16.10 +0.01 (0.06%)
After hours: 7:56PM EDT
|Bid||16.10 x 2900|
|Ask||16.13 x 800|
|Day's Range||15.37 - 16.12|
|52 Week Range||5.61 - 25.10|
|Beta (3Y Monthly)||4.15|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
Canopy Growth and Cronos Group expressed reservations about Canada's THC limits on cannabis-infused edibles and beverages. Most marijuana stocks rose.
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.
Some of those may have gained their wealth through the Evolve Marijuana ETF (TSE:SEED) (OTC:EVVLF), which, in the last year, has delivered the best performance among all cannabis ETFs. Need more cannabis news? Evolve launched SEED on the Toronto Stock Exchange roughly 14 months ago.
With the markets near all-time highs, there has been a nice rally in cannabis stocks, but Aurora Cannabis (NYSE:ACB) seems to have missed the memo. ACB stock has been languishing.Source: Shutterstock During the past couple weeks, Tilray (NASDAQ:TLRY) has logged a return of 32% while Cronos Group (NASDAQ:CRON) is up about 17% and Canopy Growth (NYSE:CGC) has gained 11%.Unfortunately, ACB stock has been in an extended downtrend, going from $10 in March to $7.48.InvestorPlace - Stock Market News, Stock Advice & Trading TipsFor the year so far Aurora Cannabis stock is still up an impressive 43%. When it comes to cannabis stocks, there is usually quite a bit of volatility and this is not likely to change any time soon. * 6 Stocks Ready to Bounce on a Trade Deal The Pros And Cons of ACB StockThe bearishness with ACB has been the result of various factors. Although, perhaps the most important is the string of disappointing earnings reports. Note that the Canadian market has proven more difficult with the transitional to legalized marijuana. There have been challenges with the supply chain and retail expansion. What's more, black market sources have remained a persistent issue.But hey, such growing pains should be no surprise. If anything, the recent weakness does make ACB stock look relatively attractive. Consider that the consensus price target is $14.27, which implies 91% upside from current levels.So what are some of the catalysts to get ACB stock back on track? Well, first of all, the company is a top producer in the Canadian market. During the latest quarter, the production nearly doubled to 15,000 kilograms. But with the acquisition of MedReleaf and a myriad of other investments, the potential annual capacity is a hefty 570,000 kilograms.The early experience in the Canadian market is crucial. Aurora is building a solid infrastructure, which will allow for economies of scale. This make it so the company can better compete as cannabis becomes more commoditized in the Canadian market. In fact, Aurora is already becoming a streamlined low-cost provider.But another key - especially for the long haul - is the medical business. The pipeline includes 40 in-process and completed clinical trials and case studies. There has also been continued growth in the patient base, which grew by 5% in 77,136 in the latest quarter. Other Opportunities for ACB StockAnother important development is a recent partnership with the Ultimate Fighting Championship (UFC), which is the world's largest martial arts organization. The agreement calls for an exclusive multi-year focus on clinical research using Cannabidiol (CBD), which is the compound in the cannabis sativa plant that does not produce a high. In other words, there is much potential for breakthroughs with new treatments.With the passage of the Farm bill, the CBD opportunity in the US looks promising and should be a strong catalyst for growth. During the latest earnings call, Aurora chief corporate officerCam Battley had the following to say:"We are well positioned to pursue multiple angles through our deep research and product development capabilities, our regulatory expertise as well as our extensive global hemp infrastructure which we intend to expand through acquiring the shares in HempCo, not already owned by Aurora. CBD for both medical and wellness applications has incredible potential and we intend to fully leverage our capabilities, our infrastructure and our partnership potential to maximize shareholder value creation." Bottom Line on ACB StockIn mid-May, Aurora brought on board as a strategic advisor Nelson Peltz, who is the CEO of Trian Fund Management. He has decades of experience with consumer markets, with investments in companies like PepsiCo (NASDAQ:PEP), Keurig Dr Pepper (NYSE:KDP), Procter & Gamble (NYSE:PG) and Mondelez (NASDAQ:MDLZ).Peltz's involvement is a strong validator. He should also be essential in finding strategic partners.Of course, even with the advantages, ACB stock still has lots of risks. But for investors looking for an interesting cannabis play, this one definitely is worth considering.Tom Taulli is the author of the upcoming book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Blue-Chip Stocks to Buy for a Noisy Market * 5 Strong Buy Biotech Stocks for the Second Half * 6 Stocks Ready to Bounce on a Trade Deal Compare Brokers The post ACB Stock Is a Buy Because Aurora Cannabis Won't Get Left in the Dust appeared first on InvestorPlace.
