Cannabis Roundup on TLRY, IIPR, ACB, and WEED


Oct. 4 2019, Updated 6:28 p.m. ET

Today, the broader equity market was flat. However, the majority of the cannabis stocks were trading in the red. At 2:15 PM EDT, the Horizons Marijuana Life Sciences Index ETF (HMMJ) and the ETFMG Alternative Harvest ETF were down 0.8% and 0.9%, respectively.

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Tilray to acquire 420 Investments

Today, Tilray (TLRY) announced that it signed an agreement to acquire 420 Investments through its subsidiary High Park Holdings. A recreational cannabis retail operator, 420 Investments currently operates at six retail locations and owns the licenses for 16 more locations.

The acquisition deal is worth 110 million Canadian dollars but is subject to a particular performance-related milestone of 420 Investments. Tilray would pay 70 million Canadian dollars in its Class 2 shares and 40 million Canadian dollars in its common shares to 420 Investments’ shareholders.

Tilray expects to close the deal by the end of Q1 2020, and the transaction is subject to the customary closing conditions. However, this announcement didn’t impress investors, as Tilray was trading down 2.8% today at 2:15 PM EDT.

Innovative Industrial Properties was down by over 13%

Boosted by its impressive second-quarter earnings, Innovative Industrial Properties (IIPR) stock increased 124% YTD through August 29. In the second quarter, the company outperformed analysts’ revenue estimates, while its net profits were in line with analysts’ expectations. However, with the majority of the cannabis stocks trading down, IIPR fell more than 13% today.

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Aurora Cannabis

Today, Aurora Cannabis (ACB) was trading 1.2% lower. However, ACB stock has increased by 8.8% year-to-date through August 29. On August 8, Aurora Cannabis’s management provided better-than-expected guidance for its fourth quarter of fiscal 2019.

The company’s management expects its revenue for the fourth quarter of fiscal 2019 to be 100 million–107 million Canadian dollars. This guidance is significantly higher than the company’s revenues for the third quarter of fiscal 2019.

On August 19, the company completed its acquisition of Hempco Food and Fiber on August 19. All these factors drove Aurora’s stock price.

Canopy Growth

Today, Canopy Growth (WEED) (CGC) was trading 2.2% down. Year-to-date, the company has lost 12.7% of its share value through August 29. It hit a 52-week low of $30.30 on August 28.

On August 14, Canopy Growth reported dismal first-quarter earnings. Since then, the company’s stock has been trending downward. For a closer look at analysts’ opinions of Canopy Growth, please read Canopy Growth: What’s the Word on the Street?


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