14.30 -0.04 (-0.28%)
After hours: 5:16PM EDT
Commodity Channel Index
|Bid||14.36 x 1300|
|Ask||14.36 x 1100|
|Day's Range||13.53 - 14.51|
|52 Week Range||9.00 - 52.74|
|Beta (5Y Monthly)||2.80|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
Are marijuana stocks on U.S. exchanges a good buy now? The marijuana industry gets a lot of hype, but look past the smoke and analyze pot stocks on their fundamentals and technicals.
Canadian producers were counting on a rollout of new stores in the province to help lift the country’s disappointing sales growth.
Constellation Brands (STZ) reports strong fourth-quarter fiscal 2020 results, driven by continued strength in the beer business and gains in the wine & spirits segment.
Constellation Brands , brewer of Corona beer, beat Wall Street's fourth-quarter earnings and revenue expectations but declined to offer guidance due to the impact of the coronavirus pandemic. Constellation Brands reported fourth-quarter net income of $398.4 million, or $2.04 a share, compared with $1.239.5 billion, or $5.87 a share, a year ago. "In this time of uncertainty, we believe we have ample liquidity and financial flexibility and remain committed to our investment grading," Chief Financial Officer Garth Hankinson said in a statement.
The cannabis sector looked like it was ready to come roaring back to life to start 2020. But long before the coronavirus began sweeping through the world, Aurora Cannabis (NYSE:ACB) and its peers were feeling the selling pressure. Aurora stock now trades for less than a buck, causing investors to wonder what's next.Source: Shutterstock I have not been a fan of Aurora stock for some time. Once support failed in the summer, there was no reason to be long this name. I didn't like it in August or in December, and wasn't surprised when it hit new lows in February.Aurora's main problem is similar to many of its peers: it doesn't have strong enough fundamentals to back up its valuation. When the financials aren't the catalyst, a stock needs strong technicals for the bulls to have a chance. But once support gave way, ACB has done nothing but move lower and lower.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWith all that said, I don't like to stay fixed on a position. Meaning that, if the situation warrants going from bearish to bullish, I will. Does Aurora stock deserve that designation? Let's take a closer look. Valuing Aurora StockIf you recall from February, Aurora gave investors plenty to chew on. Its CEO was stepping down and the company took large impairment charges and write-downs. Aurora also announced preliminary fiscal second-quarter results that were well below Street expectations. * 30 Stocks on a Deathwatch Further, the company said, "We believe that the long-term opportunity for Aurora remains very compelling, despite a slower than anticipated rate of industry growth in the near-term."That was before COVID-19 became the world's focal point. However, it's not clear what impact the coronavirus is having on the cannabis space. To some degree, it may actually be helping. Alcohol sales have been on the rise amid the panic, and at least one analyst has made the case that cannabis sales have been steady.While most consumers were okay in mid-March, millions have now been out of work for a few weeks. The longer it takes for them to get back to work, the worse the impact is going to be on the economy. At one point not long ago, New York was a big potential catalyst for cannabis. But with COVID-19 wreaking havoc on the state, it's clear that marijuana legalization is on the backburner, according to the governor.In the most recent quarter, Aurora stock had 156 million CAD in cash. Current assets of 629.8 million CAD easily outweighed current liabilities of 213.9 million CAD. However, in that current asset count was 45 million CAD of restricted cash and over 200 million CAD in inventory.Further, ACB is not free cash flow positive or profitable. Its recent quarter showed a sequential decline in revenue and almost flat year-over-year growth. Guidance for the current quarter put sequential growth at flat to negative. In short, the financials don't get me very excited.Trading ACB StockA look at the technicals reveals a slightly improved situation, but not by much. As you can see from the one-year daily chart, Aurora stock has been trending lower since support near $7 broke in July. Click to Enlarge Source: Chart courtesy of StockCharts.comPurple arrows on the chart highlight this level turning from support to resistance in August. Since then, a series of lower lows and lower highs have followed before shares completely blew out in March.ACB bottomed at 60 cents before rebounding higher with Canopy Growth (NYSE:CGC), Tilray (NASDAQ:TLRY), Cronos Group (NASDAQ:CRON) and others from the space. For Aurora stock, that rally topped out at $1.13 before shares retreated back below $1.So, what now?Shares made an extreme move lower that, with time, may prove to be the low. But at this point in time, we don't know that with any certainty. From here, bulls need to see Aurora put in a higher low. They also need to see the stock break out of this dreadful downtrend. If it can do both -- break the downtrend and begin trending higher -- then Aurora stock may have a place as a speculative holding in one's portfolio.Unfortunately, we're not there yet and because the financials aren't attractive enough on their own, Aurora as a whole is a pass for me. I certainly wouldn't be short at this point, but I wouldn't be long either. Instead, use the market's decline as an opportunity to buy high-quality stocks at a discount.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 * 25 Stocks You Should Sell Immediately * 1 Under-the-Radar 5G Stock to Buy Now * This Stock Picker's Latest Video Just Went Viral * The 1 Stock All Retirees Must Own The post Below $1, Is Aurora Stock Finally a Buy? appeared first on InvestorPlace.
