|Bid||28.69 x 1000|
|Ask||32.51 x 800|
|Day's Range||29.36 - 29.83|
|52 Week Range||23.01 - 45.40|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||2.14|
|Expense Ratio (net)||0.75%|
If you are interested in investing in marijuana stocks but don't know the best way to get started, you may want to take a closer look at the ETFMG Alternative Harvest ETF (NYSEARCA:MJ), a marijuana-themed exchange-traded fund (ETF) that has over a $1 billion in assets under management.Source: Shutterstock Investing in MJ may enable investors to take a long-term view on a growth industry that is likely to reach tens of billions globally in a decade or two. However, investors in the cannabis sector should also remember how choppy individual stock prices can be.Therefore, long-term investors should buy into an ETF like the MJ only if they are comfortable with the fundamental drivers behind the industry, as well as the short-term volatility that comes with the territory.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Tech Stocks That Are Still Worth Your Time (And Money) Canadian Cannabis Stocks Have Been Hot Yet ChoppyOver the past 100 years, marijuana has been illegal in most of the world. Canada stepped into the spotlight in 2018 when it passed the Cannabis Act and became the first Group of Seven (G7) country to decriminalize the use of marijuana for medical and recreational purposes.Canada is also the second country in the world, after Uruguay, to legalize recreational marijuana at the federal level. Since then, a number of federally licensed Canadian cannabis producers have started trading on the Toronto Stock Exchange (TSE) as well as the New York Stock Exchange (NYSE).Several of the Canada-headquartered companies that are listed in the U.S. include Aurora Cannabis (NYSE:ACB), Canopy Growth (NYSE:CGC), Cronos Group (NASDAQ:CRON) and Tilray (NASDAQ:TLRY).The recent earnings reports from Canada-based cannabis stocks are important in gauging the health of the industry, as not everyone is convinced that Canadian recreational pot sales will remain strong. Many investors are concerned that the initial hype surrounding the industry could be decreasing.Since legalization in October 2018, Canadian sales numbers have been muted without any signs of increasing. In 2019, the total cannabis market in Canada, including both legal and illegal recreational and medical sales, is expected to be around C$7.2 billion. About half of it is likely to come from legal sales.The Canadian market may also be running the risk of being oversupplied. Is all this capacity truly needed, given that export volumes are not expected to meaningfully offset oversupply, either? If these marijuana companies harvest more than what they sell, there will be higher inventory balances.And simple economics tells us that a supply glut would eventually drive down the price of marijuana along with the margins of these companies.The developments in Canada over the past year has been reflected in the stock price of most of these Canada-based companies, moving investor sentiment from euphoria to greed to fear. Legal Status in the U.S.At the federal level, marijuana is illegal in the US. However, at the state level, its legal status depends on the laws of the individual state.State-wide legalization in the U.S. allows for both individual marijuana possession as well as the legal production and sale of the drug. Legalization can happen in two categories: the legalization of recreational marijuana or of medical cannabis.As both recreational and medicinal use is becoming more widely accepted, the number of U.S. states that have legalized it has increased. Medical cannabis is now legal in 33 states. Recreational marijuana is legal in 11 states, i.e., individuals require no prescription to use marijuana in these jurisdictions.In other words, the legalized marijuana industry is still in its infancy, even in Canada, and it is almost non-existent globally. None of the Canadian marijuana stocks have so far done any business in these pot-friendly U.S. states, as the listing requirements at the NYSE or NASDAQ as well as at the Toronto Stock Exchange (TSE) bar companies from engaging in commercial activities in countries where they would be breaking the law.On the other hand, in December 2018, the U.S. Congress passed the Farm Bill that President Trump later signed into law. The Bill legalized hemp and hemp-derived ingredient cannabidiol (CBD), especially popular among consumers seeking relief from physical pain. Because hemp is now an ordinary agricultural commodity in the U.S., farmers can apply for federal hemp cultivation permits.Hemp production, as well as products that contain CBD, are likely to be growth areas in the US in the coming years. Could Your Portfolio Benefit from the MJ ETF?At InvestorPlace, my colleagues often cover how various ETFs can help investors construct a diversified portfolio. An ETF is an index-tracking fund that trades on a major stock exchange. Similarly, MJ seeks to provide investment results that correspond to the total return performance of the Prime Alternative Harvest Index, which tracks the performance of U.S. and global companies that are engaged exclusively in legal activities involving cannabis for medical or non-medical purposes.In general, an ETF has an expense ratio -- a percentage of the fund's assets are used to cover management and other costs to run the fund. MJ's expense ratio is 0.75% per year or $75 annually per $10,000 invested.Depending on their brokerage accounts, investors can buy the MJ ETF on margin, trade options on it or even sell shares of it short. It currently pays dividends with a yield of 2.43%. In recent months, this marijuana ETF has become one of the most popular funds among millenial investors. Which Stocks Are in the MJ ETF?MJ ETF currently holds 38 stocks with about 70% allocation to pot companies and growers. Several of the major stocks in the MJ ETF include Aurora Cannabis, GW Pharmaceuticals (NASDAQ:GWPH), Cronos Group, Canopy Growth, Tilray and Green Organic Dutchman Holdings (OTCMKTS:TGODF) -- companies that are becoming increasingly