|Bid||31.50 x 1100|
|Ask||31.81 x 800|
|Day's Range||31.55 - 31.95|
|52 Week Range||23.01 - 45.40|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||2.27|
|Expense Ratio (net)||0.75%|
After recreational marijuana sales were legalized last year, Canopy Growth Corp.’s pot sales jumped 360%. When the world’s largest pot company reports a fresher crop of results this week, that number may be less than 40%.
Cannabis stocks rose Tuesday, buoyed by gains in the broader market and hopes for a bill that would block the Justice Department from interfering in states that have legalized weed for medical or recreational use.
Previous generations witnessed the rise of great sailing ships, steam engines, automobiles, mass production, commercial flight, radio, telephone and television and space travel. The American dream, idyllically portrayed by Norman Rockwell, transitioned from being a company man to one’s own man. When Humpty Dumpty illegality tumbles, opportunities for wealth will grow, mirroring America’s other regulated industries, including energy, telecom, transportation, media, pharmaceuticals, tobacco and alcohol.
A congressional committee is slated on Tuesday afternoon to consider an amendment aimed at protecting state-approved cannabis programs from federal interference. Need more cannabis news? The amendment, by Rep. Earl Blumenauer, Democrat of Oregon, and California Republican Tom McClintock would only protect states from U.S. Justice Department interference over their cannabis programs for a year, because spending bills have to be reauthorized each year.
Aurora Cannabis (ACB) has been under downward pressure lately, primarily because of the broader market becoming increasingly risk averse because of the uncertainty surrounding the trade wars and saber-rattling in the Middle East.This has caused a lot of investors to move their capital into what they perceive as safer places to park their money, which has resulted in the cannabis sector as a whole losing value and overall positive sentiment, which has had an effect on the share price of Aurora Cannabis, even though it still remains up over 50 percent on the year.There is no doubt the stock will rebound from this, and one of the key catalysts that will be part of that is the upcoming legalization in Canada of CBD edibles, extracts, beverages and topicals in the latter part of 2019.Combined with its rapidly increasing production capacity, the company is positioned well to boost sales as a result of these changes.Strong demand for alternative consumptionIn the short term Aurora Cannabis is going to get a nice boost from recreational pot sales in Canada, as last quarter it accounted for a little over 50 percent of the company's overall sales. I anticipate that becoming a larger percentage of sales over the three quarters at least, before it probably starts leveling off again as recreational pot supply meets demand in Canada.Over the long term it'll be more beneficial for Aurora to reduce its exposure to low-margin recreational pot, but for now, it's an important part of its growth narrative.The good news in that regard is edibles, extracts and topicals, because of their demand and popularity, generate wider margins than dried flower. That means not only higher revenue, but also better margins and earnings.Barring any unforeseen events, this should become legal in October. Assuming the supply chain issues that have emerged after recreational pot was legalized in Canada aren't part of the next stage of legalization, it should provide a nice boost to the last quarter for Aurora, which is already projected to significantly boost sales in the second half of the calendar year. This won't come from sales, which won't be allowed until 60 days after the legalization on October 17, rather it'll come from an improvement in investor sentiment, as they look forward to the impact in 2020.That said, the initial practical boost concerning the performance of Aurora from the legalization of edibles and other means of pot consumption will be in the first calendar quarter of 2020.ConclusionAurora Cannabis will have about an annual run rate of 625,000 kilograms in the first half of 2020, making it easily the leading cannabis producer in the world. From the point of view of supply, it will be more than able to meet any demand from the markets it competes in.There has been some concern about what Aurora will do if its supply exceeds demand in all the markets it competes in. Under that scenario it would have to find a way to sell or use its excess product. I'm not yet convinced it's going to be an issue because it will use some of its pot for extraction; not all of it is being produced for immediate sale.Another thing to take into account is Aurora's production scale will continue to lower its market-leading cost per gram, which should bring it to profitability before the end of 2019.Add to that the increase in margins from Canada legalizing CBD edibles, extracts, beverages and topicals in 2019, and being a big part of its revenue and earnings in 2020, and it's easy to see the key catalyst this will be going forward for Aurora.It's one of many reasons I remain a short and long-term bull on the company.To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here. Disclosure: The author is Long ACB.Read more on ACB: * Market Delays Can Derail Aurora Cannabis (ACB) Stock * Will Aurora Cannabis Be Impacted by Low-Cost Latin Competitors? * Aurora Cannabis (ACB) Stock Gets Caution Flags * This Dip in Aurora Cannabis (ACB) Stock Is a Buying Opportunity More recent articles from Smarter Analyst: * Stay Away from Cresco Labs Stock Until the Smoke Clears * Market Delays Can Derail Aurora Cannabis (ACB) Stock * Can Aurora Cannabis (ACB) Stock Set Up for Another Breakout? * Village Farms (VFF) Has a Lot Going for It
Cannabis stocks are mixed, with market leader Canopy Growth Corp. gaining after it announced its latest growth moves ahead of Wednesday’s shareholder vote on its proposal to acquire Acreage Holdings.