SMITHS FALLS , ON and TUTTLINGEN, Germany , April 3, 2020 /CNW/ - Storz & Bickel is pleased to announce that Health Canada has issued a Medical Device Licence for the new Volcano Medic 2 (License No.: 103842), an advanced cannabis vapourizer device for medical use. The device is currently available for purchase on Spectrum Therapeutics, Storz & Bickel's online shop, and various medical cannabis clinics across Canada.
Terry Yanofsky and David Lazzarato appointed as John Bell and Peter Stringham retire from the CGC Board. SMITHS FALLS, ON , April 1, 2020 /CNW/ - Canopy Growth Corporation ("Canopy Growth" or the "Company") (WEED.TO) (CGC) is pleased to announce that Ms. Terry Yanofsky and Mr. David Lazzarato have been appointed to the Company's Board of Directors, effective immediately.
The global economic shutdown due to the coronavirus was a potential nightmare for Aurora Cannabis (ACB). The Canadian cannabis company is in the middle of cutting capacity and costs for the new reality in the market while trying to avoid running out of cash. A complete shutdown of cannabis stores would’ve crushed any remaining hope in financial improvements at the business, but the market has seen the opposite effect of the shutdown actually lead to a boost to cannabis sales as consumers stay at home.Booming SalesOn March 17, Canopy Growth (CGC) announced the closure of all 23 of their retail stores in Canada due to the Covid-19 outbreak. Since this point, sales have soared in Canada as consumers have rushed to purchase weed.Several provinces including Ontario and Quebec have deemed cannabis stores as essential while the Ontario Cannabis Store’s website had the director of communications confirm sales over the weekend doubled the sales from only two weeks ago. Likewise, Nova Scotia reported cannabis sales spiked 76% last week.Whether due to fears of store closures or adult users staying at home with no work, people have flocked to cannabis stores to ensure supplies to wait out the virus from home. In addition, a supplier like Aurora Cannabis gets the extra benefit of not having Canopy Growth stores open.The one major caveat is that Canadian cannabis sales could yet be impacted as the virus outbreak rolls throughout the country and any lingering impact is unknown.RescueThe sales boost couldn’t have come at a better time. The Canadian sector was flooded with cannabis supply and companies were struggling to generate profitable revenue growth. Aurora Cannabis alone had C$216 million in inventory on their books suggesting enough supply for the next year.The company couldn’t afford another quarter of weak sales. Based on the initial sales indications from March, Aurora Cannabis should top analyst estimates for a revenue rebound to C$65 million in the current quarter. The company had net revenues of C$63 million in the December quarter.The company has initiated a cost reduction program to get quarterly operating expenses below C$45 million. A key aspect of any turnaround is for Aurora Cannabis and the sector to actually generate revenue growth in 2020 with new retail stores opening and Cannabis 2.0 products launching. The combination will help cut the EBITDA losses.Ontario was set to start allowing 20 new stores to open per month and the Covid-19 outbreak might provide some regulatory and construction delays, but the market should start seeing consistent growth in the key province. Aurora Cannabis has survived the bottom and can now continue with at-the-market equity sales to raise funds for operations and the last remaining capex spending.TakeawayThe key investor takeaway is that Aurora Cannabis got the sales boost the company needed to get over the hump. The former CEO selling 12.16 million shares into the open market on March 16 was the headline that likely created a bottom in the stock below $0.70.Aurora Cannabis should see the diluted share count balloon to 1.3 to 1.4 billion shares outstanding. As the company approaches an EBITDA breakeven level later in the year with the streamlined operations, the stock will finally get a footing back above $1.According to TipRanks, the consensus on Wall Street is that Aurora stock is a “hold” for investors. But TipRanks might as well have said “buy” — because analysts, on average, think the stock, currently at $0.99, could zoom ahead to $1.71 within a year, delivering 71% profits to new investors. (See Aurora stock analysis on TipRanks)
States like New York will see significant revenue shortfalls due to coronavirus. Legalizing cannabis could make up for a quarter of the losses, which could help push legislation forward.