Investors, meet Akerna (NASDAQ:KERN), the newest marijuana stock to hit the market. Akerna is fundamentally different from many other marijuana stocks in two important ways. One, it's a U.S. company, whereas most pot stocks are Canadian ventures. Secondly, Akerna isn't a cannabis producer; it's a cannabis-technology company.Given those novelties, investors have rushed into KERN stock to gain a different type of exposure to the continuous-growth cannabis market. That's why KERN stock has essentially tripled over the past two days.With that in mind, let's now rewind a bit. The legal cannabis industry is poised to grow more quickly than most other markets over the next decade. Investors want exposure to that market. Right now, because we are in the top of the first inning of the cannabis sector's growth, investors' potential exposure to the legal cannabis industry is largely limited to Canadian cannabis producers like Canopy Growth (NYSE:CGC), Cronos (NASDAQ:CRON), Aurora (NYSE:ACB), and Tilray (NASDAQ:TLRY). Simply put, the biggest players in the cannabis space are producers, and pot still isn't legal in all of the U.S.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * The 7 Best Dow Jones Stocks to Buy for the Rest of 2019 Against that backdrop, Akerna's plunge into the public market is very interesting. A U.S.-based, cannabis technology company, KERN is the first of its kind to go public. And, because investors desperately want diverse exposure to the cannabis market, KERN stock has been a home-run hit ever since making its Wall Street debut.How did Akerna make it to the public market? Will the hype of KERN stock continue? Most importantly, is Akerna stock worth buying today? Let's answer those questions and more by taking a deep look at KERN stock. What Does Akerna Do?Akerna is a very interesting company that uses big data and technology to develop products for cannabis producers.At present, Akerna is supported by two major businesses. One of those businesses is seed-to-sale technology, which allows regulators and government agencies to track cannabis products from their cultivation to their final sale. This is a very important technology. In fact, it's necessary. Seed-to-sale tracking is required by states such as Washington and California and will likely be mandatory for the global cannabis industry.KERN's other meaningful business is broadly dubbed enterprise resource planning, which essentially involves selling big-data-focused software to cannabis producers and pot-store operators. The software is supposed to help players in the cannabis industry better understand their market and customers, as well as reduce expenses, maximize profit, improve customer relationships, and increase yield.Overall, then, Akerna is a cannabis-tech company which sells important technology solutions to cannabis industry regulators, cannabis producers, and retail cannabis companies. KERN hopes to become the technology backbone of the entire cannabis industry.It's already well on its way to that goal. Akerna's systems are used in 29 of the 33 U.S. states in which cannabis is legal. How Did Akerna Get Here?As mentioned earlier, KERN stock is the first of its kind to go public. Not only is KERN a cannabis-tech company, but it's a U.S.-based cannabis-tech company.KERN stock plunged into the public market through a smart merger and some savvy legal maneuvers.The core of Akerna is MJ Freeway, which is a U.S. technology company that provides the cannabis software solutions described earlier. Importantly, MJ Freeway isn't a cannabis company. It's a cannabis technology company. Because MJ Freeway doesn't deal directly with marijuana, it was able to sidestep the legality question and go public with less complications than cannabis producers.Further, MJ Freeway skipped the whole lengthy IPO process. Instead, MJ Freeway merged with a special purpose acquisition company (dubbed SPAC in Wall Street lingo) that was already public. That SPAC was MTech Acquisition. Thus, through MJ Freeway's merger with MTech Acquisition, the IPO cleared all the legal hurdles, and the combined entity was dubbed Akerna.That happened on June 17. Ever since, KERN stock has essentially tripled. Where Is Akerna Going Next?KERN stock has been a huge hit on Wall Street, mostly because the stock offers investors unique exposure to a non-cyclical growth market, and is supported by a speculative but enticing long-term growth narrative which, in a best case scenario, ends with Akerna being the technology behemoth underlying the $200 billion-plus global cannabis industry.Does that mean it's time to buy KERN stock?No. KERN stock has a lot of potential. But all that potential isn't very certain to materialize and it lacks tangibility. The company reported just $10 million of revenue last year. That's next-to-nothing. To bridge the gap between that $10 million 2018 revenue base and a potential billion dollar revenue base in a decade, a lot needs to happen.At this point in time, that growth isn't visible. It's simply too early to declare Akerna stock a long-term winner in the cannabis-tech space.Over the next several months, KERN will be given the opportunity to more convincingly prove its leadership position and cement itself as a long-term cannabis-tech winner, much like Canopy Growth did in 2018 in cannabis production. If that happens, KERN stock will become worth buying. But, until then, the sidelines are the safest and smartest place to hang out when it comes to Akerna stock. The Bottom Line on KERN StockKERN is exciting because, as a U.S.-based cannabis-tech stock, it's the first of its kind. This novelty is what has propelled KERN stock to a 200% gain in just a few trading days.The long-term bull thesis on KERN stock is promising. But it also lacks visibility and tangibility, meaning that it's still too early to tell whether or not Akerna will turn into a cannabis-tech giant or a bust. As a result, until KERN's outlook becomes more visible and tangible, KERN stock should be avoided.As of this writing, Luke Lango was long CGC and ACB. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * The 7 Best Dow Jones Stocks to Buy for the Rest of 2019 * 5 Boring Stocks to Buy This Summer * 7 S&P 500 Stocks to Buy With Little Debt and Lots of Profits Compare Brokers The post Akerna Stock Offers Investors a New Way to Play the Cannabis Craze appeared first on InvestorPlace.
