion for HEXO different is that it also positively impacts the broader marijuana industry. That's because, from day one, all cannabis players searched for one thing: credibility.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWith the "upgrade" in Hexo, the organization joins powerhouse names like Canopy Growth (NYSE:CGC) and Aurora Cannabis (NYSE:ACB). And this in turn gives the green sector one more name within the elite circle.Now, I'm not suggesting that mere inclusion in the NYSE is the end all, be all. Over the years, we've seen the top exchange delist several names that didn't meet its standards. But that's also the draw for Hexo stock: the NYSE won't let just anyone in. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond Among many other factors, a prospective corporation must demonstrate broad demand and value of its equity. Furthermore, they must submit financial documents proving their viability. Given every opportunity to find something wrong, the NYSE gave HEXO stock a pass.That's got to be worth something! Good News Is Gold for HEXO StockDespite the above points, I may still have some doubters regarding the NYSE move's importance. At the end of the day, critics might argue, it's just a change of scenery for Hexo.Nevertheless, it's still a positive development for the budding company, and good news in this sector is worth its weight in gold. Unlike most other investment markets, cannabis-based securities primarily are not driven by the fundamentals. Instead, they're narrative-driven, which can be good and bad.On the negative end of the spectrum, you just need to look at the recent earnings season for marijuana firms. Company after company tumbled over the past several weeks, and for what? Failing to meet consensus expectations for earnings per share and revenue growth?As I explained regarding Aurora Cannabis' bout with volatility, Wall Street is not playing fair with marijuana businesses. Analysts know that due to a murky legal environment in the U.S., cannabis operators have limited options. Thus, the poor earnings results don't accurately reflect demand. Rather, they reflect unnecessary market inefficiencies due to myopic laws.Yet HEXO falls because most investors are trained to look at the numbers. Admittedly, they don't look good.But the numbers don't matter now as much as the narrative. Because for botanical advocates, the main goal was never about Canadian legalization. Instead, the grand prize is full legalization in the U.S.And stories like HEXO being listed in the NYSE add more leverage and credibility to this prospect. With enough positive headlines, the narrative can quickly shift from cannabis firms not making their numbers to potentially advantaging an unprecedented opportunity.That's why I'd advise against panicking: we're just getting into the good stuff for Hexo Corp stock. Ample Evidence Points to Full LegalizationSeveral years from now, I'm almost certain that we'll look back on names like Hexo stock with regret. Not because their shares did poorly but because they catapulted to unbelievable heights.Think I'm high on something? Consider that right now, cannabis is the fastest-growing job market in the U.S. Remarkably, this is true despite the fact that many states still haven't legalized marijuana to any degree.Moreover, several European countries are shifting favorably to weed. Late-last year, South Korea legalized medical marijuana. The concept was so groundbreaking - because the country is socially very conservative -- that it caught observers by surprise.I could go on and on. But the point is that the world is gravitating toward marijuana legalization. Eventually, the rest of the markets will catch up to this fact. And this is the ultimate narrative that can push Hexo Corp stock to crazy levels.Josh Enomoto is considering buying Hexo stock in the next 72 hours. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy for Less Than Book * 7 Marijuana Stocks With Critical Levels to Watch * The 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The post The NYSE Listing Means Legitimacy and Bigger Things for Hexo Stock appeared first on InvestorPlace.
Cannabis stocks need to fight their way out of their funk. That's true for names like Canopy Growth (NYSE:CGC) and New Age Beverages (NASDAQ:NBEV), but it's critical for Cronos Group (NASDAQ:CRON). CRON stock is not only down by a third since its March high, but is on the verge of breaking under a crucial technical support level.Source: Shutterstock Some -- perhaps most -- would argue that the shape of a chart is irrelevant. A chart's history shouldn't dictate its future. Rather, a company's results and prospects are reflected in its stock's movement.The fact is, however, the movement of a marijuana stock shapes the rhetoric about that company as much as it's shaped by the rhetoric. If Cronos stock slips any further, it would become alarmingly easy for the masses to view it as a liability.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Charting CRON StockIt's not difficult to see.After an overheated rally in January and February set the stage for significant profit-taking in March and April, the 200-day moving average line (plotted on the white line on the chart below) began to serve as a technical floor. It's not yet become a pushoff point, though, and it doesn't appear it's going to. Just within the past several days the sellers have tested the pivotal 200-day moving average line as support again, and it's failing to even modestly repel the effort.The 200-day moving average line is regarded by some as the most important of all the trend indicators. It's admittedly simplistic, but still has significant psychological implications because so many traders still see it as a make-or-break level. * 7 Retail Stocks to Buy for the Second Half of 2019 There's modest encouragement in the fact that the weakness since March's high has been on relatively low volume. That suggests there's not necessarily a great deal of conviction behind the selling; investors are just biding their time.Conversely, the fact that the other aforementioned names, like most marijuana stocks of late, are falling is a red flag. Group-wide movement tends to indicate longer-lived, philosophical doubt. Analysts Still in DoubtStill, Cronos Group stock is a standout for all the wrong reasons. Chief among them is the fact that among all cannabis stocks, CRON stock remains one of the analyst community's least favorite.As of the most recent look, analysts collectively rate Cronos at a little less than a Hold … tiptoeing into Sell territory. Rivals New Age Beverages and Canopy Growth, for perspective, are considered a Buy and something that's almost a full Buy, respectively. Hexo (NYSEAMERICAN:HEXO) is also closer to a Buy than a Hold. Click to EnlargeReasons for the pessimism range from lack of clear capital spending plans to a sheer lack of story in an environment where a company's story is a powerful marketing tool. Given that the $1.8 billion investment Altria Group (NYSE:MO) made in CRON stock has now been closed for weeks as well, one would have expected a more definitive direction for a partnership than we've seen yet.More than anything though, analysts still take issue with the stock's crazy valuation.Cronos sports a $4.8 billion market cap, and though revenue of $6.5 million was only a fraction of what the company could be driving in just a few quarters, even the most optimistic of plausible output levels will fall short of justifying that sort of price. It's a reality made even more amazing considering analysts have cared little about other similarly frothy valuations among cannabis stocks. Wait and See on CRON StockIt's certainly possible CRON stock could dig its way out of trouble and use its 200-day moving average line as a launchpad rather than a trigger for more trouble. The stock's yet to break below it. * 10 Stocks to Sell for an Economic Slowdown Those hopes are fading fast though, as the broader realities of the legal marijuana business sink in. The most overvalued names in the business also make for the most susceptible targets. That's Cronos, to be sure.Whatever's in the cards, it's certainly not a time to step into the pot name. Newcomers will want to wait for a little more clarity before doing anything.The world will get a big dose of that clarity in the first half of August, when Cronos will be reporting its Q2 numbers.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about him at his website jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy for Less Than Book * 7 Marijuana Stocks With Critical Levels to Watch * The 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The post Cronos Needs to Show the Market Something to Pull Stock Out of Funk appeared first on InvestorPlace.