mainstream. It also has an allocation of tobacco stocks and fertilizer companies.The top 10 holdings represent about 60% of holdings in the MJ ETF. One fundamental point that investors need to keep in mind is that most of these cannabis producer stocks are not profitable yet. Analysts value them mostly based on the expectation of high revenue growth, which would lead to future profits. Therefore, whenever Wall Street fears the given company is failing to meet growth or expectations, that pot stock will get penalized.Most of these Canada-based weed companies also have high operating expenses. And the red ink at the bottom of their income statements, quarter after quarter, is becoming a worry for shareholders. If the international cannabis market does not grow as expected, then MJ ETF's price could also experience selling pressure.From a fundamental perspective the next few years are likely to see important developments in the industry. There might be consolidation as well as partnerships between Canadian pot stocks and more established U.S. companies.For example, in August 2018, the alcoholic beverages giant Constellation Brands (NYSE:STZ) announced a $4 billion investment into CGC, and STZ now holds a 38% stake in the company. The two are currently developing cannabis-infused beverages for Canada, where experts believe they will be legal by 2020. Top Holding Stock to Note in the MJ ETFOur readers may know that a wide range of products are made from cannabis, including CBD oils, edibles, cannabis-infused beverages, concentrates used in vaping, creams, and lotions. Thus the industry includes companies that operate throughout the supply chain involved in making, marketing, and distributing these products.I'd like to highlight one stock in the MJ ETF that is quite different than the others which are mostly marijuana growers. This stock is GWPH, which tops the holding list with 8.87%.A 2018-report by the United Nations (UN) revealed that Britain is the biggest producer and exporter of legal cannabis in the world. In 2016, the UK produced 95 tonnes of marijuana and exported 2.1 tonnes.Virtually all of that is through exporting one drug, Sativex, produced by UK-based GW Pharmaceuticals, a leading cannabinoid-focused biotech company. In 1998, the company obtained a unique domestic licence in the UK to cultivate cannabis seeds.GWPH now produces Sativex to treat spasms in multiple sclerosis patients. Last year the company obtained U.S. regulatory approval of its CBD drug Epidiolex for the treatment of epilepsy.GW Pharmaceutical's share price has gone from about $10 in 2013 to an all-time high of $196 in May 2019. Currently it is hovering around $163. In other words, a biotech company such as GWPH is a secondary way to invest in the CBD market.Another example would be the companies that provide ancillary products and services, such as Scotts Miracle-Gro (NYSE:SMG). known by many consumers for its fertilizer products.And the MJ ETF enables investors to invest in these businesses as well as several tobacco companies, too. Where is MJ ETF Price Now?In the past two years, marijuana stocks have been choppy and highly speculative. Their valuations can and do change suddenly and drastically, both as a result of event-driven company news or developments in the industry.And the value of this particular marijuana ETF reflects this volatility. Year-to-date, the MJ ETF is up 22%. After seeing an intraday low of $23.3 on Dec. 24, 2018, it has rallied to a high of $39.25 on March 19. Its 52-week high remains at $45.4, reached on Sep. 19, 2018.Those investors who pay attention to technical charts should note that due to the decline in price since April, MJ ETF has a not-so-pretty technical picture. In the long-run, MJ needs to build a base again before a long-term sustained leg up can occur.From a price and time cycle perspective, the high reached on March 19, 2019, which came six months after the 52-week high of Sept. 19, 2018, is likely to be the highest price to be seen in the near-term.And MJ price may see a new 52-week low in Sept. 2019, possibly around $22.5, about a year after the current 52-week high of $45.4.Within the next two months, I expect MJ to mostly range-trade between $27.5 and $32.55. However, in case of a broader market selloff, similar to the one we have witnessed in the last quarter of 2018, the fund may easily go toward the mid-$20's level. The Bottom Line on the MJ ETFInvestors will need to follow developments in the industry closely to evaluate the appropriateness for marijuana stocks for their portfolio. It is important to note that unless legalization at the federal level in the U.S. happens, cannabis market is, for the most part, limited to the growth in Canada. And a limited Canadian market is not likely to help most of these pot stocks become profitable on an operating basis, a fact makes marijuana stock valuations even more difficult to justify.Long-term investors should therefore have realistic expectation of the market fundamentals. They should also be ready for daily price fluctuations as well as high volatility around the earnings release dates of the marijuana stocks that mostly make up the MJ ETF.If you already own this marijuana ETF, you might want to hold your position. However, within the parameters of your portfolio allocation and risk/return profile, you may consider placing a stop loss at about 5-7% below the current price point.If you are an experienced investor in the options market, you may want to protect your portfolio or your recent gains in marijuana stocks with a covered call or possibly a put option spread with a three-month time horizon. If you do not yet hold a marijuana ETF like MJ, you may want to wait several weeks to buy into it at the next dip.As of this writing, Tezcan Gecgil did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Defense Stocks to Buy to Fortify Your Portfolio * 10 High-Flying, Overvalued Stocks in Danger of Crashing * 8 Stocks to Buy That Are Growing Faster Than Amazon The post What You Need to Know Before Jumping into the MJ ETF Market appeared first on InvestorPlace.