A recent study focused on cannabis usage amongst older adults revealed noteworthy findings — mostly because the largest increase in cannabis usage was the older adult generation (baby boomers). It was even found that older cannabis consumers used the alternative medicine at least one hundred days out of the whole year. In addition, the majority of older cannabis consumers reported using the plant for medicinal reasons rather than for recreational usage.
Cannabis stock traded broadly lower Friday, putting the sector on track for a fourth-straight loss, as Hexo Corp. shares extended losses toward a 3-month low in the wake of disappointing quarterly results. The ETFMG Alternative Harvest ETF dropped 2.1%, as 31 of 38 components sold off, and the Horizons U.S. Marijuana Index ETF shed 3.2%. The ETFMG ETF has now lost 5.2% over the past four sessions. Among the sector's more-active components, shares of Hexo Corp. dropped 4.1%, after losing 8.8% on Thursday, to put them on track for the lowest close since March 12. Elsewhere, shares of Aurora Cannabis Inc. inched up 0.1%, after losing 4.7% over the past three days; Cronos Group Inc. dropped 5.7%; Aphria Inc. shed 2.0%; and Canopy Growth Corp. declined 2.0%. The ETFMG ETF has now shed 15% over the past three months while the S&P 500 has gained 2.7%.
It turns out that, like most other companies in the U.S. cannabis industry, CannaCraft was producing a lot of plastic waste. Prior to receiving this certification, the 2 million vape cartridges produced by CannaCraft annually were packaged in plastic, child-resistant tubes to comply with cannabis packaging regulations in California.
A word to states considering marijuana legalization: If you approve using the green plant, you’ll receive green back. Since Colorado adult-use cannabis program begin in 2014, the state has generated more than $6 billion in marijuana sales, according to the Colorado Department of Revenue. To be exact, Colorado has seen $6.56 billion in marijuana sales as of last month.
HEXO (HEXO) is trading down big after putting up a quarter where net revenues declined from the previous quarter. The company is still in the transition phase from ramping up cultivation capacity to getting the product on market.The cannabis company remains on track for a big breakout year in FY20 so any stock weakness following FQ3’19 results is likely a buying opportunity. The stock market has moved to the phase of where investors want to see a big jump in actual cannabis results and HEXO won’t start providing those numbers for another quarter or two.Focus On CatalystsHEXO reported that net revenues decreased to C$13.0 million for the period ending April 30 from C$13.4 million in the January quarter. The big key to the revenue dip was the drop in the average gross selling price for adult-use dried grams to C$5.29 from C$5.83.The roughly 9% dip in selling prices made a huge impact because HEXO is still in the process of ramping up cannabis production. The company only sold a fraction more dried cannabis equivalents in the quarter, but the production levels nearly doubled to 9,804 kg. The time to market will always cause harvests to show up in sales for the following quarter.With the completion of the Newstrike Brands deal on May 24, HEXO is now on pace for 150.000 kg of annual production. The company still needs to grow quarterly production by another 270% in order to reach full capacity.The company only sold 2,904 kg of cannabis equivalents in the quarter leaving a greater than 10-fold increase in sales within the next year or so. HEXO just completing their first harvest in their expanded 1 million sq. ft. facility.The only major negative with the quarter and the current plan is that the company has a weak medical cannabis business. The quarter continued to see flat kg sold in the 150 range despite stable average selling prices of over C$9 per gram.HEXO saw a substantial boost in operating expenses going from C$4.6 million last April to C15.9 million this quarter. The end result was an adjusted operating loss in the C$10.0 million range. The C$10.0 million synergies from the Newstrike Brands acquisition combined with improved efficiencies should get the company back into the black.Big Target The Canadian cannabis company continues to forecast a FY20 revenue target of C$400 million or about $300 million. A