The stock market is slowly but surely pushing higher. It seems as though the bulls are reluctant to run too far, too fast. At the same time, the bears simply can't garner any staying power when it comes to pushing this market lower. At least not while rate cuts are on the way. Let's look at a few top stock trades for next week. Top Stock Trades for Monday 1: Johnson & Johnson Click to EnlargeShares of Johnson & Johnson (NYSE:JNJ) were smacked lower on Friday, falling over 4%. The stock is approaching the same level we flagged earlier in the year, near $130.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThis level is currently acting as support, but has played a key role over the past 12 months. If JNJ stock falls down to this level, it may be worth investors nibbling at on the long side. Keep in mind, J&J reports earnings next week. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond If it hold this mark on an earnings decline, that's even better. Top Stock Trades for Monday 2: Square Click to EnlargeWe had Square (NYSE:SQ) on watch for a break higher, and that's exactly what we've gotten this week. The stock is up big over the past four trading sessions, rallying over 10%.For the short-term traders in this name, it would be prudent to book some of these gains with SQ stock heading straight into prior resistance.From here, let's see how SQ stock behaves. Does it pullback and consolidate a bit? Do shares push through resistance, which turns to support?I would love to see SQ stock coil under this level for a few days while holding up above $80. A breakout could Square flying higher, but the more rest it has before the breakout, the more powerful the move can be. On a decline, see that $78 holds as support. If it doesn't, $75 is on the table. Top Stock Trades for Monday 3: Illumina Click to EnlargeIt was a tough day to be a shareholder in Illumina (NASDAQ:ILMN). The stock plunged more than 15% after management warned about a big shortcoming in earnings.The action on Thursday spoke clearly. However, investors used the pullback to the 21-day moving average as an opportunity to get long rather than an opportunity to exit the name once steep channel support gave way.Given how big of a run ILMN has been on, you can't blame dip-buyers too much on this one. One day later and the stock is down huge. Its inability to stay above the 200-day moving average near $317 or the 61.8% retracement near $311 doesn't bode well for bulls. Under prior downtrend resistance (purple line) just adds salt to the wound.The longer shares stay below $311, the worse off bulls are. Let's give this one a few days to see where it settles down at. If it reclaims the $311 mark quickly, then we at least have a point of reference to use on the downside. Top Stock Trades for Monday 4: Aurora Cannabis Click to EnlargeYesterday we wrote about the bearish setup in Canopy Growth (NYSE:CGC) with its descending triangle formation. On Friday the stock plunged more than 7% and Aurora Cannabis (NYSE:ACB) isn't doing much better, down more than 5%.ACB is setting up the same descending triangle formation that CGC is and it's playing out exactly the same. Below the $7 to $7.25 area is very troubling for ACB. A rally back to this area and a failure to reclaim it sets it up for more downside. * 7 Stocks to Buy for Monster Growth in the Second Half of 2019 Be careful with this one. I wouldn't touch this one on the long side with a chart like this.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy for Less Than Book * 7 Marijuana Stocks With Critical Levels to Watch * The 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The post 4 Top Stock Trades for Monday:JNJ, SQ, ILMN, ACB appeared first on InvestorPlace.
Canadian cannabis companies have leapt onto U.S. stock markets, dazzling investors. Here's a rundown of industry facts and how to invest in marijuana stocks.
Marijuana stocks are hot in today's market, but pot stocks are not the only way for you to profit from the habits of other people. Alcohol has been legal in America for 85 years, and the industry's consolidation has delivered some solid investment opportunities. These are companies with solid growth prospect that you can invest in with confidence.You can also quench your thirst in a few ways. You can go with diversity in Constellation Brands (NYSE:STZ), you can go for global growth with Anheuser Busch InBev (NYSE:BUD), or you can go for U.S. growth with The Boston Beer Co. (NYSE:SAM). * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond Each one has a compelling back story worth knowing:InvestorPlace - Stock Market News, Stock Advice & Trading Tips Constellation Brands (STZ)Source: Shutterstock If you're into the marijuana business, the best liquor play has you covered. That would be Constellation Brands, with a five-year gain more than double that of the Nasdaq average, and a rising dividend as well.Constellation is based in upstate New York as a wine company but is better known today for its beer and spirits. It owns Modelo as well as the U.S. rights to Corona beer and has a full range of liquor brands including Svedka Vodka, Casa Noble Tequila and Black Velvet Canadian whiskey.Constellation is a heavy advertiser and is strongest in the U.S. market, where it has 11% of the in-store wine market and over one-third of its sales. The company brings more than one-third of revenue to the net income line, which meant $3.4 billion of net income on $8 billion of revenue during the quarter ending in February. Sales were up 25% between 2015-2018 and 13 of 19 analysts following the stock rate it a buy.If you still want a pot stock, however, Constellation is a pot stock. It has agreed to buy 35% of Canopy Growth (NYSE:CGC), the Canadian marijuana grower with 30% of that country's market share as it prepares for legal recreational sales. Anheuser Busch InBev (BUD)Source: Paul Sableman via FlickrThe owner of the Budweiser brand is also your best bet for getting in on the global growth story in beer. Anheuser Busch InBev grew through acquisitions from a small Brazilian brand called Brahma, under the leadership of 3G Capital, the global investment firm that also put together Restaurant Brands International (NYSE:QSR) and Kraft-Heinz (NYSE:KHC). The company, known as InBev, bought Budweiser in 2008 and took its name.BUD stock has surged 36% in 2019, but it's still down 14% in the last 12 months. The dividend of $1.12 gives it a yield of 1.7%. Management sets the dividend each quarter, and it varies based on results, but the company is devoted to the return.In its continuing battle with craft brews, Budweiser has been innovating by crafting a brand called Reserve Copper Lager with the Jim Beam distillery and signing deals with baseball and basketball unions to put their athletes into its ads -- the first time in years active athletes have been represented. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The company's financials emphasize its global footprint and around 20% of its sales are in North America. During 2017, it had net income from continuing operations of $5.7 billion on revenue of $54.6 billion. Boston Beer (SAM)Source: Phil Dubois via Flickr (Modified)The Boston Beer Co. is the hottest stock in the beverage industry right now, up 59% so far in 2019. But SAM stock's jump has not been because of beer.Boston Beer helped jump-start the craft beer movement with its Sam Adams line, which it began brewing in 1984. While the beer is named for the Revolutionary War leader, co-founder, chairman and spokesman Jim Koch is not related to him and much of the beer is brewed outside Bethlehem, Pennsylvania, in Breinigsville.The recent run-up in the stock is thanks to a hard cider, called Angry Orchard, which was launched in 2012 and now represents 20% of the company's volume. In keeping with the founder's German-American roots, the company is also building beer gardens, large facilities in central cities that can also draw tourists.Boston Beer needed the kick of cider because its beer brands remain under pressure from big brewers like Bud, on the one hand, and tiny craft brewers on the other, which consider Boston Beer a big brewer. There are only 8.24 million shares outstanding, so its $9.3 million in net income for the first quarter came to 80 cents per share.The company's relatively small size, a market cap of just $4.66 billion, means only ten analysts currently cover the stock, and all have it listed as a hold or sell. The shares are also very volatile. Its low for the last year was $231 per share, and its high was $393.Dana Blankenhorn is a financial and technology journalist. He is the author of a new mystery thriller, The Reluctant Detective Finds Her Family, available now at the Amazon Kindle store. Write him at firstname.lastname@example.org or follow him on Twitter at @danablankenhorn. As of this writing, he owned shares in QSR. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy for Less Than Book * 7 Marijuana Stocks With Critical Levels to Watch * The 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The post 3 Legal Highs for Your Portfolio appeared first on InvestorPlace.
Valued at $12.6 billion in market capitalization, Smiths Falls, Ontario-based Canopy Growth (CGC) is by far the largest Canada-based, U.S.-listed legal marijuana company. As such, it garners a lot of the attention Wall Street gives to the cannabis industry.As such, it's no great surprise that when Canopy appointed a new chief financial officer in June, the marijuana industry specialists at Jefferies wanted to meet with him. This week they got their chance.In a note published Thursday, Jefferies analyst Owen Bennett recapped his findings from a morning meeting with Mr. Mike Lee of Canopy Growth. Three topics in particular stood out.Closing the GAAPFirstly, as close followers of Canopy stock will be aware, despite being listed on the New York Stock Exchange, this company does not currently file 10-Q, 10-K, and similar "GAAP" (generally accepted accounting principles) reports with the SEC. Instead, the company reports its financials via "6-K" filings, a form commonly used by foreign issuers of securities also listed in the U.S.That could change, however, as Canopy hones its focus on the U.S. market. As Lee apparently told Bennett, Canopy's business is "getting much more complex" as the company grows, and Lee is feeling a need to tighten up the company's reporting, closing Canopy's budgets every month for example, rather than just once every three months. The company also intends to begin "moving to US GAAP" as its accounting standard, saying its financials will look "cleaner" that way.Planting seeds in the USSpeaking of the U.S., Canopy revealed that it has already begun planting its first crop of hemp in the U.S. -- "going into the ground now." 65 Canopy employees are employed in the U.S. business already, and the company is "moving as quick as possible" to grow this business.ForecastsAs for how fast Canopy intends to grow, Lee suggested that fiscal Q1 2020 sales, due out perhaps two months from now, will show no "significant" change from the fiscal Q4 2019 sales of $94.1 million that were reported three weeks ago. The 16% gross margin that Canopy posted in Q4, too, will probably not change much in Q1 -- which could cause significant disappointment. One year ago, Canopy was grossing as much as 34% from its product! (Still, Canopy is sticking with its prediction that gross margins will improve as the year progresses, perhaps touching 40% in fiscal Q4 2020).On the other hand -- and this is perhaps the single most important revelation from Jefferies' meeting with Canopy's new CFO -- Canopy is no longer promising to hit an annual rate of CAD$1 billion in marijuana sales this year. As Bennett noted, "the company did appear to try to distance themselves from the CAD 1bn sales run rate by Q4 this year they have previously communicated."Again, this probably isn't going to win Canopy any fans in the investor community. Bennett, for his part, is maintaining his "hold" rating on Canopy stock, and his price target of CAD$77 per share (USD $59 and change). (Original source)To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here.Read more on CGC: * Canopy Growth: What CEO’s Exit Means for the Stock * Canopy Growth May Never Reap the Benefits of Acreage Holdings * Canopy Growth (CGC) Stock: Buy the Dip or Pump the Brakes? * Canopy: Recent Licence from Health Canada Ain’t Going to Help the Stock More recent articles from Smarter Analyst: * Can You Still Trust CannTrust (CTST) Stock? This Analyst Is No Longer Certain That You Can * Tesla (TSLA): Range Anxiety Is All Perception, but Still a Major Hurdle * Cannabis Stock HEXO to Benefit from Sector Chaos * Aurora Cannabis (ACB): Great Prospects... That Are Fully Priced Into the Stock Already
Aurora Cannabis (NYSE:ACB) bulls are looking tired. ACB stock has now hit $10 on three occasions: January 2018, last fall, and most recently this March. Each time ACB stock has fallen sharply from that resistance level. If Aurora stock can't get back above $10 soon, the stock could be in deep trouble.The fundamental picture for ACB stock hardly looks better. Canadian marijuana companies continue to run big losses. We see management controversies developing. A scandal at a rival pot company has people worried.And the core problem in the Canadian market -- excess supply -- continues to mount. Even the Ontario market coming online has done little to fix this disturbing trend. Aurora in particular looks to have too much supply given the weak demand trends.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond This plays into another mounting concern; companies like Aurora will have to take write-downs if their businesses don't start generating profits soon. All in all, ACB stock's recent 21% slide is well-founded and more room to go. CannTrust: A Big Warning for the SectorEarlier this week, shares of Canadian marijuana rival CannTrust (NYSE:CTST) plummeted. Investors dumped CannTrust stock on news that regulators had seized a large quantity of its pot inventory. Why would they do that? The government claims that CannTrust was growing marijuana in unlicensed facilities.CTST stock has gone into free fall. It dropped more than 20% immediately following the news, and has now lost 40% of its value in the past week alone. It's down 70% from where it traded in March, and has hit fresh two-year lows. It's a stunning reminder to the rest of the industry that even in generally tolerant countries, like Canada, regulators are still a big concern if companies get sloppy with their paperwork.Why is this so important to ACB stock in particular? Because Aurora is aiming to be the global leader in medicinal cannabis. As Aurora's latest corporate presentation notes, it is active on five continents and in 25 different countries. Aurora claims to be the industry leader in both the EU and Latin America.With such far-flung operations, what are the odds that Aurora will run into regulatory trouble with at least one of its operations? I'm not suggesting Aurora is doing anything incorrectly. But in the course of making so many acquisitions and entering so many markets, it can be hard to keep everything 100% up-to-date as far as licensing and paperwork go. The market, with CannTrust at least, has said that it will take a stock to the cleaners if they run into any