YOLO.Source: Shutterstock That acronym for "you only live once" is now an official word in the English language. Texters and social media posters used it so much that it was added to the Oxford English Dictionary three years ago.I must say, I got a chuckle out of the definition. According to the dictionary, YOLO expresses "the view that one should make the most of the present moment without worrying about the future, and [is] often used as a rationale for impulsive or reckless behavior."InvestorPlace - Stock Market News, Stock Advice & Trading TipsLeave it to the dictionary to take all the fun out of it.Believe me, I'm all for making the most of the present, but I don't believe we should have a carefree attitude about the future. Especially when it comes to retirement. We need to prepare for it. And when it comes to your financial future, you definitely do not want impulsive or reckless behavior.That's especially true when investing in marijuana stocks, which are unquestionably one of the best investment opportunities of our lifetimes. You can get really burned if you're impulsive or reckless.I bring this up because YOLO is actually a ticker symbol for a recent marijuana-related exchange-traded fund (ETF) called the AdvisorShares Pure Cannabis ETF, which debuted in April.As legalization spreads and the industry grows, cannabis ETFs are in the midst of their own marijuana craze. In just the last couple of weeks, three new funds have started trading or announced that they are about to: The Cannabis ETF (THCX), Amplify Seymour Cannabis ETF (CNBS), and Cambria Marijuana ETF (TOKE).I must say, YOLO and TOKE win the best symbols award … at least for now.These new funds have a long way to go to catch up with the leaders. ETFMG Alternative Harvest ETF (MJ) has $1.15 billion in net assets, while Horizons Marijuana Life Sciences Index ETF (HMMJ) is next with $788 million.I get asked all of the time about marijuana ETFs, especially from people who are new to investing. Marijuana's huge potential has attracted folks with less investing experience, so I created a special five-part video series "masterclass" on marijuana investing to show them how to get started and answer a lot of these kinds of questions.So are ETFs good for marijuana investing?Yes.And no.I know that doesn't sound very helpful, so let me explain what I mean. Get the Best of Both WorldsInvesting in a marijuana ETF is better than not investing in marijuana at all. If that's what makes you comfortable, you should do it. I'd rather see you get at least some exposure to this incredible opportunity. At the moment, I like both the established Alternative Harvest ETF and YOLO, but the others are worth watching.On the other hand, there is a better way to get all of the benefits of an ETF but make more money. You basically build your own smart ETF, a strategy we use often in my investing services.Most ETFs hold dozens or even hundreds of different companies. They can give you diversified exposure to a sector or country, and they can be very useful investment vehicles.However, because ETFs hold so many stocks, a buyer is virtually guaranteed to end up owning a lot of average companies -- and even some crappy ones. You have to take the bad with the good. You can't separate them.But you can with your own ETF. By purchasing a handful of the best companies, you avoid owning the weak players. This gives you big upside potential while still providing you with diversification.It's a smart way to invest in big themes like marijuana. You get an excellent balance of risk and reward.It's not always possible to buy a basket in a sector. Sometimes, there aren't many good individual companies trading at good prices in a sector at the same time.That's not the case with marijuana. The exploding industry is perfect for creating your own ETF.There are bigger companies and smaller companies. Companies that grow marijuana. Companies that extract oils. Companies that own retail shops. Companies that recently went public. Companies jumping from small stock exchanges to big stock exchanges. Medical marijuana companies. Even marijuana software companies.There are so many good cannabis opportunities that you should own enough stocks to build your own ETF anyway.I find this approach helps investors who are leery of investing in marijuana or new to investing. Do me a favor and think about it.Legal marijuana is slated to skyrocket from less than $10 billion today, into a $100 BILLION juggernaut. That makes it easily the biggest investment opportunity over the next few years. If you learn nothing else from me, I hope you will at least look into this once-in-a-generation opportunity. And if you need help getting started, just let me know.Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of Investment Opportunities and Early Stage Investor. He has dedicated his career to getting investors 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), +1,044% in Tesla (TSLA), +611% in Liquefied Natural Gas Limited (LNGLY), +324% in Bitcoin Services (BTSC), just to name a few. If you're interested in making triple-digit gains from the world's biggest investment trends BEFORE anyone else, click here to learn more about Matt McCall and his investments strategy today. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Defense Stocks to Buy to Fortify Your Portfolio * 10 High-Flying, Overvalued Stocks in Danger of Crashing * 8 Stocks to Buy That Are Growing Faster Than Amazon The post Marijuana Stocks: How to Start Investing in Pot's Explosive Growth appeared first on InvestorPlace.
