Stocks trending lower
Canopy Growth (WEED) (CGC), one of the major cannabis stocks in Canada, lost ~2.6% during the day on April 9. Aurora Cannabis (ACB) fell ~2.6% around 12:00 PM EST on April 9. The broader sector was also trading in the negative. The Horizon Marijuana Life Sciences ETF (HMMJ) lost almost 2.5% of its value by mid-day, while the ETFMG Alternative Harvest ETF (MJ) lost ~1.7% during the day.
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Cannabis sector real estate stock Innovative Industrial Properties (IIPR) was also trading in the red. Innovative Industrial Properties stock fell ~2.7%, while Green Thumb Industries (GTBIF) fell 2.8%. KushCo Holdings (KSHB) was also trading ~2.3% lower before its earnings.
While these stocks have performed impressively in 2019, March and April have been relatively weak. The ongoing slump in the sector is slowly erasing investors’ gains in 2019.
By mid-day, Cronos Group (CRON) was trading flat, while Tilray (TLRY) was trading ~1.7% lower. As of April 5, Tilray was trading at a forward EV-to-sales multiple of 15x, which was above the peer median of 6.2x. Tilray was trading at an EV-to-EBITDA multiple of 189x compared to peers’ median of 24x. The company’s valuation looks stretched, which could explain why it has been falling.