Tag: cannabis

  • Cannabis Stocks Could Bounce in 2020

    Cannabis Stocks Could Bounce in 2020

    Cannabis Stocks Could Bounce in 2020
    Cannabis is now legal in many countries and their number will increase. Public support for cannabis legalization is undoubted. That all can provide cannabis stocks to jump in 2020.

    Even though the cannabis sector gets knocked down almost on a daily base, some pot cannabis stocks could bounce in 2020. Yes, Canadian sales missed expectations after the legalization of recreational use of cannabis and remained to stay limited globally.
    But the Canadian sector could have a great stimulus in 2020 with the Cannabis 2.0 rollout. Also, the retail store number increase is one of the trump cards. For example, Canopy Growth plans to open 40 retail stores a month during 2020 in Ontario. Great plan, indeed but will the government really open up the market to such a huge development?
    The stock market wasn’t good in 2019 for cannabis stocks, and investors have to look at the chances of beaten-down stocks. But we truly believe that some of the cannabis stocks could bounce in 2020.

    One of them is the Cronos Group (CRON)

    The Cronos Group missed out on revenue estimates for Q3. It was $1.3 million lower. The stock followed the company’s “success”, it also has dropped and hit the new lows.

    The important fact is the company still grew revenues gradually generated $29.4 million in revenues for the last nine months. Also, the company raised up the production but investors didn’t see the benefit from that. Actually, they were very disappointed by the fact that Cronos sold 8x the kilogram in September but at half the net revenue per gram. But the company ended the third quarter with $1.14 billion on the balance sheet while the company’s value was $0.7 billion. So, this cash flow is Cronos’ main advantage.

    It gives the company an opportunity to invest further while the majority of the rivals don’t have such a possibility. CRON has an optimistic Buy consensus rating from Wall Street. Moreover, the average analyst price target is $13.45 and the last closing price was at $7.14.

    Tilray (TLRY) Cannabis Stocks Could Bounce

    Tilray is one of the most popular cannabis companies in the world. The popularity came from an unusual event after its IPO. What happened? The crazy prices followed the IPO with the stock price over $300 shortly after IPO.
    Tilray was the first cannabis company in history to list directly on one of the major US exchanges at $17 per share. Only a few weeks later, the stock price hit the insane price of $300 per share. It was the hottest IPO in 2018. 

    But the year after…

    The average net selling price per gram dropped to $3.25 last Q3, the prior price was $6.21. A gross margin of 31%, the adjusted EBITDA loss of $23.5 million, and only $122 million in cash are weak results.
    But Tilray appears well-positioned in combination with the InBev JV which may be catalysts in 2020 and make these cannabis stocks could bounce.

    The 2020 revenue estimates are only at $316 million but the stock has picked analysts’ optimism. They forecast a possible upside of over 40% and the stock price at $29.57. There is hope for Tilray.

    OrganiGram (OGI)

    OrganiGram Holdings is down from the high above $8 in May it falls to $2.5 on December, 24 but it is 1.62% more than the previous close price.

    The day before, the company announced the first of its ‘Cannabis 2.0’ products have been released. Trailblazer Spark, Flicker, and Glow 510-thread Torch vape cartridges, filled with C0₂-extracted cannabis concentrate oil and botanical terpene. 

    Some unpleasant events occurred before this announcement.

    For the quarter ended in June, OrganiGram generated revenues of $24.8 million. Everyone was expecting a great year. Instead, shipments fail to $20.0 million, the company was faced with $3.7 million in provisions, and the company forecasts revenues of only $16.3 million. The EBITDA profits were shifting into the loss.

    Now, OrganiGram could raise more cash.

    That’s the reason why the stock has a ‘Strong Buy’ rating. Analysts are predicting an upside potential of 225% from the current price of $2.5.

    Bottom line 

    Why Traders Paradise is so sure that any cannabis stocks could bounce in 2020?

    First of all, cannabis sales will increase.
    Cannabis is now legal in more-than-ever countries and their number will increase. Some experts state that the cannabis industry has the potential to advance to $130 million per year soon. This isn’t likely to happen in  2020, but this number figure out how fast the industry is growing.