On July 23, the Banking, Housing and Urban Affairs Committee in the Republican-controlled Senate will discuss the challenges related to cannabis companies’ access to banking services. The hearing, titled “Challenges for Cannabis and Banking: Outside Perspectives” will feature testimony from a number of experts, including the Credit Union National Association, and sponsors and co-sponsors of the SAFE Banking Act bill. The second hearing, “Hemp Production and the 2018 Farm Bill,” will be held July 25 by the Senate Committee on Agriculture, Nutrition and Forestry, where members will hear testimony from representatives from the U.S. Department of Agriculture, Food and Drug Administration and the National Hemp Association, among others.
It's been puzzling to me to read or listen to some of the commentary associated with the deal Canopy Growth (CGC) made to acquire U.S.-based Acreage Holdings (ACRGF), based upon the assumption America will soon legalize cannabis at the federal level.Not only is this not an inevitability, it's quite possible, at least in regard to recreational pot, that it may never happen, or at best, be many years away. I have considered this to be the worse of the moves Canopy Growth made in regard to expansion.Understanding U.S. cannabis sentimentAfter Canada legalized recreational pot in 2018, the common idea arose that the U.S. would quickly move in the same direction. The major problem there is the media and a number of pundits wrongly assumed Canadian sentiment as being the same in America. It's not.The two countries are very different, and the sentiment of approximately half of the population is against legalizing recreational pot in any way. Senate majority leader Mitch McConnell has already stated he'll oppose any attempt to legalize recreational pot in the country.What is more probable in the U.S. is all the states will eventually legalize medical cannabis, but many will not do the same for recreational pot. For that reason I believe medical cannabis is likely to be also legalized at the federal level, but resistance will be strong against recreational legalization. Again, I see the strong possibility it'll never be legalized in the U.S.As the general public starts to understand cannabis better, they understand there are legitimate benefits from it, but also clearly understand, or at least believe, recreational pot isn't one of them.Acreage Holdings shouldn't be included in a Canopy modelI've seen a lot of investors believe in the assumption it's inevitable that recreational pot will be legalized in America, and they base their Canopy Growth model upon that outlook.The obvious problem is what I mentioned above, which is there is no way in the near future, if ever, Canopy Growth will be able to pull the trigger on Acreage Holdings. For that reason, to include the performance and future performance outlook for Acreage Holdings in Canopy Growth's numbers is a big mistake.Even Canopy Growth management included this possibility when making the deal, as it is allowed to scrap it if nothing happens in between seven to eight years. That points to the reality that management knew there was the distinct possibility the deal would never be consummated. Investors should believe that.Nonetheless, I keep reading or hearing in the media that while Acreage Holdings won't be a part of Canopy Growth in the next year, it's suggested it's only a matter of time before it is.People that make those declarations do so on a faulty premise. The problem is filtering American sentiment through a Canadian spectrum. I'm repeating that because investors really need to understand that Acreage Holdings is in no way a surety concerning being able to be acquired by Canopy Growth.ConclusionIt's a waste of time to me, and a risky endeavor to analyze Canopy Growth based upon it eventually being able to acquire Acreage Holdings. The more I study the deal and measure it against political sentiment in America, the more I believe the deal may never be made. Even if it is eventually made, I think it'll be many years before it happens, at best.If it takes longer than the seven-plus years allotted per the deal, it's almost certain both companies will go their separate ways. My thought is they may make an amicable separation before that if the American market is clearly not going to include federal legalization of recreational pot.Bottom line is investors should look at Canopy Growth based upon its existing potential, and not something that may never unfold. Also, investors need to ignore the media hype and closely examine what U.S. politicians are saying concerning opposition to legalizing recreational pot. It's not as optimistic as is being portrayed in the media and by talking heads.To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here. Read more on CGC: * There’s Light at the End of the Tunnel for Canopy Stock, Analyst Says * Three Big Reveals as Jefferies Meets With Canopy Growth’s (CGC) New CFO * Canopy Growth: What CEO’s Exit Means for the Stock * Canopy Growth May Never Reap the Benefits of Acreage Holdings More recent articles from Smarter Analyst: * Lannett Company (LCI) Stock Makes the Street Go Wild * Top Analyst Shares Two Cents on Amazon (AMZN) Stock as Earnings Approach * Curaleaf Helping to Put U.S. Cannabis Sector on the Map * Netflix’s (NFLX) Original Content Strategy Is Failing; The Stock Is Overvalued
While Congress and activists met for the first time to discuss ending marijuana prohibition in the United States last week — there was plenty of “disagreement and debate,” reported Marijuana Moment — all signs continue to point toward federal legalization remaining a ways away. Conducted by YouGov, the poll represents a “clear and growing appetite” for reforming drug laws in the UK, says the Conservative Drug Policy Reform Group, which commissioned the study. The poll shows a vast majority support medical marijuana legalization in the UK (77%).
