|Bid||16.68 x 0|
|Ask||16.74 x 0|
|Day's Range||16.34 - 17.11|
|52 Week Range||13.97 - 27.00|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||N/A|
|Expense Ratio (net)||0.94%|
Last week was a brutal week for Aphria (APHA) (APHQF). Aphria’s troubles began last Monday when Gabriel Grego of Quintessential Capital Management called the stock “worthless” and explained in detail why he believes the company destroyed shareholder value. Aphria fought back and appointed a special committee that consists of independent directors who will be tasked with reviewing the allegations.
In the week ending December 8, two big moves gripped the cannabis market. Cronos Group’s (CRON) 45% stake was acquired by Altria, which caused Cronos to gain 39% last week. Aphria (APHA) (APHQF) cut its stock almost in half last week. The cannabis sector, represented by the Horizons Marijuana Life Sciences ETF (HMMJ), fell almost 4%. The ETFMG Alternative Harvest ETF (MJ) declined 1.5% during the same period. Let’s look at how other stocks performed last week.
Aprhia (APHQF) recovered by nearly 50% on December 6 due to its further commitment to relieve investors’ fears related to its Latin America business. The company appointed a special committee that consists of independent directors who will be tasked with reviewing the legitimacy of the company’s acquisitions in Latin America. The above chart shows that Aphria (APHQF) is among the top ten holdings in the Horizons Marijuana Life Sciences ETF (HMMJ).
On December 7, Altria officially announced that it acquired a ~45% stake in the company to the tune of $1.8 billion. Given that Altria has been in the tobacco business for nearly three decades, the cannabis business makes sense for the business.
On December 6, Aphria (APHQF) (APHA) clawed back after a brutal sell-off in which the company lost nearly half of its value in just the first three days of this week. In contrast, Aurora Cannabis (ACBFF), Tilray (TLRY), and Cronos Group (CRON) were all in the negative territory. At the heart of Aphria’s downfall was a short seller’s allegation that acquisitions in Latin American were made at inflated prices.
On December 6, Canopy Growth (WEED) acquired Storz & Bickel, a German vaporizer company, for nearly 145 million euros. The acquisition comes at a time when Canopy Growth stressed the future of the cannabis industry (HMMJ) where companies offer a wider variety of products. In its press release, Canopy Growth stated that Storz & Bickel’s most notable vaporizer products include Volcano Medic and Mighty Medic as we see in the above chart.
Aphria (APHQF) (APHA) has been reeling due to scandalous allegations regarding the company’s business activities. There doesn’t seem to be a bottom for the stock. Aphria stock lost nearly 25% on December 5. The stock has lost 42% in the three trading days in December.
On December 4, the NYSE halted Aphria (APHA) (APHQF) in the pre-market session. The trading resumed after Aphria clarified allegations about its Latin America business.
On December 4, Aphria (APHA) (APHQF) continued to fall. There were negative remarks that the company diverted investors’ funds to companies in Latin America that were linked to insiders at inflated values. Aphria lost almost 21.2% on December 4. The stock fell to 5.99 Canadian dollars from 6.6 Canadian dollars.
Cannabis industry ETFs are designed for those investors who don’t have the capacity to hold many stocks but are interested in diversifying within the cannabis sector.
On December 3, Canopy Growth (WEED) (CGC) announced another strategic partnership. The agreement intends to increase Canopy Growth’s supply deal with an entity named 48North. The deal involved Canopy Growth making an equity investment in 48North with the latter supplying dried cannabis to Canopy Growth.
On December 3, Aphria (APHQF) (APHA) had one of its worst days after falling nearly 28% in the Canadian exchange to 7.6 Canadian dollars from 10.51 Canadian dollars. Aphria fell due to a scathing remark made by a bearish investor, Gabrial Grego of Quintessential Capital Management. The news comes right after Aphria had one of its worst months in November. Aphria stock fell nearly 30%, while other stocks in the cannabis industry (HMMJ) experienced a relatively better month.