    Public support for cannabis legalization is undoubted. The public is more aware of the potential benefits of cannabis. Also, we can expect new strains of cannabis. Moreover, cannabis-infused products will become more broadly available, and some of these products will be produced by companies that are well-known in the drink industry. For example, Molson-Coors and Coca-Cola both are considering to produce drinks with CBD.

    Experts found that cannabis can have important benefits for people’s general health. For example, cannabis can potentially lower cancer risk. Moreover, cannabis is much safer than alcohol. Right?

    All this put together, the cannabis stock could easily bounce in the year ahead.

  • Cannabis Stocks Are Not All Equal For FDA

    Cannabis Stocks Are Not All Equal For FDA

    Cannabis Stocks Are Not All Equal For FDA
    FDA sent numerous warnings about the CBD, substance found in cannabis.
    The stock prices of important cannabis stocks are dropping on a new warning from the FDA.

    By Guy Avtalyon

    Cannabis stocks are under attack. On Tuesday the US Food and Drug Administration (FDA) published new guidance on CBD. FDA notified that CBD can cause liver damage and also, some other injuries might be caused by using CBD.

    This information caused blast to the medical cannabis producers especially among those publicly listed on markets. Those companies have plans, they are investing in development, researching, and have licenses. We are talking about Canadian producers and their investors that were looking for the area for selling cannabis products and the US seemed to be that one. And now FDA issued a statement that their products are not safe for humans. Okay, even if it is true, how FDA can explain that GW Pharmaceutical’s CBD products are safe. This isn’t an attack on GW Pharmaceutical, it’s contrary, why other companies are forbidden to make health claims for its products use. 

    The FDA announced late Monday it is pointing on 15 private companies that are illegally selling products with CBD.
    The regulator said, “there is very limited available information about CBD, including about its effects on the body.”

    What is CBD?

    CBD is a non-intoxicating cannabis compound but it lives in regulations’ vacuum. FDA has approved GW Pharmaceutical’s GWPH drug that contains CBD, a drug for the treatment of childhood epilepsy but, FDA told the other producers that they have no permission to include this ingredient to food or drinks. The reasons are already mentioned.

    “Not so fast,” wrote MKM analyst Bill Kirk. “The FDA’s statement includes some balloon-bursting language,” MarketWatch reported.

    Cannabis stocks were crashed again on Tuesday. That was the signal for analysts to make new estimations and to update the previous.

    Cannabis legalization is slow both in Canada and the US. That causes the black market to grow, while the legal companies are struggling to increase revenue and become profitable. Some of them had to cut selling, cancel the agreements, and save the cash for the following days in expectation for the issue to be solved. 

    But investors have different sentiment and the stock prices of these companies are dropping.

    FDA influences the price of cannabis stocks

    The FDA’s update is in line with a note from the regulator’s former commissioner, Scott Gottlieb. He tweeted: “FDA’s actions on CBD show any available pathway – FDA issuing a regulation, new dietary ingredient notification for supplements, or a food additive petition for human or pet food – will require extensive studies and industry data to address serious safety concerns identified by FDA.”

    Extensive studies? Okay. Is there anything that they are working on? If yes, tell them to hurry up, the health benefit is in question. Tell them to have in mind a relief of pain and mental suffering. How about that?
    And, what they were doing for all the time? Haven’t yet find anything about cannabis? So many studies are already done. 

    The most important cannabis stocks trade in CBD products. Some of them were failing in trading after the FDA’s announcement. Canopy Growth fell by a bit more than 1%, and Tilray was falling by 3%. But they are connected to the section. The worse came for Charlotte’s Web which stock was down by almost 8% and we are speaking about the leader in the CBD market. 

    One stock was especially successful on that day. GW Pharmaceuticals was up. 

    Cannabis Stocks Are Not All Equal For FDA
    (The image was taken on Nov 27.)