Massachusetts-based cannabis company Curaleaf Holdings Inc. said Wednesday it was buying multi-state operator GR Companies Inc. in a deal valued at $875 million in cash and stock. Under terms of the deal, Curaleaf will pay $75 million in cash and provide 102.8 million subordinate voting shares and $40 million worth of shares. The acquisition, which is expected to close in early 2020, will increase Curaleaf's presence to 19 states from 12, including Illinois, which legalized adult-use cannabis in June. The combined company will have 131 dispensary licences, 68 operational locations, 20 cultivation sites and 26 processing facilities. Curaleaf's U.S.-listed shares have tumbled 35.1% over the past three months, while the ETFMG Alternative Harvest ETF has lost 11.7% and the S&P 500 has gained 3.6%.
Almost everyone interested in the cannabis sector has heard about the news that CannTrust (CTST) was found growing cannabis in unlicensed rooms, resulting in the company stopping all sales and shipments of its products until the matter is cleared up.Not only will this significantly slash its performance in this quarter at least, but there are a number of other consequences to consider that could have a long-term impact on the company, such as a growing number of lawsuits and the possibility of having its its license in Canada suspended, or worse, canceled altogether.Narrative getting worseInitially company management didn't take all the blame for being found non-compliant concerning the five rooms in its Niagara greenhouse that were illegally growing cannabis.They said in a press release that the report was "based on observations by the regulator regarding the growing of cannabis in five unlicensed rooms and inaccurate information provided to the regulator by CannTrust employees."Since the initial reports it has come out that at least one former employee was asked to put fake walls up in order to hide the plants from the regulator. Staged photos resulted in the regulator not having a visual of the plants.As I write there are 14 known lawsuits filed against the company, which will keep the debacle in the media, and a growing concern the lack of supply as a result of the company freezing sales and delivery will further harm the Canadian market specifically, and produce a lack of trust for the cannabis sector in general.Investors alone won't forget the actions, neither will their peers, who have also suffered from the negative fallout surrounding the actions of the CannTrust.Do fundamentals remain in place?One thing that all investors should ask after situations like this concerning a company is: "are the fundamentals of the company still in place?" The answer at this time is no, in the short term, and impossible to tell in the long term.In the short term the company is going to get savaged. It's next earnings report will be a disaster, assuming the company retains its licenses. Even in the near term we have no idea how long the company will have to hold onto its product without delivering it.For the long term there could be stiff fines from Canadian authorities, costly lawsuits that could result in huge payouts, and as already mentioned, the potential loss of its licenses.Also, over the long haul, a lot of companies or provinces won't want to do business with CannTrust because of being tainted by association with the company.At the international level, we already know Denmark received some of the unlicensed product, and that could have a ripple effect in Europe, which could also have a negative impact on the company.ConclusionIt's inexcusable that CannTrust had this happen to them, and at some levels, participated in the cover up by hiding the plants in a photo op.In the short and long term I think it'll be very hard for the company to recover in any sustainable manner.At this time I'm not convinced the company will have its licenses canceled, but with the numerous other pitfalls that have come as a result of its breaking the rules, it's going to be a long time before it