Tilray (NASDAQ:TLRY) CFO Mark Castaneda believes "only three or four large players" will control 80% of the global cannabis market with thousands of companies fighting for the remaining 20% market share. So, you can forget about the global cannabis market benefiting lots of different companies.Source: Shutterstock InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe question owners of TLRY stock have got to ask themselves at this point is whether the company has the right stuff to be one of the three or four companies controlling the global cannabis market or will it be relegated to a secondary role within the industry?Worldwide legal spending is forecast to be $40.6 billion in 2024, nearly three time the $14.9 billion estimated to be spent this year, according to Arcview Market Research and cannabis industry analysis firm BDS Analytics, which released its annual "State of the Legal Cannabis Markets" report on Thursday. It Doesn't Stand a ChanceI'm going to assume that Canopy Growth (NYSE:CGC) is sure to be one of those four major players in the global cannabis market. With its tentative $3.4 billion deal to buy Acreage Holdings (OTCMKTS:ACRGF) approved by both companies' shareholders, the fact that Tilray CEO Brendan Kennedy believes the U.S. federal government will legalize cannabis within three years suggests Canopy is getting one of the biggest U.S. producers at a very reasonable price. That leaves three other companies. Most investors would assume the winners to be listed in Canada or the U.S. I would tend to agree although you never know what the future will bring. * 7 Top-Rated Biotech Stocks to Invest In Today Currently, TLRY is the fourth-largest Canadian cannabis stock with a market cap of $4.4 billion, $900 million behind Cronos Group (NASDAQ:CRON) in the third position and $3.3 billion behind Aurora Cannabis (NYSE:ACB) in the second spot. This doesn't even take into consideration Aphria (NYSE:APHA) or Hexo (NYSEAmerican:HEXO) which are in fourth and fifth position by market cap, respectively. Of the top five, my favorites are Canopy, Cronos Group and Hexo with Aurora moving higher by the day and Tilray a distant fifth. Logic suggests that a couple of the four big players will come from outside North America. After all, it's a big world out there. Also, a few will likely be U.S. companies that are currently listed in Canada or privately held. One of those could be Acreage, which leaves just one other company to rule the world.At the moment, Curaleaf Holdings (OTCMKTS:CURLF) is the front runner. Operating in 12 states, the vertically integrated cannabis company is growing very quickly. In the March-ended first quarter, Curaleaf's revenue grew 288% year over year and 10% on a sequential basis to $35.3 million. By comparison, Tilray had first-quarter revenue of $23 million, 195% higher year over year. While it's still early in the game, Curaleaf is proving that the American cannabis players are building substantial businesses despite the fact the U.S. market is an incredibly fractured one where some states are legal, and others aren't. Therefore, let's say Canopy, Curaleaf, a cannabis company outside North America, and one more North American company make up the four that control 80% of the global cannabis market share.Is Tilray a better bet than Aurora, Cronos Group, or Hexo? That's debatable. It Will Be in the Top FourAlthough I'm skeptical that Tilray is one of the four cannabis companies that will rule the cannabis world, I do like some of its acquisitions. Take Manitoba Harvest. Tilray paid $316 million for the Manitoba-based producer of hemp-based products that sell in Costco (NASDAQ:COST) and Walmart (NYSE:WMT) and approximately 13,000 other points of sale in the U.S.Manitoba Harvest's 2018 revenues were CAD $94 million. Profitable, the acquisition added to Tilray's bottom line from day one, providing investors with an immediate return on invested capital, not to mention an improved profit-and-loss statement. * 5 Stocks to Buy for $20 or Less While it's not a flashy deal, Manitoba Harvest participates in one of the hottest markets (CBD-infused foods) in North America. As consumers realize that hemp-based products containing CBD can be just as effective as cannabis-based CBD products, Manitoba Harvest's business will see considerable growth. By diversifying its revenue streams, Tilray's CEO is laying the groundwork for a business that can compete in any economic climate. On June 10, Tilray struck a deal with Privateer Holdings, its largest shareholder with 77% of the outstanding stock, that will see the cannabis hedge fund gradually sell its stake to institutional investors over the next two years, removing a significant headwind to Tilray's stock moving higher. "Privateer is giving Tilray a lot of operational flexibility and obviously believes in long-term value of this business and is not pushing to sell its shares as soon as possible, so it's kind of mutually beneficial, this transaction, for both parties," Tilray Chief Financial Officer Mark Castaneda said in an interview.Now that short sellers have been effectively neutered with this transaction, Kennedy can worry about growing Tilray's business rather than worrying about the TLRY stock price.That's excellent news for Tilray shareholders. Is it enough to make it one of the front runners to rule the global cannabis market? No, it's not, but it does improve Tilray's chances slightly. Bottom Line on TLRY StockIt seems that all of the big cannabis companies have a few selling points that make them attractive, making it very difficult to handicap this race. Personally, I'd say Tilray won't be one of the handful of companies to rule the cannabis world, but we're still several years from crowning any winners. Until then, we're all just speculating. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Blue-Chip Stocks to Buy for a Noisy Market * 5 Strong Buy Biotech Stocks for the Second Half * 6 Stocks Ready to Bounce on a Trade Deal Compare Brokers The post When The Global Cannabis Shake-out Comes, Will Tilray Still Be A Leader? appeared first on InvestorPlace.