government headaches. It's a big risk to monitor for ACB stock going forward with its unusually extensive global footprint. Industry Bracing for Write-DownsA Bloomberg article this week noted that the marijuana industry is facing rough times ahead. Of the big players, analysts expect only Cronos (NASDAQ:CRON) to make positive net income this year. That's not a favorable result, given that 2019 was supposed to be the big year. Marijuana companies were going to move from story and hype to becoming solid businesses with legalization in place and many other market opportunities opening up.But the stream of red ink hasn't let up. On top of that, producers have overwhelmed the Canadian market with way too much inventory. As a result, Bloomberg reported that:"Instead of profit, writedowns related to unfinished inventory may be in the offing for some Canadian companies. That has some investors voting with their feet, moving out of Canada and into the U.S., where the marijuana companies are generally performing better despite a patchwork of state-by-state regulations."Investors have been increasingly moving their funds into the American marijuana plays given the state of the Canadian industry. And we saw a big sign of industry unease when Canopy's (NYSE:CGC) former CEO was forced out of his position when, seemingly, major backer Constellation (NYSE:STZ) had a disagreement over business strategy going forward.As Canopy and others have failed to turn acquisitions into profits, this raises the possibility of asset write-downs. Companies like Aurora, Canopy, and Aphria (NYSE:APHA) have bought many other smaller pot firms. Bloomberg Intelligence analyst Kenneth Shea says these companies will have to take charges against earnings in coming quarters if those assets don't start producing profits. ACB Stock VerdictYes, the price of Aurora stock has gone down a lot recently. But that doesn't necessarily mean it is cheap yet. Just look at CannTrust's non-stop plunge from $10 to $3 since March. What looks cheap often gets a lot cheaper.Let's face it: The Canadian marijuana industry is suffering from a big shakeout at the moment. People dreamed of easy profits following legalization. But it isn't working out that way. Aurora has a unique pitch for investors with its focus on medicinal and international markets, but that brings its own share of risks. With sentiment turning downward -- with good reason -- ACB stock could have a good deal farther to fall.At the time of this writing, Ian Bezek held no positions in any of the aforementioned securities. You can reach him on Twitter at @irbezek. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy for Less Than Book * 7 Marijuana Stocks With Critical Levels to Watch * The 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The post Aurora Cannabis: Here's Why ACB Stock Continues to Sink appeared first on InvestorPlace.
A full year after its widely publicized initial public offering, Tilray (NASDAQ:TLRY) shares experienced breathtaking highs and gut-wrenching lows. This dynamic attracted a fair share of skeptics and detractors. Even in an already volatile cannabis sector, Tilray stock is a big mover in both directions. Therefore, TLRY isn't for the faint of heart.Source: Shutterstock If you're seeking relative safety in the cannabis stock niche, you're probably better off sticking with a cannabis old-timer: Speaking relatively, I'm referring to names such as Canopy Growth (NYSE:CGC) or Aurora Cannabis (NYSE:ACB).But if you're ready to take a walk on the wild side, though, then buckle up for some cannabis controversy. Compared to other weed plays, Tilray stock is a veritable roller-coaster ride.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Not Your Grandfather's StockMillennials and younger traders are drawn to volatile stocks like TLRY; thus, don't expect to see this in a lot of retirement accounts. With a jaw-dropping 52-week range of $20.10 to $300.00, it's fair to say that Tilray stock experienced some growing pains before real price discovery finally took hold. * 10 Stocks to Sell for an Economic Slowdown Plus, with no price-earnings ratio listed because the earnings are negative, this is a "proceed with caution" play. Still, the price action for TLRY seemed to have calmed down this summer. After generating considerable noise as the NASDAQ's first listed pot stock, investors might identify a trading range for this wildcard. No Lock-up Worries for TLRYMuch of the bearish sentiment surrounding TLRY involved the company's largest shareholder, a private-equity firm known as Privateer Holdings. You may recall the hubbub over the ominous-sounding Tilray news that its insider shareholder lock-up period was ending earlier this year (Jan. 15, to be exact). That means that Privateer would now be allowed to sell all of its TLRY shares.This most likely caused some investors to panic and sell their holdings of Tilray stock before Privateer could sell theirs. But as it turned out, their fears were unwarranted: Privateer announced that it wouldn't sell any of its TLRY shares immediately after the lock-up period expiration.That was quite a relief, as Privateer owned approximately 76% of Tilray's outstanding shares. Not only that, they've agreed to extend their lock-up provision on those TLRY shares for two years. Street CredFor Tilray, gaining credibility on Wall Street wasn't easy. But they managed to align themselves with a bona fide giant when they partnered with beer-maker Anheuser Busch Inbev (NYSE:BUD). The purpose of their joint endeavor is to research nonalcoholic beverages containing THC and CBD.Personally, I feel that this partnership will prove transformative for the cannabis industry; investors and the media practically ignored this landmark arrangement, which is unfortunate. This deal will position Tilray in a unique position to capitalize on the potentially massive Canadian market for cannabis-infused beverages.Another boost to Tilray's credibility is the recent announcement that they're importing medical cannabis oral solutions in large quantities to the U.K. Sascha Mielcarek, the managing director of Tilray Europe, noted that Tilray already has six medical cannabis products approved for medical use in the U.K. Mielcarek also expressed optimism as the company continues to make inroads into the burgeoning European cannabis market, stating:Regulations are progressing as more and more countries across Europe are recognizing the benefits of medical cannabis and its potential to improve patients' quality of life. We're pleased to reaffirm our commitment to delivering medical cannabis to patients in the U.K. and look forward to offering a variety of GMP-certified, pharmaceutical-grade products in the coming months.Skeptics should also be aware that Tilray already ships to 12 countries with legalized cannabis. Among them is Germany, which has a population more than twice the size of Canada's. The Bottom Line on Tilray StockPlease don't misunderstand -- I'm not saying that retirees should load up their investment accounts with shares of TLRY stock. It's something of an acquired taste.However, cannabis-infused beverages and the rising cannabis market in Europe present huge opportunities. Therefore, I'm not at all against the idea of buying Tilray stock on the dip. It could turn into a joyride as the company strives for stability in this decidedly unstable industry.As of this writing, David Moadel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell for an Economic Slowdown * 7 Marijuana Penny Stocks That I May Buy * 7 of The Best Schwab ETFs for Low Fees The post 'High' Caliber: Can Tilray Stock Close the Credibility Gap? appeared first on InvestorPlace.
