5 Sep

Cannabis Roundup: WEED, ACB, ACRGF, and CTST

WRITTEN BY Rajiv Nanjapla

Today, the US stock market rose in reaction to the news that the US and China plan to revive trade talks in early October. The S&P 500 Index was up about 1.3% at 2:05 PM EDT. The majority of the cannabis players were trading in the green today. The ETFMG Alternative Harvest ETF (MJ) and the Horizons Marijuana Life Sciences Index ETF (HMMJ) rose 3.5% and 3.2%, respectively.

Canopy Growth was up 5.5%

Yesterday, at the Barclays 2019 Global Consumer Staples Conference, Canopy Growth (CGC) (WEED) CFO Mike Lee spoke favorably about the company’s future. For additional details, please read Canopy Growth: Key Takeaways from Its Investor Call.

Lee’s optimism appears to have led the company’s stock to rise over 5.5% today. However, the company’s stock has lost 11.1% YTD through September 4. This lower-than-expected performance in the fourth quarter of fiscal 2019 and the first quarter of fiscal 2020 led to a fall in Canopy Growth’s stock price.

Aurora Cannabis

On September 4, Aurora Cannabis (ACB) announced that it sold its remaining 28,833,334 shares of The Green Organic Dutchman Holdings (TGOD) for 86.5 million Canadian dollars. After the sale, Aurora Cannabis doesn’t hold any shares of TGOD. However, it owns warrants to acquire 16,666,667 shares.

The sale of these TGOD shares delivered Aurora Cannabis an impressive internal rate of return of 50%. In the related press release, Aurora Cannabis CEO Terry Booth stated that the acquisition of Whistler Medical Marijuana Corporation made TGOD less important to Aurora’s core strategy. Today, ACB was trading 2.7% higher. Year-to-date, the company delivered returns of 9.1% through September 4.

Acreage Holdings up by 10.7%

Until yesterday, Acreage Holdings (ACRGF) had lost 62.7% of its share value this year. The company had posted dismal second-quarter earnings on August 13. You can read more on Acreage’s second-quarter performance in Key Takeaways from Acreage Holdings’ Q2 Earnings.

However, the company was trading over 10.7% higher today at 2:05 PM EDT. The optimism across the broader equity market appears to have led Acreage’s stock price to rise. Earlier this year, Canopy Growth had acquired the option to buy 100% of Acreage Holdings. However, the deal is subject to the legalization of cannabis at the federal level.

CannTrust Holdings

With the broader equity trading in the green, CannTrust Holdings (CTST) traded 7.9% higher today. The company’s stock had lost 67.1% of its share value this year through September 4. The recent regulatory issues with Health Canada appear to have led to a fall in its stock price.

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