Aurora Cannabis (NYSE:ACB) faces a conundrum. The company continues to make key acquisitions. that have increased its production capacity. As a result, Aurora has become the largest producer of cannabis, but issues with ACB stock itself should make investors pause before buying the shares. Given the company's finances, investors might want to buy other marijuana stocks besides Aurora.In a recent article, I stated that the market has correctly given ACB stock a lower valuation than that of its peers. Its price-sales ratio of just above 61 lags that of Canopy Growth (NYSE:CGC), Tilray (NASDAQ:TLRY), and Cronos Group (NASDAQ:CRON). Aurora Is the Leading Producer of CannabisAurora has excelled in some areas. Its purchase of MedReLeaf raised its production capacity to an estimated level of 570,000 kg. That placed ACB ahead of the company seen as the industry leader, Canopy Growth. Some have also speculated that Aurora Cannabis will become the first company to reach the 1 million kg per year mark.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 6 Stocks Ready to Bounce on a Trade Deal Aurora also made a key move in the increasingly important Latin American market last year. In November, Aurora acquired Uruguay-based ICC Labs for around C$290 million ($216.7 million). That does not sound like a huge deal on the surface. However, it gives Aurora a 70% market share in Uruguay, the first country to fully legalize marijuana. Through the deal, Aurora also obtained licenses to produce medical marijuana in Colombia and export CBD products to Mexico. Strategic, Financial Issues Weigh on ACB StockUnfortunately, analysts have defined Aurora Cannabis stock by what the company has not done. Since it lacks a presence in the U.S. hemp industry or a partnership with a huge company, such as the one Canopy Growth has with Constellation Brands (NYSE:STZ), ACB stock has not commanded the premiums of its large peers.ACB stock is facing other problems. Other InvestorPlace columnists have pointed out that the company has a large amount of goodwill from various acquisitions. The company reported $3.177 billion of goodwill as of the last quarter. This constitutes a majority of the $5.55 billion of total assets on its balance sheet.The dilution of ACB stock also raises some red flags. The shares of Aurora stock outstanding have risen from about 129 million in 2016 to just over 1 billion today. That has kept its long-term debt at a relatively modest $418 million. However, the increased share count makes it much harder for Aurora to increase its earnings per share.The higher share count also makes it harder to profit from ACB stock. Do Not Invest in ACB Stock Because of Its "Number Two" StatusACB stock trades at about $7.50 per share as of the time of this writing. Despite this, traders tend to think of Aurora Cannabis as the second-largest marijuana company. In most cases, I agree with Jack Welch's strategy regarding second-place companies. When he was the head of GE (NYSE:GE), Welch preferred to buy the number one or number two company in an industry. However, after the massive dilution, Aurora stock is a second-place company I would rather avoid.In this sector, I see CGC as the stock of choice among the more prominent names. Alternatively, I would look to either Aphria (NYSE:APHA) or Hexo (NYSEAMERICAN:HEXO), two up-and-coming marijuana stocks which trade at lower valuations. Also, unlike ACB stock, analysts believe these two companies will earn a profit next year. Final Thoughts on ACB StockAurora Cannabis stock should be avoided. With its lead in production capacity and its dominance in Uruguay, I expect the company to survive. However, the stocks of companies that barely manage to survive usually don't rise.Unfortunately, ACB's fundamentals aren't strong enough to lift Aurora stock much. Both its balance sheet and the massive dilution of ACB stock give investors few reasons to have confidence in Aurora. Instead of buying ACB stock , traders would be better served by buying other firms in the cannabis space.As of this writing, Will Healy is long APHA stock. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Blue-Chip Stocks to Buy for a Noisy Market * 5 Strong Buy Biotech Stocks for the Second Half * 6 Stocks Ready to Bounce on a Trade Deal Compare Brokers The post Aurora's Strategic Decisions Make It Difficult to Profit From Aurora Stock appeared first on InvestorPlace.
According to Investor's Business Daily, Aurora Cannabis (NYSE:ACB) is the most widely held equity on Robinhood. That's the commission-free trading platform popular with millennials and Gen Z-ers.Source: Shutterstock So, does the fact that millennials and Gen Z-ers are bullish on ACB stock make it a buy?Here are arguments for and against this theory.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Millennial Ownership of ACB Stock Is a Big DealNo question, younger investors are going to be more open to investing in cannabis stocks. They're more familiar with the product itself and aren't nearly as concerned about the stereotypes surrounding its use.For example, the average age of Robinhood's six million users is 32, smack dab in the middle of the millennial generation. Specifically, this demographic includes those born between 1981 and 1996. * 7 Value Stocks to Buy for the Second Half Perhaps that's one reason why four of the top 20 stocks held by Robinhood users are cannabis stocks. The others are Cronos Group (NASDAQ:CRON), Canopy Growth (NYSE:CGC) and Hexo (NYSEAMERICAN:HEXO), ranked number six, 11, and 14, respectively.Interestingly, the latter three on Robinhood's list are my favorites. However, Aurora stock has piqued my curiosity recently.InvestorPlace feature writer James Brumley recently wrote a piece about ACB stock that highlighted the moves the company's making to diversify its holdings beyond Canada. Take for example its purchase of Uruguay-based ICC Labs in November.Aurora paid $290 million for the company which controls 70% of the Uruguayan recreational market. The deal also gives ACB access to