Chief Financial Officer Mike Lee told Jefferies analyst Ryan Tomkins that earnings before interest, taxes, depreciation and amortization could be negative for the next 2 fiscal years.
In his second day of testimony, Fed Chair Jay Powell essentially confirmed that a rate cut is coming this month. For the market's part, the Fed Funds futures are pricing in at least a 25 basis point cut this month. To be fair, the market was already pricing in such a cut before Powell's comments, but even so, the market was again unable to hold onto a bulk of its opening gains. Let's look at a few top stock trades for Friday. Top Stock Trades for Tomorrow 1: Canopy Growth Click to EnlargeShares of Canopy Growth (NYSE:CGC) are taking a tumble on Thursday, down almost 5% so far on the day. However, the breakdown could be more than just a shakeout.InvestorPlace - Stock Market News, Stock Advice & Trading TipsCGC stock is cracking through a floor of support, showing that the descending triangle -- a bearish setup -- is in full force. If Canopy Growth can reclaim the $38-ish area and rally over $40, CGC could repair some of the technical damage. * 10 Stocks to Sell for an Economic Slowdown Below $38 and the setup remains bearish. Top Stock Trades for Tomorrow 2: Micron Click to EnlargeA few months ago we highlighted a potential breakout in Micron (NASDAQ:MU) with an ascending triangle -- the opposite setup of CGC. However, when uptrend support (blue line) gave way, the setup failed.Now, MU stock is back up into prior resistance near $44. Given the big run we've seen, I am going to assume $44 is resistance unless Micron stock can push through. On a retreat, let's see if $41 holds as support. If not, a retest of $39 could be on the table. Top Stock Trades for Tomorrow 3: Bed Bath & Beyond Click to EnlargeMan, Bed Bath & Beyond (NYSE:BBBY) has been a total disaster over the past few years. Shares have cratered 80% over the last five years, with Thursday's 3% fall not doing much to help.On the plus side though, BBBY stock has rallied strong off the lows at $10.43.At this point, we need to see the lows from December hold, at $10.21. Below and more selling can take place. On a rally, let's see if BBBY can reclaim the $12.50 level and the 10-week moving average. Top Stock Trades for Tomorrow 4: Cigna Click to EnlargeShares of Cigna (NYSE:CI) are ripping higher by more than 8% on Thursday. That's great news for bulls, although a stronger close would have been nice.CI stock ripped over the 200-week moving average, but was rejected by the 50-week moving average at $183.56. Furthermore, the 200-day moving average stood strong as resistance at $182.40.Further, the key $180 level couldn't be reclaimed either.So what now? * 3 Forgotten Tech Stocks Worth Remembering I want to see the $165 level and 200-week moving average act as support. If CI can maintain some of its newfound bullish momentum, I want to see how it handles the $180 level on the upside, as well as the 50-week moving average and 200-day moving average. Above could pave the way to $200. Otherwise, it could act as resistance.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell for an Economic Slowdown * 7 Marijuana Penny Stocks That I May Buy * 7 of The Best Schwab ETFs for Low Fees The post 4 Top Stock Trades for Friday: CGC, MU, BBBY appeared first on InvestorPlace.
