Why Cannabis Stocks Are Trending Down Today

Rajiv  Nanjapla - Author

Nov. 26 2019, Published 3:37 p.m. ET

Today, the cannabis sector was trading in the red despite the broader US equity market trading in the green. The cannabis ETFs, the ETFMG Alternative Harvest ETF (MJ) and the Horizons Marijuana Life Sciences Index ETF (HMMJ), were down 1.6% and 2.3% as of 1:33 PM ET.

Meanwhile, both the S&P 500 Index and the Dow Jones Industrial Average were trading 0.1% higher. Investors’ optimism over progress in the US–China trade deal appears to have led the broader equity market to rise. Let’s look now at the cannabis stocks that are in the news today.

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Organigram falls more than 4%

Yesterday, Organigram Holdings (OGI) reported lower-than-expected fourth-quarter earnings. The company had missed both analysts’ revenue and adjusted EBITDA estimates. The weak third-quarter performance had caused the company’s stock to fall 3.1% yesterday. Today, the company was trading 4.4% lower at 1:19 PM ET.

Following its third-quarter earnings, Haywood and Cormark Securities lowered their price targets for OGI. Haywood cut its PT from 8 Canadian dollars to 7.5 Canadian dollars, while Cormark reduced its price target from 10 Canadian dollars to 4.5 Canadian dollars. Analysts’ price cuts could have caused the stock price to fall.

Cresco terminates its acquisition agreement

Today, Cresco Labs (CL)(CRLBF) announced that it had terminated its acquisition agreement with VidaCann. On March 18, 2019, Cresco had announced to acquire VidaCann. Further, the company stated that it had signed an agreement to sell and leaseback two of its properties located in Ohio and Michigan to Innovative Industrial Properties (IIPR) for approximately $38 million.

These announcements failed to impress investors, though. The stock was trading 0.9% lower today at 1:11 PM ET.

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TGOD stock tanks

Today, The Green Organic Dutchman Holdings (TGOD)(TGODF) announced that a group of underwriters headed by Canaccord Genuity has agreed to buy 29,334,000 units of TGOD for 22 million Canadian dollars. Each unit will include one common share and a warrant to purchase one-half of the common share. Underwriters will also have the option to buy additional 4,400,100 units for a price of 0.75 Canadian dollars per unit, which would generate additional proceeds of 3.3 million Canadian dollars.

These units will be available by filling a short form prospectus. Investors’ concerns over the dilution appear to have caused the company’s stock to fall 17.4% today, as of 1:20 PM ET.

HEXO falls over 7%

As of yesterday, HEXO (HEXO) has lost 37.8% of its stock value. The withdrawal of its fiscal 2020 guidance, analysts’ downgrade, and the abrupt resignation of its CFO could have caused the stock to fall. Today, the company was trading 7.5% lower at 1:20 PM ET. The weakness in the cannabis sector could have led the company’s stock to fall.

For more on cannabis news, please see 420 Investor Daily.


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