other countries in Latin America. The longer-term potential there for Aurora Cannabis stock is readily apparent. With a combined population of more than 650 million, this is a very lucrative market.As Brumley wrote, the purchase of ICC Labs gives Aurora a platform for growth in Latin America.Millennials recognize Aurora's big-picture view of the cannabis industry. In their view, management's carefully selected bets on regions and companies enhances the profile of Aurora stock.At the end of the day, millennials understand pot, they aren't scared of it, and the growth potential they see excites them.For Aurora to be at the head of the class is excellent news for owners of ACB stock. Youthful Exuberance for Aurora Stock Is Also a RiskHere's the big problem with Aurora sitting on pole position for Robinhood's list: millennials may view the volatility of ACB stock and cannabis investments in general as a pathway to quick riches. You can't necessarily blame them, as the sector tends to move wildly on the smallest of news.Fortune recently reported on the millennials use of Robinhood. Not all of it was good.Financial planner Tara Falcone, founder of financial-wellness program provider ReisUP, suggested several reasons why Robinhood clients might be high on Aurora Cannabis stock and its ilk:"When you're talking about first getting into trades, you click on browse [on Robinhood] and one of the first things you see is the 100 most popular list," Falcone told Fortune. "To the untrained investor who has now decided to start buying individual stocks, thinking 'I haven't done any research on my own, what are other people investing in?'"The fact that Aurora Cannabis stock appears at the top of the list suggests a seal of approval. But as Falcone points out, that's not always the case.If you take another look at the list, you'll see that General Electric (NYSE:GE) and Ford (NYSE:F) are number two and three on Robinhood's list.Wall Street professionals would not consider these two as strong buys. The Bottom LineAs every day passes, I get more enthusiastic about Aurora stock. While I'm not entirely sold on its overall business, I appreciate its efforts to become a global player. This is a strategy that's right in line with Canopy Growth and some of the other large Canadian cannabis companies.And despite the negatives, at the end of the day, the fact that Robinhood users love ACB stock is further confirmation Aurora's making all the right moves.At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Value Stocks to Buy for the Second Half * 7 Hot Stocks to Buy for a Seemingly Sleepy Summer * 6 Chip Stocks Staring At Big Headwinds in 2019 Compare Brokers The post Robinhood's Users Love Aurora Stock: Should You? appeared first on InvestorPlace.
CGC analysts are estimating an EPS of -0.17 and revenues of $71 million. Shareholders are voting today on whether to acquire Acreage Holdings, which could propel CGC one way or the other.
Cronos Group Inc. (CRON.TO) (CRON.TO) (“Cronos Group” or the “Company”) reports that at its Annual Meeting of Shareholders on June 19, 2019 there were 610 shareholders voting in person or by proxy holding in total 261,290,314 common shares, representing 78.2% of the total number of common shares outstanding.
Canopy's stock is up 58% YTD, but all of this growth came in the first month of the year and the stock has struggled to maintain the levels it hit earlier this year.
The energy drink space may have a lesson for the budding cannabis industry, Bank of America Merrill Lynch says. While there was all kinds of buzz around energy drinks when Red Bull came along in 1997, ...
[Editor's Note: This story was previously published in February 2019. It has since been updated and republished.]The 2018 midterm elections made clear that Americans preferred legalization over the continued prohibition of pot, which should bolster the case for the top marijuana penny stocks.When residents in California voted for full recreational weed, it boded well not just for marijuana penny stocks, but for electoral momentum in other states and the midterms emphatically proved this point.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn conservative Utah and Missouri, voters approved medical cannabis. But Michigan stood above the rest, becoming the tenth state to legalize recreational marijuana. Significantly, it's also the first Midwestern state to approve such an initiative.Previously embattled marijuana stocks like Cronos Group (NASDAQ:CRON), Aurora Cannabis (NYSE:ACB) and Canopy Growth (NYSE:CGC) received a much-needed boost in the markets and really have capitalized on it.It's not difficult to understand why many investors believe in weed. Not only does legal marijuana open doors to a previously inaccessible sector, it has proven economic benefits. The commonly cited case study is Colorado. In 2015, one year after green lighting cannabis businesses, the botanical industry nearly hit $1 billion in revenue. In 2016, it breached the threshold, and growth remains strong. Considering that so many states suffer from budget shortfalls, a little green could go a long way.Plus, the sharp war of words and tariffs in U.S.