[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.]Technical analysis is very misunderstood. This does not surprise me because most of the technical analysts that I see just don't get it. They mindlessly look at charts and try to identify patterns without understanding what they are supposed to mean. Even worse, some analysts promote dubious methods like harmonic charts and Elliot waves (these techniques are like Sasquatch and UFOs. They may be fun to talk about but they are not real. Institutional traders do not use them).In financial markets, prices are always doing one of three things. They are either going up, going down or staying the same.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn addition, in financial markets certain price levels are more important than others with regards to the amount of supply and demand that exists at them. If understood and utilized correctly, technical analysis should be an illustration of these supply-and-demand dynamics.Having a knowledge of these dynamics can help you make money. Short-term traders need to know which levels are important in order to be successful. Long-term holders can benefit by having a better understanding of where to place their buy and sell orders.For example, say you buy a stock at $10 and plan on selling it when it gets to $20. You should look at the chart, because if there is significant resistance at $19, the stock may not get to $20. It may rally and hit the resistance at $19, and then reverse its trend and go back to $10. If you had a limit order at $20, it would not have been filled and you would have missed making a significant profit. * 10 Stocks to Sell for an Economic Slowdown Let's take a look at seven of the most popular marijuana stocks and some of the technical levels in each. A lesson can be learned from each of them. Marijuana Stocks: Cronos (CRON)Cronos (NASDAQ:CRON) grows and sells marijuana. It has been consolidating over the past month.You don't need to be a Market Guru to see that the $14 level is important. It was support in May and June. This is because in September and December it was resistance. How does this happen? How does resistance become support? Consider the following.Those who sold it at $14 were feeling pretty good after it went lower. The short-sellers are making money and the regular sellers are happy because they made the correct decision when they decided to sell.Then in January the stock rallied and went through $14 to higher levels. Now the short-sellers are losing money and they tell themselves that they will buy it if it gets back to $14 so they can break even. The regular sellers tell themselves that they made a mistake selling it. If it comes back to $14, they will buy it back. Those who bought it at $14 wish they bought more and tell themselves they will if it gets back to $14.Add to that professional traders who wish to profit off of a clear level, and we now have four groups of interested buyers at $14. This is how support forms. Canopy Growth (CGC)Canopy Growth (NYSE:CGC) grows and sells marijuana.You can see that the $40 level is important for CGC. It was support in April and early June. It is testing that level again now, and it appears to be breaking. If it does break, the stock could drop to $30 pretty quickly. This is because in January it gapped up from $30 to $40. Gaps tend to refill.When a stock gaps, up it doesn't spend much time trading at the levels that it gapped through. Because of this, meaningful support would not develop at these levels. * 7 Retail Stocks to Buy for the Second Half of 2019 As we have seen, support forms because those who sold at a particular level want to buy it back after it goes higher while those who bought it wish they bought more.So ultimately, if CGC stock falls, it could fall a ways. Aphria (APHA)Aphria (NYSE:APHA) grows and sells marijuana.APHA has been trending lower over the past two weeks. Longer-term, there is support around the $6.25 level and resistance around the $7.30 level.Few think about it, but a clearly defined support or resistance level is an amazing thing. How is it that at different points in time, a stock can have the exact same valuation? Interest rates are different, the economy is different, and different news has come out.No academic or efficient market believer could ever explain why certain levels are more important than others. According to them, clear levels shouldn't exist. But as we can see here, they most certainly do.If APHA continues to trade lower, it will probably find support again around $6.25. If you like the company, that would be a logical place to buy it. If it rallies, I would look for resistance around the $7.30 level again. Tilray (TLRY)Tilray (NASDAQ:TLRY) grows and sells marijuana. And TLRY stock illustrates the concept of trends and trendlines quite nicely. These are not as mysterious as some seem to think. Drawing trendlines is an art and not a science, but with some experience and practice, it can help your investments.When prices are moving up in a market, the forces of demand are in control. When prices are falling, the forces of supply are in control. When markets are consolidating or trading sideways, the forces of supply and demand are equal.The break of a trendline could be a signal that the leadership of the market is about to change or equalize. * 10 Best Stocks for 2019: A Volatile First Half As we can see here, the forces of supply drove TLRY lower from February through June. Since then, the forces of supply and demand have equalized. The break of the downtrend line in June was an early indication that this was going to happen. CannTrust Holdings (CTST)CannTrust Holdings (NYSE:CTST) grows and sells medical marijuana.A valuable lesson about buying a stock can be learned here. $4.80 has been clear support, and each time that CTST traded down to that level over the past year a significant rally followed.As the stock once again approached this level, some traders would want to buy it hoping that it would rally again. Most would just buy it around $4.80. But there is a better strategy, and this is illustrated here. Instead of buying it at $4.80, wait until the downtrend line is broken before entering the position.In other words, buy it on the way up. You won't get the exact low price but the risk-reward ratio is better than just guessing that the selloff is over.In this case, this strategy would have saved investors a lot of money. After cutting through $4.80, the company got dinged with a non-compliance report from Health Canada that sent shares plummeting toward $3. Anyone who bought around $4.80 likely isn't too happy with that decision right about now. Cure Pharmaceutical Holding (CURR)Cure Pharmaceutical (OTCMKTS:CURR) develops and manufactures drugs and drug delivery systems. The $4.50 level is important here. It was resistance in August and September and then again in March.Over the past few weeks, CURR stock rallied through this level, but it became overextended and overbought. As expected, it reversed and found support at the $4.50 level.This is another example of how resistance becomes support. Those who sold it say they will buy it back if it gets down to their level. Those who bought it want to buy more. * 7 A-Rated Stocks to Buy for the Rest of 2019 If you like the long-term prospects of this company, this would probably be a good time to buy it. Innovative Industrial Properties (IIPR)Innovative Industrial Properties (NYSE:IIPR) acquires industrial properties and rents space to marijuana growers. This company is a great example of an ancillary business to the cannabis industry. It has also performed exceptionally well.We can see here what technicians call a "pennant" or "flag" pattern. This type of pattern is typically a continuation pattern.In other words, it shows that the buyers that drove up the price have decided to take a break and see if the stock will come down a little allowing them to buy it at better prices. Once these buyers reenter the market, they will drive it higher again.For example, a money manager may really want to own a stock. They buy it aggressively on Monday and Tuesday and drive up the price. Then on Wednesday, they take a break and the stock price doesn't move. On Thursday and Friday they decide to finish their buying and they take the price up again. This type of activity would look like a flag on a chart.At the time of this writing, Mark Putrino did not hold any positions in the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell for an Economic Slowdown * 7 Marijuana Penny Stocks That I May Buy * 7 of The Best Schwab ETFs for Low Fees The post 7 Marijuana Stocks With Critical Levels to Watch appeared first on InvestorPlace.
