Cannabis Roundup: CTST, CRON, OGI, ACB, and WEED



After rallying yesterday, the US market is marginally up today. At 1:20 PM ET, the S&P 500 Index was up 0.3%, while the Dow Jones Industrial Average was up 0.5%. Cannabis ETFs the ETFMG Alternative Harvest ETF and the Horizons Marijuana Life Sciences Index ETF were up 2.0% and 1.7%, respectively. The majority of cannabis players were trading in the green, but CannTrust was down. Let’s see why.

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CannTrust fell 2.4%

It appears CannTrust Holdings’ (CTST) (TRST) problems aren’t ending anytime soon. Today, citing internal documents and four direct sources familiar with the matter, BNN Bloomberg reported that a CannTrust employee had used seeds from the black market to grow cannabis at the company’s Pelham, Ontario, facility. The article stated that some of these cannabis plants entered the production process and were later sold on the recreational market, causing illegally grown cannabis plants to enter the legal market. The report appears to have led the company’s stock to fall today. At 1:20 PM ET, CannTrust was down 2.4%.

In the last few months, CannTrust has been under pressure due to noncompliance issues. YTD (year-to-date), the company’s stock has fallen 64.7% as of September 5. Today, in a press release, the company’s management announced that it would make its operations and procedures compliant with regulations. Further, the company announced that it would decrease its workforce by 20% as part of these efforts. The majority of these layoffs are in cultivation and customer service support roles. The company expects to save $9 million by removing these employees.

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Cronos completes Redwood Holding Group acquisition

Yesterday, Cronos Group (CRON) announced the completion of its previously announced acquisition of Redwood Holding Group. Redwood produces and sells hemp-derived CBD-infused (cannabidiol) skincare and other consumer products under the brand name Lord Jones. Today, the company was up 3.2% as of 1:20 PM. YTD, Cronos was up 6.6% on September 5. The company reported its second-quarter earnings in August. In the quarter, the company outperformed analysts’ revenue estimates. However, its operating losses were higher than expected, which led its stock price to fall.

OrganiGram Holdings up over 4%

Earlier this week, Oppenheimer initiated coverage on OrganiGram Holdings (OGI) with a “perform” rating. Today’s optimism surrounding the cannabis sector appears to have led OrganiGram stock to rise 4.6% as of 1:20 PM ET.

On July 15, the company reported its third-quarter earnings results. Although the company’s revenue rose 784% year-over-year to 24.8 million Canadian dollars, its revenue fell sequentially from 26.09 million Canadian dollars. Its gross and EBITDA margins were lower than its second-quarter margins. The company’s third-quarter performance appears to have dampened investors’ sentiments. Its stock has fallen 20.5% since the release.

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Aurora Cannabis

After rising 4.7% yesterday, Aurora Cannabis (ACB) continued its upward momentum today as well. The company was up 4.4% at 1:20 PM ET. It sold its remaining stake in the Green Organic Dutchman Holdings for 86.5 million Canadian dollars on September 4. YTD, the company has returned 14.3% and has outperformed its peers. Earlier this month, its management provided better-than-expected earnings guidance for its fourth quarter of fiscal 2019.

Canopy Growth and Acreage Holdings

Today, other cannabis stocks Canopy Growth (CGC) (WEED) and Acreage Holdings (ACRGF) were also trading in the green. At 1:20 PM ET, Canopy and Acreage were up 5.1% and 9.5%, respectively. On September 4, Canopy’s CFO presented at the Barclays 2019 Global Consumer Staples Conference. Read more in Canopy Growth: Key Takeaways from Its Investor Call.


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