big part of the plan is to use the Newstrike Brands business along with a hemp supply agreement for 200,000 kg of hemp to sell CBD products such as edibles in Canada and other products in eight U.S. states in 2020.HEXO recently hired the past CFO of Nutrisystem to focus on the U.S. based financials showing the importance of the U.S. market to future growth.The two-pronged growth path and the move to get away from pure farming via the hemp supply agreements should improve margins next year. The company will grow quarterly net revenues from slightly above C$10 million to around C$100 million per quarter in the matter of a few months from now with the next fiscal year starting on August 1.TakeawayThe key investor takeaway is that HEXO remains on track for a huge year in FY20. The market is likely underwhelmed by the FQ3’19 revenue dip, but the investors paying attention will see the opportunity to own the stock on any weakness.After the current quarter that ends in July, HEXO is lined up to generate sequential revenue gains in excess of C$20 million. With a market value close to $1.5 billion, the stock should find support in the $6 range.To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here. Read more on HEXO: * Analyst Puts the “Hex” on Hexo Stock Ahead of Earnings * Cannabis Stock Hexo Can Go a Bit Higher Here, but Caution Is Warranted * The Cannabis ‘Magic Bus’ Is About to Leave the Station! Next Stops? Hexo * Cannabis Stock Hexo: The Cheapest Way to Invest in a Giant Market for Marijuana? More recent articles from Smarter Analyst: * Stay Away from Cresco Labs Stock Until the Smoke Clears * Can Aurora Cannabis (ACB) Stock Set Up for Another Breakout? * Hexo Stock: When the Bulls Aren't Bullish Enough * Village Farms (VFF) Has a Lot Going for It
Per the SEC filing, the fund will track the Solactive AG’s Marijuana Index, which will incorporate holdings that meet certain cannabis industry requirements. “In order to be eligible for inclusion in the Underlying Index, a company is considered by the Index Provider to be a Marijuana Company if it derives at least 50% of its revenue, operating income, or assets from the marijuana industry value chain,” according to the SEC filing. “If a company grows, produces, distributes, or sells marijuana, products derived from marijuana or synthetic versions of marijuana, it cannot perform any such activity in any country, state, province, locality or other political subdivision where this activity is illegal under applicable law,” the filing noted further.
Huawei Strikes Back…Against Verizon Chinese Telecom Huawei, pretty upset about President Trump’s sanctions against the company that have led to Alphabet (NASDAQ:GOOGL) banning the company from using its Android operating system for its phones among other things, is striking back by insisting that Verizon (NYSE:VZ) pay it $1 billion in licensing fees for 230 patents […]The post Market Morning: Huawei Strikes Back, 'No' on No No Deal, Ancient Chinese Stoners, Crowded CrowdStrike appeared first on Market Exclusive.
The U.S.-listed shares of Hexo Corp. slipped 0.5% in premarket trade Thursday, after the Canada-based consumer packaged goods cannabis company reported narrower than expected fiscal third-quarter loss but net revenue that came up short. The net loss for the quarter to April 30 was C$7.75 million ($5.82 million), or 4 cents a share, after a loss of C$1.97 million, or 1 cent a share, in the year-ago period. The FactSet consensus was for a loss of 5 cents. Net revenue jumped to C$13.02 million from C$1.24 million, below the FactSet net sales consensus of C$14.8 million. Average gross selling price of adult-use dried gram and gram equivalents was C$5.29 as of April 30, down from C$5.83 at the end of January, while kilograms sold of adult use grew to 2,759 from 2,537. Average gross selling price of medical dried gram and gram equivalents slipped to C$9.11 from C$9.15 while kilograms sold declined to 145 from 152. Separately, Hexo said its affiliate Hexo Med S.A. affiliate has received a medical cannabis installation licence from the Greek government which allows Hexo to establish cultivation, processing and manufacturing facilities in Greece. Hexo's stock has rocketed 88% year to date through Wednesday, while the ETFMG Alternative Harvest ETF has climbed 30% and the S&P 500 has gained 15%.
