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Cannabis Roundup: WEED, ACB, OGI, and APHA

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On September 30, CNBC reported that a Treasury official had clarified that the Trump administration wasn’t considering restricting US investments in China. The clarification appears to have come as a relief to the broader US equity markets. Today, at 1:55 PM ET, the S&P 500 Index and the Dow Jones Industrial Average were up 0.7% and 0.6%, respectively. However, the weakness in the cannabis sector continued.

The ETFMG Alternative Harvest ETF and the Horizons Marijuana Life Sciences Index ETF were down 3.0% and 3.6%, respectively, at 1:55 PM ET.

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WEED and ACB fall over 4.0%

Last week, MarketWatch reported that research from Jane Technologies indicated a fall of 15% in vape market share in the first week of September. On September 27, Reuters reported that US public health officials had recommended people not use e-cigarettes that contain THC.

Last week, Canopy Growth (WEED) (CGC) also announced its introduction of vape products into the Canadian market this December. Aurora Cannabis (ACB) has also partnered with PAX Labs to launch a portfolio of vape products. It seems like the report of a decline in vape sales and US health officials’ recommendations have dragged the stock prices of both Canopy Growth and Aurora Cannabis down. At 1:55 PM ET, Canopy and Aurora were down 4.5% and 4.7%, respectively.

On September 27, Bank of America downgraded Canopy from “buy” to “hold” and lowered its price target from $46 to $27. YTD (year-to-date), the stock has fallen 13.8% as of September 27.

Aurora has lost 9.7% of its stock value this year. The company’s stock price has been under pressure since its announcement of lower-than-expected fourth-quarter revenue on September 11. To learn more about analysts’ ratings, read Aurora Cannabis: Analysts’ Target Price after Its Earnings.

OGI trades in the red

During its third-quarter earnings results, OrganiGram Holdings (OGI) announced that it was preparing for the second phase of legalization in Canada. Its management stated that initially, it would be focusing on vaporizer pens and edible products in the derivative products space. The report of a decline in vape sales appears to have led to a fall in the company’s stock price. Today, at 1:55 PM ET, OrganiGram was down 5.0%. YTD, the company’s returns were flat as of September 27.

Aphria stock falls over 4.7%

In June, Aphria announced a partnership with PAX Labs to introduce vape products for both recreational and medical purposes. Aphria expects vape and concentrates sales to form 30% of the entire Canadian adult-use market by 2021. US public health officials’ recommendations and a decline in vape sales appear to have led to a fall in Aphria’s stock price.

At 1:55 PM, Aphria was down 4.7%. On August 1, Aphria reported better-than-expected fourth-quarter earnings results, which led to a rise in its stock price.

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