Marijuana legalization efforts are moving forward following a reform hearing on Wednesday concerning the drug. During Wednesday's hearing, Rep. Tom McClintock expressed an optimism that legalization efforts could extend across the aisle: "It ought to be crystal clear to everyone that our laws have not accomplished their goals," McClintock said.Source: Shutterstock Currently, a number of marijuana bills are on the table, including the STATES Act (PDF), put forth by Senator Elizabeth Warren and Senator Cory Gardner, which seeks to provide individual states with the right to decide how marijuana is regulated without fear of facing repercussions from federal agencies. The goal of this bill is to act as an amendment to the Controlled Substances Act.The Marijuana Justice Act, sponsored by Senator Cory Booker, is another candidate for marijuiana reform. It seeks to legalize the drug and also clear the records of anyone having served time for possession or use of marijuana.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIf this historic reform pans out, the impact of marijuana legalization will be felt across all marijuana stocks, including Canopy Growth (NYSE:CGC) and Aurora Cannabis (NYSE:ACB) which are both down 25% from their 2019 highs. Even with bipartisan support, however, reaching a consensus on the best path forward still appears problematic.Many lawmakers clashed over the idea of what broad-scale marijuana reform should be and how all of its nuances should be handled. One major point of contention is just how should marijuana reform in the U.S. deal with the repairment of communities crippled by year-after-year of President Nixon's costly war on drugs.The following are some key highlights from the historic hearing: * With Democrats controlling the House of Representatives, efforts to legalize or reduce restrictions on marijuana will likely pass in the House. * A Republican-controlled Senate could put a stop to any new laws that seek to cut down the red tape around the drug. * Across-the-aisle support is a possibility, however, and lawmakers believe marijuana legalization in 2019 could be on the table with bipartisan effort. * Majority Leader Mitch McConnell is a major roadblock to national marijuana reform. * Chairwoman Karen Bass accused the war on drugs of being "racially biased from its inception." * Tom McClintock pushed back on Bass' claims, accusing Democrats of "decid[ing] to play the race card in this hearing." * Malik Burnett, a physician at John Hopkins Bloomberg School of Public Health, testified that marijuana policy has been "a tale of two Americas" where the privileged are starting cannabis companies and the marginalized have had their lives ruined by marijuana-related convictions. * Baltimore State Attorney Marilyn Mosby weighed in, saying "there is little public safety value related to the current enforcement of marijuana laws." * Rep. Matt Gaetz, a co-sponsor of the STATES Act, believes his colleagues should support the bill despite it not going far enough with regard to social issues. * Physician David Nathan argued that consenting adults should have never been barred from using marijuana in the first place, comparing it to more harmful substances like alcohol and tobacco.The biggest takeaway from the hearing on national marijuana reform is that both sides of the aisle can agree we need to change how we treat marijuana in the U.S. While this doesn't guarantee marijuana legalization in 2019, it is definitely a bright spot for activists and investors in pot stocks.Rep. Ted Lieu summed it up best with an aside on how much progress we've actually made in America over the past 15 years: "If 15 years ago I were to tell you, in 15 years we would have gay marriage in 50 states and, in some of those states, we'd be smoking weed, you'd think I was crazy--but that is in fact what is happening now."P.S. This pot stock could soar starting Tuesday, Aug. 13 …The opportunity in legal weed is much like the opportunity internet stocks offered in 1994 … or that Bitcoin offered in 2015. It's set to grow so much over the next 10 years that it will turn out to be one of the biggest investment opportunities of your entire life -- no matter when you were born.But you must be prepared to act before this window closes.When you do, you'll benefit from one of the best wealth-creating strategies throughout history: buying early.You can get exclusive access to my new Cannabis Cash Calendar pick the moment it's released on Tuesday, August 13th.Click here for more on this incredible opportunity.As of this writing, William White did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell for an Economic Slowdown * 7 Marijuana Penny Stocks That I May Buy * 7 of The Best Schwab ETFs for Low Fees The post Marijuana Legalization Inches Closer With Historic Reform Hearing appeared first on InvestorPlace.
The former co-CEO of Canopy Growth (NYSE:CGC) has had a lot to say about the cannabis industry since his sudden departure July 8. One of his comments could ultimately benefit Quebec-based Hexo (NYSEAMERICAN:HEXO) and HEXO stock. Here's why.Source: Shutterstock Bruce Linton wasn't shy about his outing from his role of co-CEO at Canada's largest cannabis company. While the company's board attempted to spin the move as a mutual decision, Linton told CNBC that he was in fact fired from the company. InvestorPlace - Stock Market News, Stock Advice & Trading Tips"I think stepping down might not be the right phrase," he told CNBC, referring to the language in the company press release. "I was terminated."Constellation Brands (NYSE:STZ) CEO Bill Newlands suggested that Linton wasn't the right guy to take Canopy Growth to the next phase. Linton's an entrepreneur at heart, so he's probably not wrong to want more of an operational, globally trained business executive, who can take the company to the next level. "Our board was uniform," Newlands said. "We needed a different leader to take us to the next phase of growth."Although Constellation wasn't happy about Canopy's $39 million loss in its most recent quarter, it denies that had anything to do with Linton's ouster. Whatever the reasons, semantics aside, Linton had something interesting to say about the future direction of the global cannabis industry that could really help HEXO stock. * 7 of The Best Schwab ETFs for Low Fees It starts with "United" and ends with "America." Go South Young ManThe fact that Linton quarterbacked the tentative acquisition of Acreage Holdings (OTCMKTS:ACRGF) before he was summarily turfed says all you need to know about where he thinks the big money is in the cannabis industry. He wouldn't have agreed to spend $3.4 billion on a deal for Acreage if he didn't think the U.S. government would legalize cannabis on a federal level within the seven-year limit required by the proposed tie-up between the two companies. Already, Acreage is making plans to buy other U.S. companies in preparation for the eventual merger. Big money lies south of the border and Linton knows it. "Anybody who's dumb enough to launch a new cannabis company in Canada, I don't know what they're doing, they should have been at it six years ago. Canada is done," he told Bloomberg TV. "You're going to end up with a few winners and a whole bunch of people who wonder why they started."You might wonder what this has to do with Hexo and the U.S. market? Cannabis-Infused Drinks a Big Growth AreaThere is absolutely no possible way that Molson Coors (NYSE:TAP) didn't have a plan for south of the border when it entered into a 50/50 joint-venture with Hexo to make cannabis-infused drinks for the Canadian market last August. Hexo's VP of Strategic Development, Jay McMillan, recently stated that Truss, the name of the joint venture, is going to be ready to sell cannabis-infused drinks on Dec. 17, the first day they can be legally sold in Canada. "We'll have a very large supply so we'll be in a good position to be able to meet the demand of the marketplace and at the same time also ensure that we're meeting the variety that the marketplace wants," McMillan said in an interview at the World Cannabis Congress in Saint John, New Brunswick, in June. The joint venture can move production from one type of product to another based on consumer preference. Think of it as the beverage version of "Fast Fashion."More importantly, it's going to give Molson Coors an understanding of consumer preferences in a smaller market before jumping into a much bigger one south of the border. It plans to have CBD-infused beverages in eight states by 2020. However, I wouldn't be surprised if it was readying for the launch of cannabis-infused products the minute the federal government legalizes cannabis. Having worked with Hexo north of the border, I'd be surprised if the joint venture didn't extend to the U.S. over time. * 10 Best ETFs for 2019: The Race for 1 Intensifies With America being a much bigger market, Hexo could be on the precipice of a serious value-enhancement to HEXO stock. The Bottom Line on HEXO StockIf you're unsure about whether HEXO will follow Molson Coors into the U.S. market, you could always buy both stocks to ensure you're capturing any gains both stocks achieve as a result of their participation in cannabis-infused drinks. As an aside, both Canopy Growth and Cronos Group (NASDAQ:CRON) are ideally positioned for the U.S. market given their significant investments from Constellation Brands and Altria (NYSE:MO).Who knows? Molson Coors could end up owning a big piece of Hexo in the future. Only time will tell.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 Stocks to Sell for an Economic Slowdown * 7 Marijuana Penny Stocks That I May Buy * 7 of The Best Schwab ETFs for Low Fees The post Why Hexo Stock Is a Promising Buy Now appeared first on InvestorPlace.
