Last week, three prominent players in the cannabis sector—Cronos Group (CRON), Aurora Cannabis (ACB), and Canopy Growth (CGC)(WEED)—reported their earnings results. All three companies failed to meet analysts’ revenue expectations. Lower-than-expected cannabis sales and pricing pressure had dragged the cannabis sector down. The ETFMG Alternative Harvest ETF (MJ) and the Horizons Marijuana Life Sciences Index ETF (HMMJ) fell 14.5% and 17.1%, during the same period, respectively.
This weakness in the sector continued today as well. At 1:28 PM ET, MJ was trading 3.6% lower. Meanwhile, HMMJ had fallen by 2.9% at 1:14 PM ET. Let’s look at the cannabis stocks that are in the news today.
HEXO falls over 5%
On November 15, HEXO’s (HEXO) management announced that as soon as it found that Newstrke had cultivated cannabis in an unlicensed block at its Niagara cultivation facility, it stopped the cultivation and informed Health Canada about the incident. HEXO had acquired Newstrike Brand in May 2019. Further, HEXO management stated that Health Canada was satisfied with its corrective actions.
As BNN Bloomberg reported, HEXO’s CEO noted that the tiny part of its cannabis grown at the unlicensed block had entered the market. Along with the weakness in the cannabis sector, the company’s announcement on Friday appears to have caused HEXO stock to fall. At 1:14 PM ET, the company was trading 5.5% lower.
MedMen to lay off 190 people
On Friday, MedMen Enterprises (MMEN)(MMNFF) announced that it would lay off 190 employees and sell some non-core assets to improve profitability. The company is also focusing on lowering its SG&A expenses.
To implement all these measures, MedMen has developed a 90-day program, and it hopes to achieve positive EBITDA by the end of the next year. However, the company’s announcement failed to impress investors. Today, at 1:10, the company was down 20%.
Aurora Cannabis stock falls over 10%
On November 14, Aurora Cannabis reported its first-quarter earnings for fiscal 2020 after the market closed. Although the company’s net profits were better than analysts’ expectations, its revenue failed to meet expectations. Plus, management announced that it would scale down its expansion plans, which led Aurora stock to fall 18.0% on Friday.
Today, the company’s downward momentum also continued. At 1:15 PM ET, Aurora stock was trading 10.6% lower. Following its first-quarter earnings, PI Financials, Cowen and Company, Canaccord Genuity, and Scotiabank have all lowered their price targets for Aurora Cannabis.
Curaleaf opens a new dispensary in Florida
Today Curaleaf Holdings (CURA)(CURLF) announced that on Friday, it opened its 27th dispensary in Florida at Jensen Beach. The dispensary was Jensen Beach’s first medical cannabis center. With 50 dispensaries, Curaleaf has the largest dispensary footprint in the country.
The company’s opening of new dispensary appears to have led the stock to rise 1.2% higher at 1:09 PM ET today. Year-to-date, the company has returned 17.3% as of November 15. Curaleaf is one of few cannabis companies that have delivered positive returns this year. For more marijuana market news and updates, please check out 420 Investor Daily.