We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy […]
The coronavirus pandemic has affected the cannabis and psychedelics industries in many different ways -- some more negative than others.While we continue to see massive layoffs, management shakeups and event cancellations across the board, businesses are struggling to adapt to their new situations, offering delivery services, free access to virtual platforms and more. Many cities have declared quarantines, but deemed dispensaries as essential services, allowing them to continue to operate under certain guidelines and limitations."The COVID-19 virus has affected everyone's normal way of doing business. Cannabis companies are more accustomed than most to pivot and pivot hard when things change overnight," Green Market Report CEO Debra Borchardt told Benzinga."Delivery services have increased, curbside options have begun and many dispensaries have vowed to remain open at some level. Sales are robust at most as the stress of this situation has caused many consumers to need cannabis to reduce anxiety or at least make the quarantine period a little more tolerable."If you want to get this news recap in your email inbox every week, please subscribe to https://tinyletter.com/javierhasseKhiron Life Sciences Corp (OTC: KHRNF) announced good news from Colombia: it has received an authorization to start manufacturing cannabis-containing medicines, becoming the first company operating in the country to do so. Khiron said it expects to start filling prescriptions in the next few days.Cannabis ETFs were once again in the red. Over the last five trading days:The ETFMG Alternative Harvest ETF (NYSE: MJ) lost 5.9%.The AdvisorShares Pure Cannabis ETF (NYSE: YOLO) tumbled 5.6%.The Cannabis ETF (NYSE: THCX) dropped 0.4%.The Amplify Seymour Cannabis ETF (NYSE: CNBS) shed 3.2%.The SPDR S&P 500 ETF Trust (NYSE: SPY) closed the period down 15%.Back in the U.S., Massachusetts witnessed an uptick in cannabis prices driven by high demand in a limited supply context.We also saw a report that Cronos Group, Inc. (NASDAQ: CRON) is under SEC investigation after failing to file its fiscal 2019 financial statements twice.Also check out our new bi-monthly psychedelics news roundup, "Psyched," and news in Spanish on El Planteo.In the psychedelics world, Mindbloom said it has made its ketamine treatment available to New Yorkers in a fully remote format. More about how this works here.More Cannabis News From The Week Cantor Fitzgerald analyst Pablo Zuanic slashed the sell-side firm's Tilray Inc (NASDAQ: TLRY) price target in the wake of Canada-based company's pricing of a .4-million equity offering. Zuanic maintained a Neutral rating on Tilray and lowered the price target from $17.50 to $4.90.While Zuanic said he understands the need to raise funds, he was surprised Tilray would choose "the worst of times" to price the offering. The analyst weighed whether other cannabis companies will follow suit, and said that in the case of Aurora Cannabis (NYSE: ACB), the company is likely to rely on cost cuts, positive EBITDA and lower capex to get by."The boom and bust in Canadian cannabis stocks has scared away a good number of investors," Zuanic said, adding that Cantor is comfortable with underlying trends.Zuanic also maintained an Overweight rating on CV Sciences Inc (OTC: CVSI), but reduced his price target from $1.60 to 80 cents, following fourth-quarter results that fell short of expectations.CanaFarma Hemp Products signed a lease for 100 acres of farmland in Cato, New York, almost doubling the acreage the company had in 2019.In 2019, CanaFarma Hemp worked a 55-acre farm in New York and delivered 128,000 pounds of hemp biomass, achieving a yield of over 2,300 pounds per acre. That's 50% better than the average farm yield, which CanaFarma said is in the range of 1,500 pounds per acre.Cannabis distribution company SparqOne entered distribution agreements with cannabis brands Kushy Punch, Church, Mindset Organics, Branded and Smoakland."The SparqOne team is excited to be joining forces with such renowned cannabis brands and we are looking forward to bolstering the product lineup for our dispensary partners. We have a strong relationship with almost every dispensary in the state and we can attribute that to our customer service, highly advanced logistics and dedication to next-day delivery no matter how large the order or how far the dispensary," said Andrew Dorsett, general manager of SparqOne.AXIM Biotechnologies (OTC: AXIM), an international health care solutions company targeting oncological and cannabinoid research, announced the full acquisition of leading oncology R&D company Sapphire Biotech, Inc. As part of the deal, AXIM has acquired 100% of the capital stock of Sapphire and will operate the company as a wholly owned subsidiary led by CEO Catalina Valencia."Through this acquisition, AXIM expands its historically cannabinoid-based research to include a focus in oncology," said John W. Huemoeller II, CEO of AXIM Biotech. "Sapphire was attractive to us because of its renowned research team, impressive discoveries in the field of oncology, and impressive IP portfolio."Nabis Holdings Inc. (OTC: NABIF)(CSE: NAB) cancelled an agreement to acquire Desert's Finest dispensary in California."Given the downturn in the cannabis industry, capital markets are no longer helping fuel growth, resulting in the company narrowing their focus on acquiring assets that fit into our vertically integrated strategy," Nabis CEO Shay Shnet said in a statement. "Although the Desert's Finest acquisition was a great opportunity for us to enter the California cannabis market, acquiring a standalone dispensary no longer fits into our strategic plan."HEXO Corp. (NYSE: HEXO) said it has not met the deadline for filing its interim financial statements for its fiscal second quarter because of several unexpected circumstances, such as having a huge impairment loss in the quarter, with the final amount still to be calculated. Until the filings are submitted, Hexo will hold a blackout on trading by directors, officers and remaining insiders of the company.It has revealed some financial results for the quarter, including net revenue of $17 million, compared to $14.5 million in the previous quarter, and gross revenue of $23.8 million versus $19.3 million in the first quarter.Canopy Growth (NYSE: CGC) decided to temporarily stop operating all corporate-owned Tokyo Smoke and Tweed retail stores across Canada, respecting the advice provided by various health bodies concerning the COVID-19 outbreak."We have a responsibility to our employees, their families and our communities to do our part to "flatten the curve" by limiting social interactions. For us, that means shifting our focus from retail to e-commerce," said Canopy Growth CEO David Klein.Medicine Man Technologies Inc. (OTC: MDCL) appointed Nirup Krishnamurthy to the role of chief integration and information officer.Cannabis industry veteran Joe Hodas joined Wana Brands as chief marketing officer.Aleafia Health Inc. (OTC: ALEAF) reported a surge in fiscal year 2019 and fourth-quarter revenue. The Canadian company said that its fourth-quarter net revenue of $6 million represents a 22% quarter-over-quarter increase.For full fiscal 2019, Aleafia posted net revenue of $16.4 million, 391% higher than in fiscal 2018. The revenue rise was mainly driven by an increase in net cannabis revenue of $11 million and $2 million in clinic revenue, the company said.For the quarter, Aleafia disclosed a net loss of $9.8 million versus net income of $1.9 million in the prior quarter. The company also reached its first quarterly positive adjusted EBITDA of $200,000 versus a loss of $2.5 million in the previous quarter.Crescita Therapeutics Inc. (TSX: CTX) (OTC: CRRTF) disclosed its fourth quarter and fiscal 2019 financial results. The Mississauga-based company reported annual record revenue of CA$22.34 million ($15.52 million), up by 34.3% from the previous year. Quarterly revenue of CA$3.82 million was down by 38.4% from the same period in the prior year.Sproutways, an open marketplace for cannabis genetics, is teaming up with greenhouse operator Wave Rider Nursery and Santa Cruz Naturals. The agreement between Sproutways, Monterey Bay-based Wave Rider and the Santa Cruz County dispensary aims to provide streamlined access to METRC-compliant seeds, clones and flowers.Greenhouse operator Village Farms International (NASDAQ: VFF) (TSX: VFF) received an infusion of CA$10 million ($6.92 million) in capital thanks to a deal with Beacon Securities Ltd. The deal, announced Thursday, calls for the purchase of 3,125,000 common shares in Village Farms at CA$3.20 per share.Green Growth Brands (CSE: GGB) (OTC: GGBXF) announced that Peter Horvath resigned as CEO and as a member of the board of directors. Horvath had served as CEO of Green Growth since early 2019 and joined the board in mid-2018.COO Randy Whitaker was named as Green Growth's interim CEO.Harvest One Cannabis (TSE: HVT) (OTC: HRVOF) appointed CCO Andy Bayfield to the position of interim CEO, effective immediately. Bayfield will also be appointed to the company's board of directors. Frank Holler was also appointed as executive chairman. The company has accepted the resignation of former CEO Grant Froese from his executive position and from the board of directors.As COVID-19 spreads around the globe, we're seeing an increasing number of hospitals and clinics that are not adequately prepared for the surge in patients looking to see a doctor. During this crisis, Heally is making its digital patient platform available to any physician's office to use at no charge.For patients, it costs $39.Top Stories Of The Week Check out the top stories on Benzinga Cannabis this week: * Why Restructuring Efforts Don't Necessarily Signal The End Of A Cannabis Company's Downturn * Should I Use Marijuana During The Quarantine? * Cannabis Inhalers: The Next Big Thing For Asthma And Cancer Pain Relief? * How The Coronavirus Is Impacting The Cannabis Industry * Coronavirus, Weed And Nicotine: Are Smokers And Vapers Facing Greater Risks? * Women's History Month: The Women of Cannabis Advocacy And Legalization * How To End Cannabis Stigma Forever * Is Smoking Marijuana Dangerous? A Scientific Review Of Cannabis Smoking And Lung Cancer - Compared To Tobacco * New Cannabis Products: A Broad Spectrum Line, A CBD Oral Applicator, And (Of Course) CBD/CBG Hand Sanitizer * New Cannabis Products: MyCHELLE And Prima's Skincare, Cut&Dry's Flower * Amsterdam-Based Dutch Passion Announces High-THC Auto Strain, Unfortunately Timed Italy Venture * How Social Distancing Is Driving Cannabis Demand * BofA On Organigram, Tilray, Aphria's Cash, Demand Trends * 3 Ways To Share Cannabis Without Transmitting The CoronavirusCheck out these and many other cannabis stories on Benzinga.com/cannabisLead image by Ilona Szentivanyi. Copyright: Benzinga.See more from Benzinga * The Week In Cannabis: Coronavirus Drop, Major Financing Agreements, Psychedelics Getting Hot * Canopy Growth's Storz & Bickel Bypasses Apple's Vaping App Ban With New Web App * Longtime Medicine Man Employee Launches Cannabis Consultancy(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Bruce Linton, formerly the CEO of cannabis behemoth Canopy Growth (NYSE: CGC) and now Director of Mind Medicine (OTC: MMEDF) is this week's guest on The Green Rush! Since his departure from Canopy in 2019, Bruce has since moved onto several new ventures within the cannabis and psychedelics spaces but is still the unquestioned face of the industry. Started with CNBC's Kevin O'Leary, Bruce's most notable role right now is with Mind Medicine, a neuro-pharmaceutical company that discovers, develops and deploys psychedelic inspired medicines to improve health, promote wellness and alleviate suffering.Fresh off taking Mind Med public on the NEO Exchange, Bruce sat down with Lewis to chat about what he's been up to since his departure from Canopy. The two touch on all of the headlines dominating the cannabis industry including most notably the public markets and capital crunch as well as what his outlook is for the long and short-term future of the space. In addition, the two tackle the burgeoning psychedelics industry and explore the work that Mind Med is currently undergoing, why now was the time to take the company public and what convinced Bruce that psychedelics were the real deal.In addition, the pair discuss Bruce's other cannabis ventures including his roles at Vireo Health (OTC: VREOF), Better Choice Company (OTC: BTTR) and Gage Cannabis. As most know, Bruce is a one-of-a-kind leader in this space and his interview with Lewis provides a ton of great insights on how