fully recovers.All of this is happening at a time CannTrust should have been ramping up production in its facilities.As for profits and performance, this has seriously set back the company for a prolonged period of time. This isn't going to go away anytime soon, and the monetary consequences are yet to be determined; they could be formidable.To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here.Disclosure: No position.Read more on CTST: * Can You Still Trust CannTrust (CTST) Stock? * Despite Uncertainty, the Speculative Case for CannTrust Stock Is Still Solid * Analyst Loses Trust In CannTrust After Unauthorized Production, Downgrades Stock More recent articles from Smarter Analyst: * Lannett Company (LCI) Stock Makes the Street Go Wild * Top Analyst Shares Two Cents on Amazon (AMZN) Stock as Earnings Approach * Curaleaf Helping to Put U.S. Cannabis Sector on the Map * Netflix’s (NFLX) Original Content Strategy Is Failing; The Stock Is Overvalued
The U.S.-listed shares of OrganiGram Holdings Inc. turned lower in premarket trading Monday, to a loss of 6.0% after being up as much as 2.4% earlier, after the Canada-based cannabis company reported a 7-fold increase in fiscal third-quarter net revenue but swung to a surprise loss amid fair value changes to biological assets in inventory. The company reported a net loss of C$10.2 million ($7.8 million), or 7 cents a share, after a profit of C$2.8 million, or 3 cents a share, in the year-ago period. Gross revenue increased nearly 9-fold to C$30.4 million, while net revenue including excise taxes rose to C$24.75 million ($19.0 million) from C$3.4 million. The FactSet consensus was for a profit of 3 cents and revenue of C$29.7 million. Cash and all-in-costs of cultivation increased to C$0.95 and C$1.29 per gram of dried flower, respectively, from C$0.65 and C$0.95 per gram in the sequential second quarter, due primarily to a "temporary" decrease in yield per plant resulting from a change in growing protocol. The company said yield returned to previous levels toward the end of the third quarter and into the fourth quarter. The stock has shed 8.3% over the past three months through Friday, while the ETFMG Alternative Harvest ETF has slid 13.1% and the S&P 500 has gained 3.7%.
A third marijuana ETF began trading in the U.S., just ahead of the U.S. House of Representatives' meeting to discuss federal prohibition of cannabis.
Cannabis stocks flew higher in reaction to the legalization of recreational weed in Canada and the legalization of hemp in the U.S. as part of the 2018 Farm Bill. Many investors are working under the assumption that cannabis will be legalized at the federal level in the near-term, Cramer said during his daily "Mad Money" show Thursday. A disconnect exists between what many cannabis companies are promising investors versus the reality on the ground, Cramer said.
Restrictions on outside investments, state and local regulations and oversaturation are constant roadblocks that exist in every cannabis legalized state to some degree and have a direct impact. There is a lot of talk about the lack of opportunity for outside investors to get in on states’ local cannabis industries. Foreign investors are looking to collaborate, but the general consensus from state and local regulation has been negative.
On Wednesday, U.S. Congress held a landmark hearing regarding cannabis legalization and the need to reform. Benzinga's Cannabis Capital Conference heads to Detroit on Aug. 15 -- Click here to learn more! "It is imperative that we recognize the disparate and ongoing impact of marijuana prohibition on people of color and the barriers it creates for them to take part in the burgeoning legal cannabis market,” Aaron Smith, executive director of the National Cannabis Industry Association, said in a statement.
This is the first of a two-part series on the history of Colombia and its route to cannabis legalization. Colombia is in an extraordinary position. It possesses the fourth largest economy in Latin America.
