The Cannabis Sector Continues Its Disappointing Week

After falling for the first two days this week, the cannabis sector maintained that weakness today. The ETFMG Alternative Harvest ETF (MJ) was down 2.1% as of 1:00 PM ET, while the Cambria Cannabis ETF (TOKE) was down 2.5% at 1:04 PM ET.

What caused the cannabis sector’s fall?

Charlotte’s Web Holdings’ (CWEB) (CWBHF) weak third-quarter performance appears to have dragged the cannabis sector down. Meanwhile, the broader US equity market was trading marginally in the green today, with the S&P 500 Index up 0.2% at 1:04 PM ET.

Let’s look at some cannabis stocks that are in the news.

Cronos Group falls over 6%

On November 12, Cronos Group (CRON) reported its third-quarter earnings results, which missed analysts’ revenue estimates. You can read more about the company’s third-quarter performance in Cronos Group Stock Rose despite Missing Estimates.

Following Cronos’s weak third-quarter release, Cormark Securities, CIBC, and Canaccord Genuity lowered their price targets today. Cormark cut its target from 20 Canadian dollars to 12 Canadian dollars. CIBC lowered its target from 20 Canadian dollars to 17 Canadian dollars, and Canaccord reduced its target from 13 Canadian dollars to 12 Canadian dollars. Analysts’ lowering their price targets looks to have caused Cronos stock to fall today. At 12:45 PM ET, it was down 6.7%.

CWEB posts weak third-quarter earnings

Today, Charlotte’s Web reported a weaker-than-expected third-quarter performance. The company missed both analysts’ revenue and EPS expectations during the quarter. For more on CWEB’s third-quarter performance, read Charlotte’s Web: Q3 Earnings Missed Analysts’ Estimates. Its dismal showing appears to have caused its stock to fall. At 12:45 PM ET, it was down 5.9%.

OrganiGram continues to fall

After falling over 19.5% yesterday, OrganiGram Holdings (OGI) continued its downward momentum today. At 12:46 PM ET, the stock was down 7.3% from its previous day’s closing price. On November 11, OrganiGram’s management provided guidance for its fourth quarter, which was lower than analysts’ expectations. Management’s weak guidance led the stock to fall on November 12. On November 13, Canaccord Genuity cut its price target from 8.50 Canadian dollars to 7 Canadian dollars. Canaccord’s lowering of its price target appears to have caused its stock to fall.

Green Thumb Industries was trading in the green

Amid weakness in the cannabis sector, Green Thumb Industries (GTII) (GTBIF) was up 0.5% today at 12:40 PM ET. On November 12, the company announced that it had sold its cultivation and processing facility in Danville, Pennsylvania, to Innovative Industrial Properties (IIPR). However, GTII leased back the facility in a long-term agreement.

Excluding transaction expenses, IIPR has paid $20.3 million for the facility. Further, IIPR has announced the reimbursement of an additional $19.3 million for specific improvements made by Green Thumb, taking the total transaction value to $39.6 million. The announcement appears to have caused the company’s stock to rise.

On November 14, the sector’s market leaders, Aurora Cannabis (ACB) and Canopy Growth (CGC) (WEED), will report their earnings. For a look at analysts’ expectations, read Why ACB’s Upcoming Earnings Aren’t Exciting Analysts and Why Analysts Seem Pessimistic about CGC’s Earnings. Also check out 420 Investor Daily for more marijuana-related news and updates.