he is approaching the future.Don't sit back, lean forward and enjoy!See Also: Green Rush Podcast: Vanguard Scientific's Matthew Anderson On The Cannabis Capital Crunch And Ancillary ServicesBruce Linton, Director of Mind Medicine Inc.Bruce has a passion for entrepreneurship and making a positive difference in the world. He brings a wealth of experience in building strong technology driven companies, developing world class teams and positioning his companies to deliver exceptional customer value and service.In his newly appointed role as an Active Advisor, Bruce will serve as Executive Chairman with GAGE Cannabis Co., following completion of the acquisition of Innovations - GAGE is innovating and curating the highest quality cannabis experiences possible for patients in the state of Michigan and bringing internationally renowned brands to market.See Also: Green Rush Podcast: ELLO's Hershel Gerson Says The Average Cannabis Company Has 6 Months Of Cash Before They Run OutHe is Special Advisor with Better Choice Company - (BTTR) BTTR is an animal health and wellness cannabinoid company that acquired TruPet LLC, an online seller of ultra-premium, all-natural pet food, treats and supplements, with a special focus on freeze dried and dehydrated raw products. And Director with MindMed - MindMed is assembling a drug development pipeline of psychedelic inspired medicines planning or undertaking FDA trials.Bruce is also an Activist Investor with SLANG Worldwide Inc. (OTC: SLGWF) is a leading global cannabis consumer packaged goods company with a robust portfolio of renowned brands distributed across 2,600 stores in 12 U.S. states. And with OG DNA Genetics Inc. ("DNA") - DNA has built and curated a seasoned genetic library and developed proven standard operating procedures for genetic selection, breeding, and cultivation.He is the Founder and Former Chairman and CEO of Canopy Growth Corporation (CGC/WEED), Co-Chairman and past CEO of Martello Technologies, and Co?founder of Ruckify & Better Software.Links and mentions in the show * https://www.betterchoicecompany.com/ * https://vireohealth.com/ * https://gageusa.com/ * https://www.mindmed.co/ * https://www.canopygrowth.com/Links to the guest's company and social media accounts * Bruce's Website: https://www.brucelinton.com/ * MindMed Website: https://www.mindmed.co/ * MindMed's Twitter: https://twitter.com/mindmedco/ * MindMed's Instagram: https://www.instagram.com/mindmed_co/Show Credits:This episode was hosted by Lewis Goldberg of KCSA Strategic Communications.Special thanks to our Executive Producer Nick Opich and Program Director Shea Gunther.For cannabis and psychedelics content in Spanish, check out El Planteo.The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.See more from Benzinga * Martha Stewart Will Launch CBD Products For Animals: Here's What You Need To Know * The Historic Fontainebleau Hotel Takes On A New Decade, Welcoming A Cannabis Event For The First Time Ever * Is Drake The Next Superstar Of The Cannabis Industry?(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Cannabis stocks have not been immune to the market selloff. In fact, Canopy Growth Corp (NYSE:CGC) stock has lost two-thirds of its value in the past six months.Source: Shutterstock But while the outlook has gotten tougher for Canopy in recent months, it is still the best option for cannabis investors today. The rough patch for cannabis stocks may not have reached its low point just yet.But Canopy's management is making all the right moves to ensure the company is well-positioned for the eventual recovery.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn the meantime, Canopy has the strongest balance sheet of its peers. In addition, if the share price continues to decline, Canopy could be an appealing buyout target for minority investor Constellation Brands (NYSE:STZ, NYSE:STZ.B). Canopy Is Making the Right MovesLast year, Canopy fired founder and co-CEO Bruce Linton and replaced him with former Constellation CFO David Klein. Klein is a numbers guy. His first major actions since taking over as CEO demonstrates an aggressive strategy to help shore up the company's financial situation. * 10 of the Best Long-Term Stocks to Buy in a Bear Market Earlier this month, Canopy announced it is shutting down 3 million square feet of production capacity. It also laid off 500 employees and said it would be taking up to a $550 million charge. Following the announcement, Bank of America analyst Christopher Carey said the move was exactly the type of financial discipline he was hoping Klein would bring to the table."While we acknowledge wasteful past spending which preceded today, we think these cuts are the right move for long term, showing mgmt. has the wherewithal to do what is required to create a sustainable, profitable business," Carey says.Canopy has also established itself as an early market leader in Canada with roughly 25% share, according to Bank of America. That share may grow if Canopy's competitors start dropping like flies because of their balance sheets.At the same time, Canopy's conditional buyout of U.S. multi-state operator Acreage Holdings (OTCMKTS:ACRGF) has it well-positioned to take a similar first-mover advantage in the U.S. market should cannabis ever be legalized on a federal level. Canopy Has a Strong Balance SheetThe biggest selling point for CGC stock at this point may be the fact that is has the best balance sheet in the business. Canopy ended 2019 with 1.6 billion CAD in cash and cash equivalents, according to Bank of America. While many of its peers are ramping up debt at any cost to stay afloat, Canopy is actually paying down its debt.Last quarter, Canopy reported just 536 million CAD in long-term debt, down from 842 million CAD in March 2019. Canopy also reported 49% sales growth and just 34% growth in operating expenses. Carey says the capacity and staff cuts will significantly reduce Canopy's working capital drain in coming quarters, improving margins even further.Ultimately, Carey says Canopy will end up in a position of financial strength when the cannabis industry begins to recover."Overall we are favorable to Canopy's long-term prospects, as a leading balance sheet have allowed Canopy to scale both in Canada and abroad (specifically the US), at a faster clip than peers," Carey says. CCG Stock Has Downside ProtectionCanopy