Back in February, I introduced you to a company called Halo Labs (OTC: AGEEF). This is an Oregon-based manufacturer of cannabis oils and concentrates where it boasts about 20 percent of the Oregon concentrates wholesale market, and has done more than $25 million in revenue. Following its expansion into California and Nevada, Halo has tripled revenues.
Shares of Neptune Wellness Solutions Inc. shot up 11% toward a record high in premarket trade Wednesday, after the Canada-based extraction and purification company announced a 3-year agreement with cannabis company Green Organic Dutchman Holdings Ltd. . Under terms of the agreement, Green Organic will supply more than 230,000 kilograms of cannabis and hemp biomass to Neptune, which will extract and purify cannabinoids and terpenes, to be transformed into organic finished products. The first shipment of biomass is expected to be received in September 2019. The deal comes less than a week after Neptune announced a 3-year extraction and purification agreement with cannabis company Tilray Inc. , that sent Neptune's stock to a record close on Friday. Neptune's stock has rallied 39.3% over the past three months while Green Organic shares have shed 20.5%, the ETFMG Alternative Harvest ETF has lost 11.0% and the S&P 500 has gained 3.4%.
The cannabis sector traded mostly lower Tuesday, with the ETFMG Alternative Harvest ETF down 1.0% as 24 of 38 components traded lower. The Horizons Marijuana Life Sciences Index ETF dropped 1.4%, with 43 of 57 components falling. The declines come the ETFMG ETF gained 4.6% and the Horizons ETF advanced 5.5% over the past two sessions, while the S&P 500 tacked on 1.5%. Among some of the more-active pot stocks, Aurora Cannabis Inc. fell 2.6%, Canopy Growth Corp. shed 2.1%, Cronos Group Inc. gave up 2.5%, Tilray Inc. slumped 5.3% and Canopy Rivers Inc. lost 1.4%. The ETFMG ETF has now lost 10.3% over the past three months, while the S&P 500 has gained 3.7%.
Ahead of Canada legalizing recreational marijuana, excitement was high around the industry about the country emerging as a world cannabis leader. As one of only two countries with legal adult-use weed — Uruguay being the other — Canada has had every advantage to building its lead as a leader in research, business, and more. Neil Selfe, the INFOR Financial Group Inc. founder and CEO, told Bloomberg Canada “blew it” with regard to legalization, thanks to severe provincial and marketing regulations placed on the industry, as well as lacking innovative approaches to policy.
The recent acquisition by AgraFlora Organics (PUFXF) of Organic Flower Investments Group could be the catalyst the company needs to drive long-term revenue growth. The transaction was closed on June 7, 2019.While AgraFlora has had a clear path to significant increase in its production capacity - reaching approximately 250,000 kilograms a year when fully operational - it has been less clear how it would sell its growing inventory, and to whom.With Organic Flower Investments Group, it looks like it could have found the answer, as it not only gets the remaining 20 percent interest in the giant Delta Greenhouse Complex, but more importantly, it secures access to the all-important European cannabis market, and entry into a number of cannabis segments that have the potential for significant growth.This should be a strong complementary growth opportunity to its agreements with Namaste Technologies and ICC International Cannabis Corp. With Namaste, it secured a deal in the latter part of 2018 for up to 25,000 kilograms in sales of premium dried cannabis flower on an annual basis. For ICC International Cannabis Corp., the deal consists of the company being able to buy up to 20 million grams of premium dried cannabis flower annually over a period of five years.International opportunityOrganic Flower already has EU-GMP cannabis processing capabilities in place, providing AgraFlora with an enormous opportunity to leverage its growing production at the international level. This reduces its risk associated with heavy exposure to the Canadian recreational pot market.Investors in Canadian companies need to understand that recreational pot, while important for revenue at this stage of the industry growth, is limited on its upside potential over the long term, and because of lower prices, results in low margins and downward pressure on earnings.For AgraFlora, that is more of a challenge because it primarily competing in the wholesale side of the recreational pot market. It should do okay in the near term, but further out it will have to find alternative cannabis markets if it wants to produce consistent profits in the years ahead.For that reason, having immediate access to the European market is a great opportunity for it to sell in a higher margin market. Cannabis prices in the EU are generally higher than in North America. The company says that in the EU it plans on expanding into