Cannabis Roundup: STZ, CURLF, MMNFF, and ACB


Oct. 5 2019, Updated 12:41 a.m. ET

Today, the US markets were trading in the green on the expectation of rate cuts. CNBC reported that the probability of a rate cut has increased from yesterday’s 77% on 93.5%.

At 2:22 PM EDT, the S&P 500 Index and the Dow Jones Industrial Average were up by 0.7% and 0.4%, respectively. The cannabis ETFs, the ETFMG Alternative Harvest ETF (MJ) and the Horizons Marijuana Life Sciences Index ETF (HMMJ), were up by 1.9% and 1.7%, respectively. Also, the majority of marijuana stocks were trading in the green today.

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Constellation Brands fell over 5%

Today, Constellation Brands (STZ) reported its second-quarter earnings for fiscal 2020. The company had invested approximately $4 billion in Canopy Growth (CGC) (WEED) for a 35% stake in the company. For the second quarter, STZ incurred a loss of $484.4 million from its investment in Canopy Growth.

The company also lowered its reported EPS guidance for fiscal 2020. All these factors appear to have dragged STZ’s stock price down. At 2:24 PM EDT, STZ was trading 5.2% down from yesterday’s closing price. However, Canopy Growth was trading 2.2% higher today at 2:10 PM EDT.

Yesterday, Canopy Growth announced that it would acquire a majority stake in BioSteel Sports Nutrition. For more on this acquisition, please read Why Canopy Growth Acquired BioSteel Sports Nutrition.

Curaleaf and MedMen were trading in green

Yesterday, the Cato Institute reported the results of its 2019 Welfare, Work, and Wealth Survey. The survey collected responses from 1,700 Americans from March 7 to March 13. The survey’s results indicated that 55% of the respondents favored the decriminalization of cannabis-related crimes.

The survey results appear to have bolstered the US-based cannabis companies. Curaleaf Holdings (CURLF) (CURA), which had increased by 14.5% yesterday, was up 8.4% today at 2:04 PM EDT. MedMen Enterprises (MMNFF) (MMEN) rose 4.7% today following yesterday’s increase of 12.1%.

For analysts’ ratings on Curaleaf and MedMen, please read Curaleaf: Analysts’ Target Price and Ratings and MedMen: Analysts’ Target Price and Ratings.

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Aurora Cannabis up over 4.0%

Today, Aurora Cannabis (ACB) provided an update on the progress of the construction of its various facilities. The company announced that both its Aurora Sun and Aurora Polaris facilities are nearing completion.

The company expects to receive a building occupancy certificate for Aurora Polaris by October 31. All these announcements appear to have increased investors’ confidence. At 2:10 PM EDT, Aurora was trading 3.7% higher.

This year, Aurora had lost 18.0% of its stock value on October 2. The company’s lower-than-expected fourth-quarter revenue led to a fall in the company’s stock price. However, we expect Cannabis 2.0—the second phase of legalization—to drive Aurora’s stock. For more on this initiative, please read Cannabis 2.0: Aurora Cannabis Gears Up for Edibles Market.


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