also has a major potential catalyst in its back pocket if the share price continues to fall. Constellation Brands took a 38% stake in Canopy for about $4 billion back in August 2018. Since that time, CGC stock is down more than 70%. But Constellation has replaced the Canopy CEO with its own former CFO. Klein is now making bold moves to improve the company's financial situation.I believe there is a distinct possibility Klein was assigned to the position of Canopy CEO to get the company's financial ducks in a row in preparation for a potential Constellation buyout. If Constellation loved taking a 38% stake for $4 billion, it could theoretically get the other 62% of the company today at a price in the $3.5 billion range.The further CGC stock falls during this downturn, the more appealing a buyout will look to Constellation. In that sense, CGC stock has a downside protection that other cannabis stocks do not have.Canopy has a market share lead in Canada and potentially in the U.S. It has a strong balance sheet and improving fundamentals. And it has a financial backer with deep pockets that could potentially buy out the stock at some point. While most of the cannabis group is reeling, CGC stock still looks like a solid long-term investment.Wayne Duggan has been a U.S. News & World Report Investing contributor since 2016 and is a staff writer at Benzinga, where he has written more than 7,000 articles. Mr. Duggan is the author of the book Beating Wall Street With Common Sense, which focuses on investing psychology and practical strategies to outperform the stock market. As of this writing, Wayne Duggan does not hold a position in any of the aforementioned securities. More From InvestorPlace * America's Richest ZIP Code Holds Wealth Gap Secret * 10 of the Best Long-Term Stocks to Buy in a Bear Market * 7 "Perfect 10" Healthcare Stocks to Buy Now * Where the FANG Stocks Sit in This Wild Market The post Canopy Growth Stock Is the Best Coronavirus Cannabis Play appeared first on InvestorPlace.
The selloff in the market and in Canopy Growth (NYSE:CGC) stock both continue. Markets plunged again earlier this week, and Canopy stock hasn't been immune to the selling pressure. Now, shares trade back where they did in 2017.Source: Jarretera / Shutterstock.com As I've argued over the past few weeks, investors need to keep their cool. This selloff has not been easy and certainly has not been fun. But over time, the economy and the markets will recover.In the meantime, however, the volatility is dispiriting. However, as I've told subscribers of my Cannabis Cash Weekly service, in these environments investors sometimes have to step back and let the chaos play out.InvestorPlace - Stock Market News, Stock Advice & Trading TipsTaking that step back, the opportunity in CGC stock becomes more clear. The long-term growth opportunity in cannabis is delayed -- not eliminated. Canopy is the industry's leader, and should remain so. In fact, it may emerge with an even stronger position. * 10 Stocks to Invest In for a Post-Coronavirus Whipsaw Canopy isn't going anywhere. This, too, shall pass -- and when it does, CGC stock will rally sharply. Canopy Cuts BackEven before panic gripped the markets, it was becoming increasingly clear that the cannabis industry was headed for a shakeout. And that shakeout is almost guaranteed at this point.In the sector as a whole, there is too much debt and too much capacity. Canopy chief executive officer David Klein made precisely that point in an interview on Feb. 14. "There's not a lot of market demand for cannabis production facilities," he told Yahoo! Finance. "There's a lot of capacity in Canada and no logical buyers."That capacity is why Canopy announced earlier this month that it was closing two facilities in British Columbia. Furthermore, a greenhouse project in Ontario also is being canceled. Canopy isn't throwing good money after bad.Wall Street largely cheered the move -- for good reason. It cuts Canopy's costs, and in turn, speeds its path toward profitability. It also keeps the company from participating in "race to the bottom" pricing in wholesale cannabis.It's also a decision many other cannabis companies won't be able to make. An Industry Shakeout LoomsCanopy can make that decision because of its fortress balance sheet. In 2018, Constellation Brands (NYSE:STZ,NYSE:STZ.B) invested some $4 billion into Canopy Growth.Much of that money has been spent. Canopy has made acquisitions, and spent heavily to build out production assets. In fact, it's clear in retrospect that previous management spent too much. That's a key reason why Constellation sent Klein -- formerly its chief financial officer -- to take the top spot at Canopy.However, Canopy still has a good chunk of that cash remaining. As of Dec. 31, the company had 2.3 billion CAD (about $1.6 billion) in cash on its balance sheet. With losses coming down and long-term debt of just 536 million CAD ($373 million), the company is in excellent financial shape.To put it simply, Canopy isn't going bankrupt -- but other producers will. There's a real chance the equity in Aurora Cannabis (NYSE:ACB) gets wiped out, one reason I've long recommended even cannabis bulls avoid that name. Moreover, MedMen Enterprises (OTCMKTS:MMNFF) had to call off its acquisition of PharmaCann -- likely due to financing worries. Its OTC stock price -- just 19 cents -- shows its desperate state.The news is just as bad, if not worse, for many smaller, private operators. Those companies don't have the cash to weather store closures or any short-term effects.Canopy, however, does. And that positions it well going forward. How CGC Stock Can BenefitCertainly, a worldwide pandemic is not how anyone hoped the cannabis industry would become more rational. But it's also likely that the response to the coronavirus from China simply will be the catalyst, not the cause. Given debt levels and overcapacity, many smaller operators were going to fail regardless.That said, Canopy would benefit either way. In fact, a recent transaction shows how. Last week, Canopy and TerrAscend (OTCMKTS:TRSSF) entered into a loan agreement. Canopy is lending TerrAscend 80.5 million CAD, backed by TerrAscend's assets.The loan has an interest rate of 6.1% annually over the next decade -- but that's not the prize. Canopy also received more than 17 million warrants to buy