-China trade relations amps up the case for marijuana penny stocks. Multiple industries, especially agriculture, are hurting. Full legalization provides an easy catalyst for economic activity and growth. * 7 High-Quality Cheap Stocks to Buy With $10 Under this backdrop, gambling on top marijuana penny stocks is more compelling than jumping on any other speculative venture. While risks abound, these four sector players offer considerable upside possibilities. Auxly Cannabis Group (CBWTF)A common difficulty in forecasting future price movements for top marijuana penny stocks is separating hype from reality. While almost every sector player advertises significant upside potential, most undercapitalized firms fail to deliver the goods.I had high hopes for Auxly Cannabis (OTCMKTS:CBWTF) last year due to its unique business structure. Auxly earned bragging rights for becoming the first cannabis streaming company.Energy and mining companies typically deploy the streaming model to gain full access to an industry's supply chain without incurring unnecessary risk. In theory, streaming is the way to go for marijuana-related organizations. Even with Canada's legalization initiative and U.S. electoral momentum, several legal and administrative hurdles exist. Streaming facilitates exposure to a lucrative industry, but with "stop gaps" should things go awry.Unfortunately, the markets have not been kind to Auxly stock. Since its January opener, shares have lost more than half their equity value.Nevertheless, I'm still hopeful that Auxly can pull it together. One of the major challenges for the company is that its streaming partners still encounter arguably unreasonable non-cannabis related obstacles. The biggest on the list is securing traditional financing, which stymies expansion efforts.However, the cannabis industry is making steady steps toward mainstream institutional acceptance. And especially with the U.S.-China trade war heating up, even conservative administrations can't afford overlooking a key revenue-maker. MPX Bioceutical (MPXEF)A common stereotype about legal-cannabis advocates is that they have ulterior motives for their product evangelism. Although that could be the case, one thing is undeniable: many, if not most top marijuana penny stocks focus on botany's medicinal aspect.This is especially true for MPX International (OTCMKTS:MPXOF). MPX operates three brands under its corporate umbrella: Salus BioPharma, Health for Life and its namesake MPX.The former two divisions specialize in medical-grade cannabis, while the latter caters to the green lifestyle. Salus is particularly intriguing as it represents a joint venture with Israeli pharmaceutical Panaxia to develop proprietary, smokeless cannabis products.Another compelling driver for MPXOF stock is its recent partnership with South Africa's First Growth Holdings. Primarily, this is an attractive deal because South Africa provides ample land and inexpensive labor. Moreover, the country recently legalized weed, so it provides MPX with global revenue synergies. Granted, management must make investments to ensure the higher-quality inventory which western connoisseurs desire. Nevertheless, the cost outlay should be very reasonable compared to other locales. * 7 Top-Rated Biotech Stocks to Invest In Today That's not to say you should jump on MPXOF stock without worries. The company isn't what you would consider fundamentally sound. Still, with relatively stable market performance and an impressive growth rate, speculators will want to keep close tabs on MPX. Supreme Cannabis Company (SPRWF)When Canada became the first G7 nation to approve recreational weed in October 2018, it actually forged the path forward for marijuana startups. As a result, the lion's share of marijuana penny stocks is based in Canada.A prime example is Supreme Cannabis Company (OTCMKTS:SPRWF). Supreme Cannabis, whose 7ACRES brand of medical-grade cannabis started life as a father seeking alternative therapies for his daughter.Eventually, 7ACRES grew to become a gold-standard cannabis facility, offering distinct, high-quality strains.What makes SPRWF stand out compared to other top marijuana penny stocks is that management is focused on a business-to-business (B2B) strategy. This enables the company to fine-tune its craft, rather than dilute its effectiveness through disparate supply-chain segments.Over the long run, I think this higher-end focus will distinguish SPRWF stock from the competition. For example, several mainstream retail stores, including Neiman Marcus and Vitamin Shoppe (NYSE:VSI), have pushed for cannabidiol, or CBD, products.Obviously, that's a big plus for the broader marijuana industry. But just selling bottom-shelf weed at large volume isn't going to cut it. Consumers want differentiation, which is what Supreme Cannabis offers. Therefore, SPRWF stock has a chance to positively surprise.That said, this is a very volatile market. SPRWF stock is a high-risk, high-reward venture, but a very tempting one due to positive industry-related developments. Cannabis Science (CBIS)Cannabis Science (OTCMKTS:CBIS) is easily one of the most speculative among top marijuana penny stocks. Immediately, you can tell that through either its ridiculously low share price, or its sub-$100 million market capitalization.Another giveaway is Cannabis Science's bold declaration to provide innovative therapies for unmet medical needs, including cancer. As the old saying goes, extraordinary claims require extraordinary evidence.But this is also where CBIS stock becomes interesting. Management claims that cannabis use dates back thousands of years, making it one of the most tried-and-true medicines. Plus, traditional pharmaceutical companies have become more a marketing machine than a therapy provider. Therefore, the medical-cannabis industry deserves at least some credibility.Also, I think it's fair to point out that the opioid crisis has caused mainstream pharmaceuticals to lose credibility. Despite best intentions, the pharmaceutical industry has left a wave of problems in its wake. This could negatively impact generations of Americans. Thus, marijuana penny stocks related to medical cannabis could benefit.That's the good news for CBIS stock. The not so great news is that shares continue to struggle. * 7 U.S. Stocks to Buy With Limited Trade War Exposure Conservative investors should probably stay away from Cannabis Science and marijuana penny stocks in general. But if you're a speculator, CBIS stock appears to have bottomed after a recent bout of volatility. It's no guarantee of upside, but it might be worth a shot with gambling money.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 5 Red-Hot IPO Stocks to Buy for the Long Run * 5 Stocks to Buy for $20 or Less * 4 Dow Jones Stocks Ready to Rise Compare Brokers The post 4 Top Marijuana Penny Stocks to Take Seriously in 2019 appeared first on InvestorPlace.