In a surprise move, Constellation Brands (STZ) has forced out Bruce Linton from Canopy Growth (CGC). The news has negative ramifications for the June quarter and beyond as Constellation Brands was apparently not happy with the quarterly results that included growing losses.Bruce Linton Fired The press release from Canopy Growth suggested that co-CEO Bruce Linton agreed to step down to allow the company to find the next leader of the company. According to Bruce Linton on CNBC, he was fired. The company has placed Mark Zekulin into the sole CEO roll.The move follows a horrible March report where Constellation Brands openly complained about the huge losses at Canopy Growth. Constellation Brands invested C$5 billion in Canopy Growth last August, but the results haven’t impressed sending the stock down below $40.Per MarketWatch, CEO William Newlands made this statement on Constellation Brands earnings call:While we remain happy with our investment in the cannabis space and its long-term potential, we were not pleased with Canopy’s recent reported year-end resultsConstellation Brands bought a 38% interest at the time of the deal along with additional warrants for C$4.5 billion that if exercised would provide for a controlling interest. Naturally, the global spirits company didn’t make a near C$10 billion commitment in order to watch the capital burned via large operating losses and wild spending on acquisitions.RamificationsFor FQ4, Canopy Growth reported a massive C$97 million adjusted EBITDA loss, up from C$725 million in the prior quarter. In addition, the company including the CEO talked up a massive flood of new cannabis supply expected to hit the market in the June quarter and beyond. The June quarter harvest was 34,000 kg or roughly double the March quarter.The initial take on this executive change being announced on July 3 is that the FQ1 results are likely horrible. The expected ramp up in sales from Ontario retail stores isn’t sopping up mounting inventories. Remember, the company has access to detailed financial information following the close of the June quarter last week.Analysts forecast FQ1 revenues to reach $86 million and jump to $111 million in the September quarter. The suggestion by the firing of the founding CEO is that Canopy Growth misses estimates and reports some very large losses the rest of FY20 before Cannabis 2.0 ramps up next year.All of these numbers are far below the projections of fired CEO Bruce Linton who proclaimed that Canopy Growth would reach C$1 billion in sales in the next year. Analysts are down at estimates of only $555 million or the equivalent of C$726 million, far below his forecasts even more this executive shuffle.One should expect that these financial targets are at risk now.TakeawayThe key investor takeaway is that the market is coming around to signs that the exit of Bruce Linton might lead to more discipline in the sector. Investors should quickly fade this initial rally back above $40.The cannabis sector is in line for more turmoil in the months and quarters ahead. Canopy Growth will need to rationalize production targets and face market share losses from aggressive competitors. The best option for investors is to wait for the industry shakeout before looking to pickup shares.To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here.Disclosure: No position.Read more on CGC: * Canopy Growth May Never Reap the Benefits of Acreage Holdings * Canopy Growth (CGC): Buy the Dip or Pump the Brakes? * Canopy: Recent Licence from Health Canada Ain’t Going to Help the Stock * Canopy Continues to Struggle to Find Its Identity More recent articles from Smarter Analyst: * Lannett Company (LCI) Stock Makes the Street Go Wild * Top Analyst Shares Two Cents on Amazon (AMZN) Stock as Earnings Approach * Curaleaf Helping to Put U.S. Cannabis Sector on the Map * Netflix’s (NFLX) Original Content Strategy Is Failing; The Stock Is Overvalued
Investors that enjoy cannabis investing via the ETF wrapper rejoice: you've got another marijuana ETF to consider. On Tuesday, the aptly named Cannabis ETF (NYSEARCA:THCX) came to market.Source: Shutterstock The new cannabis ETF's issuer, Innovation Shares, frames the rookie marijuana fund as the "first passively managed pure-play ETF solution for investing in cannabis." THCX is the third cannabis ETF to hit U.S. exchanges. The $1.1 billion ETFMG Alternative Harvest ETF (NYSEARCA:MJ) is the seasoned veteran among domestic cannabis ETFs.New competition to MJ arrived in April when the actively managed AdvisorShares Pure Cannabis ETF (NYSEARCA:YOLO) launched. Today, YOLO has around $60 million in assets under management, making it one of the more successful stories among 2019's crop of new thematic ETFs.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * The S&P 500's 5 Best Highest-Yielding Dividend Stocks "As a pure-play cannabis ETF, THCX focuses on companies in the legal marijuana, CBD and hemp industries -- the portfolio does not rely on alcohol or tobacco stocks to provide exposure to this burgeoning global growth story," said Innovation Shares Managing Director Matt Markiewicz in a statement. The New Cannabis ETF's HoldingsThe new cannabis ETF tracks the Innovation Labs Cannabis Index, a rules-based benchmark that rebalances monthly. Home to 36 stocks, the cap-weighted index has a combined market capitalization of about $80 billion and features 19 licensed Canadian producers and 19 US-listed weed stocks, according to issuer data.Index components include some more obscure fare, such as The Green Organic Dutchman Holdings Ltd. (OTC:TGODF) and Toronto-listed OrganiGram Holdings Inc. (TSXV:OGI.V). Well-known cannabis names in the benchmark include Aurora Cannabis (NYSE:ACB), Canopy Growth (NYSE:CGC) and HEXO Corp (NYSE:HEXO), a beaten up Canadian cannabis name."The index currently consists of 35 stocks that are expected to benefit from the rise