28 May

Trade Scare: Cannabis Stocks Extend Losses into Fourth Week

WRITTEN BY Mohit Oberoi, CFA

Cannabis plays

Last week, cannabis ETFs extended their losses, and they’ve now fallen for four consecutive weeks. Broader US markets have also come under pressure amid the US-China trade war. Let’s look at cannabis ETFs. The ETFMG Alternate Harvest ETF (MJ) lost 0.7% last week while the Horizons Marijuana Life Sciences ETF (HMMJ) fell 0.3%.

Trade Scare: Cannabis Stocks Extend Losses into Fourth Week

Price action

Emerald Health Therapeutics (EMH) and Green Organic Dutchman Holdings (TGOD) closed in the green last week, gaining 3.0% and 3.1%, respectively. Harvest Health and Recreation (HRVSF), Village Farms International (VFF), GW Pharmaceuticals (GWPH), and Greenlane Holdings (GNLN) lost 1.3%, 1.0%, 4.9%, and 2.0%, respectively. Greenlane Holdings is trading 10.5% below its IPO price.

Last week, Village Farms International announced “conversion of half of its 1.3 million square foot, ultra-high-tech Permian Basin greenhouse (which utilizes the Company’s proprietary GATES® technology) for both cultivation of high-cannabidiol (CBD) hemp and CBD extraction.” The company released its earnings earlier this month and reported revenues of $31.9 million in the first quarter, compared to $29.5 million in the first quarter of 2018.

Upcoming earnings

Charlotte’s Web Holdings (CWBHF) and Cresco Labs (CRLBF) saw negative price action of 7.4% and 7.6%, respectively, last week. Both companies are scheduled to release their first-quarter earnings this week. See Charlotte’s Web Holdings’ Preliminary Q1 Results for more analysis

Zynerba Pharmaceuticals (ZYNE) saw one of the biggest losses in the cannabis space, down 14.8% last week. The stock had been up 21.3% during the previous week.

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