TerrAscend shares, most of them at an exercise price of 3.74 CAD per share.If TerrAscend, which currently trades below 2 CAD, posts a huge rally, Canopy will get its money back while also owning a nice chunk of the company at an attractive price.If it doesn't, though, Canopy has first claim on its assets, brands, and retail operations.This kind of savvy deal is what Klein was hired to make. And it highlights the opportunities Canopy will have for the next few years. The company can patiently wait out the upheaval in its industry, and pick its spots to make investments that can drive significant value.Of course, that's exactly what investors should be doing right now. As they do so, they should give at least a long look to Canopy Growth stock.Matthew McCall left Wall Street to actually help investors -- by getting them into the world's biggest, most revolutionary trends BEFORE anyone else. The power of being "first" gave Matt's readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA) and +1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. Matt does not directly own the aforementioned securities. More From InvestorPlace * America's Richest ZIP Code Holds Wealth Gap Secret * 10 of the Best Long-Term Stocks to Buy in a Bear Market * 7 "Perfect 10" Healthcare Stocks to Buy Now * Where the FANG Stocks Sit in This Wild Market The post When the Smoke Clears, Canopy Growth Stock Will Be a Winner appeared first on InvestorPlace.
Cannabis is an early-stage business and early stage businesses often must raise capital. Tilray (NASDAQ: TLRY) stock is no exception. But the timing and circumstances surrounding a stock offering can tell an investor a lot about a company.Source: Jarretera / Shutterstock.com Tilray recently opted to raise $90 million via a stock offering. Unfortunately, the timing and details of the offering may be a huge red flag for investors. The OfferingOn Friday, Mar. 13, Tilray announced it had priced a $90 million stock offering at $4.75. TLRY stock subsequently tanked and for good reason. There are plenty of things for investors to hate about this offering.InvestorPlace - Stock Market News, Stock Advice & Trading TipsFirst, let's start with the price. The $4.75 price represented a 30.3% discount to Thursday's closing price of $5.95. Offerings are almost always priced below market price as an incentive for investors to buy in, but a 30% discount is a bit extreme. Stocks often at least temporarily trade in line with their offering prices or lower, so it's no surprise that TLRY stock crashed down to around $3 on Monday.Second, the offering represented 37% ownership dilution for existing shareholders. In other words, investors now own 37% less of the company following the offering.Third, $90 million really isn't that much money for that large of a dilution. In fact, $90 million is well less than half the $219.1 million in net losses the company reported in the fourth quarter of 2019 alone. Timing Is CriticalFinally, in my opinion, the worst thing about this offering was the timing. Companies always want to raise capital from a position of strength, not weakness. This time last year, TLRY stock was trading at around $70 per share. As recently as last month, the stock was trading above $20. In fact, any other time in the history of the freaking stock would have been a better time to raise capital than right after we crashed into a bear market.The timing of this offering tells me one of two things. Tilray management is completely clueless about finances, which seems unlikely. Or Tilray is absolutely desperate for cash. There's no other reason why management would choose to dilute shareholders by 37% by selling shares at a 75% discount to their market price just a month ago to raise less than half of the cash it burned last quarter."While we understand the need to raise funds, we are surprised Tilray management would pretty much choose the worst of times to price the offering," Cantor Fitzgerald analyst Pablo Zuanic says.He's not exaggerating. The warrants plus share issuance of the offering will increase share count by 38 million. The same offering priced at around $70 per share one year ago could have easily raised more than $1 billion for Tilray. How to Play TLRY StockThe only rational explanation for this offering is that Tilray management had no choice. At this point, they must be desperate for cash. That's not the position any investor wants their company to be in when the global economy is staring down the barrel of a recession.And don't bet on Tilray being self-funded anytime soon."Because of the company's well below average realized net pricing, we are more skeptical about a path to positive [earnings before interest, taxes, depreciation and amortization] which combined with aggressive guidance, leaves room for disappointment," Zuanic says.He has a "neutral" rating and $4.90 price target for TLRY stock, but I don't know how. Following news of the offering, Zuanic cut his price target by 72% from $17.50. But I have a hard time believing the only thing standing between Tilray and success is $90 million.Unless the global economy takes a dramatic 180-degree turn, I'm guessing Tilray will go back to raising capital again by the end of the year and from an even more desperate position. I can't even imagine what the next offering will do to the stock.For now, the name of the game in the cannabis space is access to capital and healthy balance sheets. Every stock will struggle in this climate. But I recommend Canopy Growth Corp (NYSE: CGC) and its financial backer Constellation Brands (NYSE: STZ) as the top play in cannabis at this time.Wayne Duggan has been a U.S. News & World Report Investing contributor since 2016 and is a staff writer at Benzinga, where he has written more than 7,000 articles. Mr. Duggan is the author of the book "Beating Wall Street With Common Sense," which focuses on investing psychology and practical strategies to outperform the stock market. As of this writing, Wayne Duggan does not hold a position in any of the aforementioned securities. More From InvestorPlace * America's Richest ZIP Code Holds Wealth Gap Secret * 10 of the Best Long-Term Stocks to Buy in a Bear Market * 7 "Perfect 10" Healthcare Stocks to Buy Now * Where the FANG Stocks Sit in This Wild Market The post Tilray Is Flirting with Disaster appeared first on InvestorPlace.