in value of the global cannabis market which is estimated to reach $630 billion by 2040," according to the index provider.Combined, THCX's aforementioned rivals, MJ and YOLO, have almost $1.2 billion in assets under management. That number does not necessarily jibe with investor demand for a marijuana ETF or interest in the cannabis investment theme. However, that theme is still in its early innings, many cannabis stocks are volatile, plenty are not profitable and some investors are simply waiting for the group's real leaders to emerge while the more financially challenged names peter out.While a myriad of challenges face cannabis stocks and their investors, scores of data and fundamental factors bode well for the long-term trajectory of the industry, potentially paving the way for more acceptance and assets of cannabis ETFs."With several regulatory catalysts on the horizon in the U.S. and abroad, the current cannabis environment presents an exciting opportunity for investors," said Markiewicz. "One area which has witnessed explosive growth since the signing of last year's U.S. Farm Bill is the hemp-derived CBD industry. Several of the companies in the portfolio are actively participating in this CBD boom by cultivating hemp, providing extraction services or by using CBD for applications in the pharmaceutical, health and consumer wellness markets." The Bottom Line on THCXMany new ETFs, regardless of underlying investment objective, struggle. And it is clear THCX entered as still small, but highly competitive arena. That said, the new cannabis ETF has something on its side: a low fee. Sort of."Sort of" because the rookie cannabis ETF charges 0.70%, per year, or $70 on a $10,000 investment. That is not cheap in ETF terms, but it is expensive relative to the 0.75% charged by MJ and YOLO's annual expense ratio of 0.74%. * 7 Retail Stocks to Buy for the Second Half of 2019 At the very least, THCX's low fee is likely to catch a few eyes among investors comparing the cannabis ETFs and that should be good to get some capital flowing into the fund.Todd Shriber does not own any of the aforementioned securities.The post The New Cannabis ETF Is the Market's Cheapest Marijuana Fund appeared first on InvestorPlace.
U.S.-based cannabis company MedMen Enterprises Inc. said Wednesday it received an additional $30 million equity investment from Gotham Green Partners, with participation from Wicklow Capital. That brings the total financing commitment led by Gotham to $280 million. Gotham has so far funded $100 million of the total commitment. "Both Gotham Green and Wicklow have shown continued confidence in our strategy and recognize the potential ahead," said MedMen Chief Executive Adam Bierman. MedMen's U.S.-listed shares have dropped 10.1% year to date, while the ETFMG Alternative Harvest ETF has rallied 25.3% and the S&P 500 has gained 18.9%.
Upstart exchange traded funds issuer Innovation Shares is expected to roll out The Cannabis ETF (NYSE: THCX ) today, about nine months after the issuer filed plans for the fund. What Happened Innovation ...
The U.S.-listed shares of CannTrust Holdings Inc. plunged 20% in premarket trading Monday after the Canada-based cannabis company said it greenhouse facility in Pelham, Ontario was deemed "non-compliant" by regulators. The stock is on track to open at the lowest price seen during regular session hours since October 2017. "The non-compliant rating is based on observations by the regulator regarding the growing of cannabis in five unlicensed rooms and inaccurate information provided to the regulator by CannTrust employees," the company said in a statement. The company said 5,200 kilograms of dried cannabis was placed on hold by Health Canada, and the company has voluntarily held about 7,500 kilograms of cannabis equivalent at its Vaughan facility. CannTrust said customers and patients will experience temporary product shortages as a result of the hold, while the company explores options to mitigate the shortages. The company said the financial impact is "unknown" until Health Canada completes its testing. The stock has plunged 36.3% over the past three months through Friday, while the ETFMG Alternative Harvest ETF has lost 11.5% and the S&P 500 has gained 3.3%.
Neptune Wellness Solutions Inc. said Monday Chief Executive Jim Hamilton has stepped down after more than 4 years in the role, but will remain with the cannabis extraction company as an advisor. Neptune named Micheal Cammarata as its new CEO, effective Monday. The company said Cammarata, who has been a "serial entrepreneur" over the past 20 years, is the co-founder of wellness brand Schmidt's Naturals, which is now a business unit of Unilever PLC . "[Cammarata] has identified new trends and opportunities which led to the development of market-leading products," said Chairman John Moretz. "These critical skills should benefit our customers. Moreover, Michael possesses the right mix of operational CEO experience, leadership skills, and technology industry expertise to help elevate Neptune to the next level." Neptune's stock, which was still inactive in premarket trading, has soared 74.4% year to date, while the ETFMG Alternative Harvest ETF has rallied 27.3% and the Dow Jones Industrial Average has gained 15.4%.
According to the National Retail Federation, Mother’s Day and Father’s Day spending this year was expected to reach a record $25 billion and $16 billion, respectively. Data from Headset, a data analytics company in the cannabis industry, shows some of that money was spent on cannabis products. Yes, even when it is hard to say exactly how much, the lift in cannabis purchases was tangible during both weekend celebrations.
There’s a general consensus among insiders that the federal prohibition on cannabis will be repealed within the next three to five years. I think it’ll be sooner. Momentum is strong, voters want it, and ...