Hexo (NYSE:HEXO) reported third-quarter earnings Thursday before the bell. The Quebec-based cannabis company's revenues missed analysts' estimate by a wide margin and even declined versus Q2, causing HEXO stock to plunge on both Thursday and Friday.Still, while this report might have scared investors, it does not appear to have affected the overall trajectory of Hexo Corp. HEXO Fell on a Massive Revenue MissThe HEXO stock price fell by another 5% on Friday. That came on top of an 8.5% decline on Thursday, as the fallout from the sequential revenue decline sent HEXO stock price plunging.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 5 Stocks to Buy for $20 or Less For Q3, analysts, on average, had expected a loss of 5 cents per share. The company reported a loss of 4 cents per share, coming in ahead of estimates. However, its revenue of C$13 million was well short of the C$14.8 million analysts, on average, had expected.But HEXO's sales soared more than tenfold from the C$1.2 million of revenue it reported in the same quarter a year earlier. However, its $400,000 sequential revenue decline may have further dampened traders' view on HEXO stock. HEXO Is Still Poised for Robust GrowthUp to this point, HEXO had begun to develop a reputation as a sleeper play in this industry. It does not garner the attention that is devoted to Canopy Growth (NYSE:CGC), Aurora Cannabis (NYSE:ACB), Tilray (NASDAQ:TLRY), or Cronos Group (NASDAQ:CRON).However, its home province of Quebec is Canada's second-largest. In this province of about 8.4 million people, HEXO controls more than 30% of the cannabis market. It has been able to be so successful in large part because of a supply deal it made to bring 200,000 kg of cannabis to the province over five years.Meanwhile, HEXO recently agreed to buy Newstrike Brands (OTCMKTS:NWKRF). The deal increases HEXO's production space by 470,000 sf. That gives the company enough capacity to produce 150,000 kg of cannabis per year. HEXO also wants to enter the edibles and beverage markets. In the beverage space, it has partnered with Molson Coors (NYSE:TAP).On top of that, though analysts expect HEXO to post a 17 cent per share loss this year, they expect its EPS to rise to positive 11 cents next year. Also, notwithstanding the quarterly report, its revenues appear robust. The company only brought in C$4.93 million last year. However, for fiscal 2019, analysts' consensus revenue estimates rise to C$62.62 million. In 2020, analysts expect its revenue to reach C$319.4 million. This triple-digit growth may turn Thursday's results into an anomaly Wall Street will soon forget. Should Investors Buy HEXO Stock?In fairness, most of HEXO's marijuana stock peers also sold off on the news. Hexo's report could have left many with second thoughts about the industry's lofty valuations. Still, I see the decline of HEXO stock price as an overreaction. Its sequential revenue decline does nothing to undermine the longer-term case for HEXO stock.For this reason, I think investors should still be bullish on HEXO. Its revenue decline might have blindsided Wall Street. However, by focusing on that revenue number, investors apparently ignored an acquisition that will dramatically increase both the company's production capacity and its reach in its home country.Moreover, HEXO has attracted an ally in Molson Coors that can give the company the financial muscle and marketing knowledge it needs to launch cannabis-based beverages. Additionally, its lucrative supply agreement in its home province has bolstered its position in edibles and other markets. Given its growth potential, investors should add to their positions in HEXO, instead of selling HEXO stock.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 5 Red-Hot IPO Stocks to Buy for the Long Run * 5 Stocks to Buy for $20 or Less * 4 Dow Jones Stocks Ready to Rise Compare Brokers The post Hexo Stock Remains Attractive Despite Revenue Miss appeared first on InvestorPlace.
Marijuana stocks seem a bit wobbly at the moment and Canopy Growth (NYSE:CGC) is no exception. The CGC stock price hasn't tanked, to be sure. Shares in fact still are up a healthy 53% in 2019. But the gains came early. Since late April, Canopy has dropped over 20%.Source: Shutterstock Canopy Growth earnings on Thursday will provide an opportunity to reverse the recent trend. That's true not just for Canopy Growth stock but for the marijuana sector as a whole.The trend in the CGC stock price mirrors that of other widely held pot plays. Investor patience seems a bit thin. Valuations, even with modest declines, remain sky-high. And sector-wide earnings of late haven't been close to good enough.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIf Canopy -- the industry's largest player -- can't deliver, investors are going to wonder who can. And that suggests that the rest of the sector could follow Canopy stock downward. Expectations for Canopy EarningsAnalysts are expecting Canopy Growth to post a reasonably large loss in its fiscal fourth quarter. The current consensus estimate is for a loss of 24 cents CAD per share. * 7 Top-Rated Biotech Stocks to Invest In Today That figure isn't all that meaningful for two reasons. First, the reported figure likely isn't going to be close to that average. Canopy's net income is impacted by changes in fair value of its convertible debt and warrants owned in smaller cannabis companies. In Q3, for instance, Canopy actually reported a large net profit thanks to those accounting effects.Secondly, investors aren't really going to care about profits. Canopy, adjusting for one-time and accounting effects, is going to lose more money than it did a year ago. Since last year's fourth quarter, Canopy has acquired retail chain Hiku, which is not yet profitable. It has invested heavily in production and processing capabilities.These are investments Canopy has to make, decisions that shareholders generally support. There's no point in raising roughly $4 billion from Constellation Brands (NYSE:STZ, NYSE:STZ.B) if the money isn't going to be spent. Canopy has a head start on the industry, and it needs to keep spending to maintain that lead. That's actually the bull case for CGC stock, as I've detailed previously.Rather, investors are going to focus on revenue, pure and simple. Analysts expect revenue to increase 314% year-over-year. There will be some help from Hiku and other acquisitions in that growth but Canopy sales are going to soar. The question for Canopy Growth stock and for the sector will be if they climb high enough. Bad Omens for Canopy Growth StockThe concern for owners of CGC stock heading into earnings is that big growth from other pot plays haven't been big enough. Hexo (NYSEAMERICAN:HEXO) increased revenue nine-fold in its fiscal Q3. HEXO stock fell 13% in the next two sessions after reporting those earnings last week.Cronos (NASDAQ:CRON) earnings last month looked disappointing, though CRON shares have mostly held up. In April, Aphria (NYSE:APHA) stock tanked on an earnings miss with sales up over 500% YOY. Tilray (NASDAQ:TLRY) did a little better, yet its earnings last month largely failed to arrest its equity's long decline. Admittedly, TLRY shares looked awfully bubbly last year.Among the most widely held marijuana stocks, there hasn't been a recent earnings report that investors have truly cheered. And so investors betting on an increase in the CGC stock price next week are betting against the trend. Not Just the CGC Stock PriceThat string of poorly (or at least coolly) received earnings reports is why Canopy earnings are so important to the sector. There simply hasn't been much good news. Sales in Canada aren't growing, though supply constraints are an issue. Movement in the U.S. has been essentially nonexistent since the farm bill was passed in December.From a short-term standpoint, then, Canopy earnings are the last major catalyst for the sector for some time. We're probably talking close to two months. In a broad market that seems a little prone to panic and subsequent profit-taking, that's a potential problem.Therefore, Canopy earnings need to be -- and will be -- watched closely by the entire industry. If Canopy Growth stock sells off on Friday after Thursday evening's report, it's unlikely to be the only one to do so.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * The 7 Best Tech Stocks to Buy for the Second Half of 2019 * 7 Top-Rated Biotech Stocks to Invest In Today * 4 Semiconductor Stocks to Sell Compare Brokers The post Earnings Will Be Huge for Canopy Growth and Marijuana Stocks appeared first on InvestorPlace.
