Cannabis Sector Stumbles after Last Week’s Respite



After an impressive performance last week, the cannabis sector is trading in the red today. Last week, investors’ excitement over the House Judiciary Committee’s clearing legislation to legalize cannabis at the federal level drove the cannabis sector. The ETFMG Alternative Harvest ETF (MJ) and the Horizons Marijuana Life Sciences Index ETF (HMMJ) rose 4.5% and 6.0%, respectively.

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Cannabis sector is down today

Today, both MJ and HMMJ were down 0.6% and 1.9%, respectively, at 1:35 PM ET. However, the S&P 500 Index was up 0.5%. Today, CNBC reported that Goldman Sachs had told a client that the US bull market would continue in 2020. The Goldman Sachs announcement and the expectation of a trade deal falling in place appear to have led the US broader equity market up. Now that we’ve looked at a broader perspective, let’s look at the cannabis stocks that are in the news today.

OrganiGram reports fourth-quarter earnings

Today, Organigram Holdings (OGI) reported its fiscal 2019 fourth-quarter earnings results for the quarter that ended on August 31, 2019. The company reported revenue of 16.3 million Canadian dollars, lower than analysts’ estimate of 21.1 million Canadian dollars. Its net losses were 22.5 million Canadian dollars, higher than analysts’ estimate. The company’s management blamed the slower opening of new stores in Ontario and an inadequate retail network for its lower revenue. Its weak fourth-quarter performance appears to have caused it to fall 2.6% today as of 1:24 PM ET.

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Canopy Growth is in the green

Today, Canopy Growth (CGC) (WEED) announced that it had received an operating and secure storage license from Health Canada for its beverage facility. The beverage facility at the company’s headquarters in Smiths Falls spans 150,000 square feet. The company plans to produce 11 infused beverage products in the first stage, and it has plans to add more products going forward.

Canopy’s announcement appears to have led its stock price to rise. At 1:24 PM ET, it was up 0.9%. Last week, Bank of America upgraded it to “buy.” For more info, read Bank of America Upgrades Canopy Growth to ‘Buy.’

Aurora falls over 6.0%

On November 14, Aurora Cannabis (ACB) announced an early conversion privilege for holders of debentures worth 230 million Canadian dollars with a due date of March 9, 2020. Today, the company’s management announced that 99% of debenture holders had agreed to convert their debenture to stock.

The company announced an early conversion price of 3.2837 Canadian dollars, which resulted in the issuance of 69,135,117 common shares. The dilution appears to have caused its stock to fall. At 1:25 PM ET, Aurora stock was down 6.7%. Read more about the company’s medical operations in ACB Focuses on Medical Marijuana Opportunities.

HEXO rises over 4.0%

As of November 24, HEXO (HEXO) had lost 39.5% of its stock value. The abrupt resignation of its CFO, the withdrawal of its fiscal 2020 guidance, and analyst downgrades may have caused its stock to fall. However, today, the company was up 4.4% as of 1:24 PM ET. The steep fall in its stock price could have prompted investors to perceive it as oversold, leading to a rise in its price.

Check out 420 Investor Daily for more cannabis-related news.


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