the retail distribution market for dried cannabis going forward.Included in its distribution and GMP cannabis processing/finishing agreements are about 80,000 retail outlets, including pharmacies, located in 16 countries.Food and beverage cannabis segmentsAnother benefit of the deal is the exposure the company has to products like beers, ciders, bottling performance products, beverages, candy, chocolates, and various edibles.One of the more interesting aspects of these ancillary businesses is Candy, Chocolate & Edibles. There are development plans in place to build a 50,000 sq. ft. "manufacturing and product formulation facility" in Winnipeg, Manitoba. The facility will be able to produce CBD products for adult, medical and functional use.When fully operational, the company says it should be able to generate over $750 million in annual sales.The other segments include exclusive supply, manufacturing and distribution agreements and partnerships that should provide significant revenue streams as they expand and mature.In cosmetics, there is a proposed acquisition of Canutra Naturals Ltd, a Canadian-based cosmetics/topicals manufacturing company. Included in this deal would be an industrial hemp license, co-packing agreements, and a cannabis research license from Health Canada.There are other valuable assets that come with Organic Flower, but these will probably have the most impact on the performance of the company in the near term.ConclusionAgraFlora has struggled to attract a lot of investors so far, primarily I believe, because of a weak management team being in place. Not too long ago the company addressed that problem, and hired Brandon Boddy to be Chairman and Chief Executive Officer. He was the co-founder of Auxly Cannabis Group Inc., formerly Cannabis Wheaton Income Corp. That should improve investor sentiment for the company.With the projected production capacity of 250,000 kilograms a year, and the addition of numerous ways to leverage its supply via different segments and international markets, AgraFlora could be one of the most undervalued publicly traded cannabis stocks.It underscores the value that comes with a lot of production capacity, as it attracts a variety of companies that aren't able to generate enough supply for the markets they serve.With the management change, rising production capacity, and access to international markets and industry verticals, AgraFlora has rapidly transitioned from a dried flower, recreational cannabis play to one that can compete in more profitable segments.It still has a lot of exposure to recreational pot, and that is a short-term risk, but over time it appears it has the pieces in place to grow revenue and earnings in the years ahead. I would recommend at least on your watch list and follow it progress closely. I think once the general market becomes aware of this sleepy stock, it could start to take off.To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here. More recent articles from Smarter Analyst: * Stay Away from Cresco Labs Stock Until the Smoke Clears * Can Aurora Cannabis (ACB) Stock Set Up for Another Breakout? * Village Farms (VFF) Has a Lot Going for It * Hexo Has Difficult Days Ahead, Analyst Says
Global X is looking to roll out a cannabis exchange traded fund of its own. A recent filing with the Securities and Exchange Commission (SEC) provides details about the Global X Marijuana ETF. That ETF ...
Global X, one of the largest purveyors of thematic exchange traded funds, is looking to add that lineup with a cannabis ETF. Assuming the new ETF comes to market, it will track the Marijuana Index, which is provided by Solactive AG. Solactive provides indexes for several other Global X funds.
Rep. Alexandria Ocasio-Cortez (D-NY) has already aligned herself with cannabis reform, but now she’s pushing forward legislation that would make it easier for scientists to study the medical efficacy of psychedelics. Ocasio-Cortez’s measure would lift a barrier that many researchers claim makes it unnecessarily restrictive to analyze the medical benefits of psilocybin mushrooms, MDMA, and other drugs. “From the opioid crisis to psilocybin’s potential w/ PTSD, it’s well past time we take drug use out of criminal consideration + into medical consideration,” Ocasio-Cortez tweeted.
Last week, Forbes published an article on Redman, a rapper best known for being part of the early crew of Def Jam records — and for his collaborations with massive names in hip hop including Method Man, 2Pac, and Eminem. Redman and Method Man are working on their own cannabis brand. It’s all about helping,” Redman said.
At first glance, cannabis and cryptocurrencies seem to have a lot in common. Both comprise highly speculative markets subject to exuberant highs and crushing lows. The legality and regulation of each has languished in the gray. And to many mainstream investors, both have failed to shake synonymy with the black market.