Cronos Group (NASDAQ:CRON) shares have struggled of late. Since early March highs, Cronos stock is down about 35%.Source: Shutterstock Cronos stock managed to put together a modest rally last month, but it has faded. CRON sits at a one-month low at the moment.To be sure, CRON stock isn't alone. Other cannabis majors are scuffling. Canopy Growth (NYSE:CGC) has dropped steadily since late April, losing about a quarter of its value.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAurora Cannabis (NYSE:ACB) is off almost 30% since mid-March. Tilray (NASDAQ:TLRY) has stabilized, but after a long, steep decline. Hexo (NYSEAMERICAN:HEXO) has slid 41%. * 10 Best ETFs for 2019: The Race for 1 Intensifies For the biggest cannabis stocks, investor patience is drying up. Why that is remains unclear. Valuation could be a concern. It's likely that there's a "OK, what's next?" response after Canadian legalization in October.The problem for Cronos Group stock, however, is that even when sentiment returns, it's not clear what the company can do to spark investor enthusiasm.The near- to mid-term worry is that if cannabis stocks continue following, CRON stock will too. And if they rise, Cronos stock may well underperform peers until the wisdom of its plans become more clear - and Cronos starts showing real success. The Canada Problem for Cronos StockIt's become increasingly clear that the Canadian market isn't big enough and that there are real worries about too much supply in cannabis flower more broadly. As I've noted before, prices have crashed in U.S. regulated markets due to oversupply.In March, Tilray's CEO predicted similar issues in Canada as soon as next year. Aurora's strategy clearly is predicated on the idea that Canada alone isn't enough.Cronos seems to be operating on similar principles. Despite its US$1.8 billion investment from Altria (NYSE:MO), its production capacity might not even make the top ten in Canada, as the Motley Fool has noted. Even with that cash on the books, Cronos isn't racing to build out its production capabilities.That strategy makes some sense, particularly if as feared the Canadian market simply isn't big enough. Oversupply in dried flower is a real concern. But as far as CRON stock goes, it raises the question of what catalyst might arrive any time soon.Cronos might be right in playing the long game. Investors - and particularly cannabis stock investors - haven't shown that same patience in recent months. The StrategyAs CEO Mike Gorenstein put it on the Q1 conference call, "Like Altria, we believe that the best way to create value through the supply chain is by working with contract farmers and not being farmers ourselves."Cronos simply isn't all that interested in producing dried cannabis flower. It would rather let others spend the money to create that supply, assuming it can then buy flower at cheaper rates down the line.Instead, the company is focused on derivatives and R&D. It's working with Ginkgo Biosciences to create new strains of cannabis that can yield purer and easier-to-extract THC and CBD.Its new Cronos Device Labs in Israel will focus on fine-tuning vaporizers for varying customer demands. Production in Colombia is focusing on hemp over cannabis, with Gorenstein predicting on the Q1 call that CBD would outpace THC in terms of growth in the coming years.The Altria partnership should give Cronos an edge in these areas, given that tobacco company's long history with regulators. But there's risk here as well.The efforts with Ginkgo may not pan out. Even if they do, the new strains may not be all that valuable, if 'natural' strains are abundant and cheap as other companies build out capacity. Vaporizer demand may be lower than expected.There's certainly a risk that while Cronos plays around the edges of the market, rivals like Canopy and Aurora simply overpower the market. Canopy has more cash thanks to its deal with Constellation Brands (NYSE:STZ,NYSE:STZ.B).Aurora will give its stock to any company that will take it. If an investor believes that cannabis production will be big business globally, it's tough to believe that Cronos will be the big winner. The Long-Term Case for Cronos StockFrom a long-term standpoint, Cronos' strategy does seem wise. It's a good idea to keep US$1 billion or so in the bank in an industry in upheaval.Canadian suppliers are going to go bust; that's simply the nature of any growing market. Unexpected new markets may emerge elsewhere. Keeping capital on hand enhances flexibility, which seems like a compelling attribute to have as cannabis legalization (both recreational and medical) expands.Similarly, focusing on higher-value-add and higher-margin products makes sense. One need only look at the difference in valuation between Altria and Pyxus International (NYSE:PYX), an Altria grower, to understand what that will be the case in cannabis as well.The issue over the next 1-3 years, however, is that the strategy appeals to those of us (myself included) who think cannabis stocks are too expensive to begin with.Again, Cronos is set up for a future where oversupply hits prices and/or the global cannabis market moves slower than bullish investors expect. In both scenarios, cannabis stocks come down - and it's unlikely, though not impossible, that CRON stock emerges unscathed.In a sense, Cronos stock is the pot stock for investors who question whether pot stocks have rallied too far. If those investors are right, they're betting off staying as patient as Cronos is willing to be. As such, even with CRON stock cheaper, there's seemingly little need to rush in.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell for an Economic Slowdown * 7 Marijuana Penny Stocks That I May Buy * 7 of The Best Schwab ETFs for Low Fees The post Cronos Isn't in a Rush. Investors in Cronos Stock Shouldn't Be Either appeared first on InvestorPlace.
Health Canada issues a non-compliance report on CannTrust (CTST) regarding its greenhouse facility in Pelham, Ontario, which is used for growing cannabis. Shares take a hit.