MPX Bioceutical will form a new entity, MPX International, which will include all the businesses of MPX outside the United States and will not be part of this deal. The acquisition of MPX Bioceutical’s US assets will position iAnthus Capital Holdings as one of the largest companies in the regulated cannabis industry (HMMJ) in the United States.
Aphria (APHQF) stock fell nearly 30.6% in November. The stock closed at 10.5 Canadian dollars on November 30, which declined from 15.2 Canadian dollars at the beginning of the month.
Last week, the overall cannabis sector continued to show weakness with ETFs and major stocks ending in the negative territory though the broader market ended in the positive territory. The Horizons Marijuana Life Sciences ETF (HMMJ) declined by nearly 3%, while the ETFMG Alternative Harvest ETF (MJ) lost about 2.3% over the same period. The Emerging Marijuana Growers Index ETF (HMJR) also lost nearly 4.7%. In contrast, the TSE 300 Index rose by 1.3%, and the S&P 500 Index rose by 4.9% from its close on November 23 to its close on November 30.
MedMen Enterprises (MMNFF) holds 19 licensed cannabis facilities for cultivating, manufacturing, and marketing cannabis as a consumer product. MedMen released its fiscal 2019 first-quarter results yesterday at 5:00 PM Eastern Time, reporting revenue of ~$21.5 million. The chart below shows MedMen’s revenue over the last few quarters.
Earlier in November, Senate Majority Leader Mitch McConnell indicated a provision for hemp legalization in the latest version of the farm bill. The provision will include making hemp a legal agricultural commodity in the United States. Hemp can be used to make CBD derivative products that don’t have exposure like other marijuana products including THC, a psychoactive ingredient, that makes it a controlled substance.
With smoking restrictions in public and the workplace, cannabis in the form of a dried flower might not be the most preferred way to enjoy cannabis. Canopy Growth (WEED) refers to the process of converting the dried flower to other forms as “value-addition.” The above chart shows the possibilities for value-addition. Canopy Growth thinks that it’s important to move into value-added products like soft gels and pre-rolled products.
On November 29, Canopy Growth (WEED) entered an 18-month supply agreement with MediPharm Labs, in which the latter will supply up to 900 kilograms of cannabis extract to Canopy Growth and its subsidiaries for sale. Initially, Canopy Growth committed to a minimum purchase of 450 kilograms, which could later be extended to another 450 kilograms.
On November 29, Jim Cramer, the widely followed host of Mad Money on CNBC, reiterated his confidence in the cannabis industry. He recommended Constellation Brands as one of his four top picks. Cramer’s main reasons for recommending Constellation Brands stemmed from its investment in Canopy Growth (WEED)—the cannabis giant in Canada.
On November 27, Aurora Cannabis (ACB) (ACBFF) announced that it completed its first shipment to the Czech Republic after it was able to secure an export permit to ship medical cannabis to the country. The below chart shows Aurora Cannabis’s market reach around the world. The medical cannabis was shipped to Czech Medical Herbs, which is a wholesaler of pharmaceutical products in the country.
As each day passes, we hear more positive developments about cannabis legalization in the United States. In the latest developments, lawmakers in Garden State, New Jersey, debated about legalizing recreational cannabis. The bill to legalize recreational cannabis will be voted on later this month. Will New Jersey be the 11th state?
In this article, we’ll discuss Curaleaf Holdings’ (LDVTF) valuation as of November 27 and its comparison with its peers, including WeedMD (WDDMF), Trulieve (TCNNF), and Maricann (MRRCF).
As we discussed in the previous article, Curaleaf Holdings (LDVTF), one of the leading cannabis operators in the United States, released its third-quarter earnings results on November 26. Curaleaf Holdings reported a 247% increase in its revenue to $45.1 million in the first nine months of 2018 compared to $13.0 million in the same period of 2017. Its revenue in the first nine months of 2018 was $55.0 million on a pro forma basis when consolidated for nonprofit entities.