Shares of Cronos Group (NASDAQ: CRON) are starting to stabilize. After its weak first-quarter revenue report reminded investors that Cronos stock was very expensive, speculators are buying the shares once again. Why?Cronos has a $7.9 billion market cap but with its quarterly revenue of CAD $6.5 million (USD ~ $5 million or $20 million annualized), the company trades at 154 times sales.InvestorPlace - Stock Market News, Stock Advice & Trading TipsCronos has no room to report any signs of slowing revenue growth in the near-term. It must continue winning supply deals to grow market share. And on May 14, it did just that. The company inked a $30 million multi-year supply deal with MediPharm Labs over 18 months.The deal could optionally extend to $60 million over 24 months. Cronos will secure MediPharm's private label supply of concentrates, after processing Cronos' dry cannabis.The supply deal validates Altria's (NYSE: MO) $1.8 billion investment in Cronos. By outsourcing the process to a secondary player, Cronos may put Altria's cash to better use. Altria outsources its own tobacco production to thousands of farmers and probably advised Cronos to do the same. * 7 Top-Rated Biotech Stocks to Invest In Today Instead of spending all of its resources on building up production facilities, it could land additional partnership deals while sharing risks with them. Cronos is bullish on its partnerships, especially with its work with Ginkgo.In the September 2018 press release, Cronos said, "The landmark partnership between Cronos Group and Ginkgo will leverage the expertise of both organizations to solve this challenge and make more accessible the benefits of cannabinoids in an economically sustainable way."Since then, Ginkgo met its targets, triggering milestone payments. Ginkgo is a leader in synthetic biology, giving Cronos an advantage over the competition as the science works eventually bring meaningful results. Mixed First-Quarter Results and Cronos StockIn the first quarter, ASP (average selling price) rose 7% to $5.73 due to higher revenue from CBD oil. Operating expenses also rose 12%, as Cronos incurred professional fees for services related to its strategic initiatives.Despite the mixed numbers in the period, Cronos enjoys massive cash levels on its balance sheet that negates any investor worry over quarterly results. Altria's backing puts Cronos in a better position to capture opportunities that arise and to accelerate its strategic initiatives.Cronos has four strategic goals. It is establishing a global production footprint, developing a diversified global sales and distribution network, creating disruptive intellectual property, and growing a portfolio of products that resonates with consumers.Since January 2019, Cronos secured listings with a number of private retailers in Canada and in the province of Ontario, British Columbia, Nova Scotia, and Prince Edward Island. Collectively, those five provinces represent 58% of the Canadian population. Cronos Putting Altria Cash to WorkCronos plans to increase its capital investments to support an increase in production. The company expects Peace Naturals ramping up production through the course of 2019. The company has partnerships with companies in Israel, where it is developing a vapor product.Cronos will have additional production capacity ready in the upcoming second half of the year. It had around 1000 kilos of capacity in the first quarter and aims to have 40,000 kilos next. Getting production to that level will depend on how regulations change. Cronos is scaling up output depending on product demand levels, and demand is a function of regulatory changes that open up the market opportunity. Cronos had over $2 billion on its balance sheet in Q1 but is demonstrating restraint in the way it spends that cash. The Bottom Line on Cronos StockCronos is not profitable yet and its market size is still unknown. Though the company is still losing money, its nearly $2 billion cash balance gives the company plenty of M&A opportunities. Analysts are bullish on the company and have an average price of $28.50 on Cronos stock.Disclosure: As of this writing, the author did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * The 7 Best Tech Stocks to Buy for the Second Half of 2019 * 7 Top-Rated Biotech Stocks to Invest In Today * 4 Semiconductor Stocks to Sell Compare Brokers The post After a Bumpy Few Months, Cronos Stock Is Back on the Move appeared first on InvestorPlace.
Akerna, a company that provides compliance software to the cannabis industry, headed to the Nasdaq today under the ticker KERN and the backing of an early Facebook investor. Yahoo Finance's Dan Roberts, Heidi Chung and Myles Udland speak to Akerna CEO Jessica Billingsley.