As Americans faced seclusion due to the COVID-19 pandemic, shoppers in San Francisco had the option of stocking up on one popular product with a minimal amount of human interaction: Marijuana.
At the World Health Organization media briefing held March 11, COVID-19 was officially declared a pandemic."This is not just a public health crisis, it is a crisis that will touch every sector," said Dr. Tedros Adhanom Ghebreyesus, WHO director-general, stated. "So every sector and every individual must be involved in the fight."Some cannabis companies have already been affected.Benzinga is covering every angle of how the coronavirus affects the financial world. For daily updates, sign up for our daily coronavirus newsletter.HEXO Postpones Filing Interim Financial Statements For Q2HEXO Corp. (NYSE: HEXO) said Tuesday it has not met the deadline for filing its interim financial statements for its fiscal second quarter because of several unexpected circumstances, such as having a huge impairment loss in the quarter, with the final amount still to be calculated.Until the filings are submitted, Hexo will hold a blackout on trading by directors, officers and remaining insiders of the company.It has, however, revealed some financial results for the quarter, including net revenue of $17 million, compared to $14.5 million in the previous quarter, and gross revenue of $23.8 million, versus $19.3 million in the first quarter.Canopy Growth Temporarily Closes Retail Locations In CanadaView more earnings on HEXOCanopy Growth (NYSE: CGC) announced Tuesday it has decided to temporarily stop operating all corporate-owned Tokyo Smoke and Tweed retail stores across Canada, respecting the advice provided by various health bodies concerning the COVID-19 outbreak."We have a responsibility to our employees, their families, and our communities to do our part to "flatten the curve" by limiting social interactions. For us, that means shifting our focus from retail to e-commerce," said David Klein, CEO, Canopy Growth.Lift & Co. Temporarily Lay Offs Part Of Workforce, Shuts Down Non-Profitable Sectors Lift & Co. Corp. (TSXV: LIFT) (OTC: LFCOF) reported Tuesday that it has temporarily stopped business activities of its non-profitable sectors and discharged some of its employees due to the coronavirus pandemic.This strategic move comes in an effort to save cash and long-term shareholder value amid the COVID-19 outbreak, the company said.Its Lift & Co. Expo and CannSell business will continue to operate as usual.New England Treatment Access Pauses Adult-Use Sales Massachusetts-based medical and recreational marijuana dispensary New England Treatment Access announced Monday that its Brookline store will be open only to medical patients starting March 16, and that adult-use sales will be temporarily paused.The decision comes in response to Governor Baker's executive order which forbids gatherings of more than 25 people.The company noted that all medical patient orders should be made through Reserve Ahead.See more from Benzinga * Tilray Analyst Cuts Price Target By 72% After Offering At 'The Worst Of Times' * Canopy Growth Signs CA.5M Loan Agreement With TerrAscend * Canopy Growth Analysts Back Closures, Layoffs: 'A Bold Move'(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Canopy Growth will temporarily close all its corporate-owned pot shops in the nation, but still offer online orders.
Canopy Growth Corp. said Tuesday it is planning to close all of its corporate-owned retail stores temporarily starting at 5 p.m. local time as it works to combat the coronavirus that causes COVID-19. The Canadian cannabis market leader, based in Smith Falls, Ontario, said the decision was deemed best for its retail workers. "This is a big decision but it was also an easy one to make -- our retail teams are public-facing and have been serving an above-average volume of transactions in recent days," Chief Executive David Klein said in a statement. Cannabis companies have been reported a spike in demand for weed as more and more people are ordered to hunker down at home. The decision affects 23 stores in Newfoundland, Saskatchewan, and Manitoba as well as the Tweed Visitor Centre in Smiths Falls, ON. The company will continue to provide medical cannabis to patients through is online platform. Shares rose 2.2% premarket, but have fallen 78% in the last 12 months, while the ETFMG Alternative Harvest ETF has fallen 75% and the S&P 500 has fallen 15%.