    Guess, it has FDA approval for selling the CBD products. GW Pharmaceuticals is a unique one. Yes, their stock price was only slightly up, if the rise of 1.62% is slight. But still.
    The FDA said the next step is to make a framework to allow companies that are producing CBD-based goods to deliver them to the market. Oh, yes, they have to wait for clinical trials. Only after that, the market will be opened to them.
    Until then, investors will sell in panic cannabis stocks or hold them till the better times.

     

  • Cannabis earnings – the countdown started

    Cannabis earnings – the countdown started

    The cannabis earnings potential is huge
    The cannabis industry is more than ever in investors focus

    by Gorica Gligorijevic

    Cannabis earnings is promising. This week can be very important for the cannabis industry. The time to post financial results is near. So, we will see their records for the last quarter. Aurora Cannabis is a top producer, but maybe some other marijuana stocks can generate more next year.

    First in line to show the last quarter result are:

    Greenlane Holdings Inc (NASDAQ: GNLN), Medipharm Labs Corp (OTC: MEDIF), and Village Farms International Inc (NASDAQ: VFF) they did it on Monday after the closing bell.

    Today, the results from Tilray Inc (NASDAQ: TLRY) will be shown. It is expected Tilray to record a net loss of 25 cents per share and its revenue to be of $41.11 million. Today also, earnings result from Green Organic Dutchman Holdings Ltd (OTC: TGODF), Acreage Holdings Inc (OTC: ACRGF), and Flower One Holdings Inc (OTC: FLOOF) are coming after the market close.

    On Wednesday, Aug. 14, Aleafia Health Inc (OTC: ALEAF), Jushi Holdings Inc (OTC: JUSHF), and Helix TCS Inc (OTC: HLIX) have to post their earnings reports. They are followed by Canopy Growth Corp (NYSE: CGC) and Trulieve Cannabis Corp (OTC: TCNNF) after the closing bell.

    This is a busy week for cannabis companies. Investors seem ready to reward good companies. The main criterion among investors is the company can gain a profit. But, they are more than ready to punish the ones that don’t.

    Cannabis earnings will rise

    The cannabis industry is a big-money market. With legalization in more countries than it is now the case, it can be one of the most valued markets. I know there will still be the black market and a lot of money will go there, frankly more than in the legal markets. But still, this market could produce more than $250 billion in the next 10 or 12 years, counting the annual average sales, of course.

    That sounds pretty good for long-term investors. So, I feel free to suggest to you some companies to watch in the future.

    As the first Aurora Cannabis as a top producer. 

    It is the most trustworthy cannabis company among millennial investors. This data comes from Robinhood, an online app for investing with over 6 million users. The majority of millennial investors are Robinhood users. That put Aurora to the most-held stock online investment. It is reasonable to expect that millennials will take a bigger part in the world of investment in the future and support legal cannabis growth. It is easy to evaluate the reasons behind investors’ decision to invest in this company.

     

    Aurora is leading the world production of cannabis with an annual production of 150,000 kilos. It plans to reach 625,000 kilos of annual output in 2020. And it isn’t unreasonable. By engaging the full production capacity, Aurora can produce 700,000 kilos of marijuana on the annual range.

    Wall Street anticipates Aurora can be one of the best revenue generators in 2020 and capable to deliver about $518 million in sales per year. 

    The potential of cannabis earnings

    There are not too many pot stocks in the arena that could hit this expectation. But, Wall Street predicted three cannabis stocks able to surpass Aurora Cannabis in 2020.

    Curaleaf Holdings is expected cannabis earnings at $900 million in 2020 sales but with a cash-and-stock deal for Grassroots, which will bring to it about $350 million, let’s say Curaleaf Holdings may generate about $1,250 million.
    Also, pay attention to Cresco Labs, the potential of $715 million sounds good as Canopy Growth with $521 million.

  • Should You Leave Crypto, Get into Cannabis and ‘ Buy high’?

    Should You Leave Crypto, Get into Cannabis and ‘ Buy high’?

    Should You Leave Crypto, Get into Cannabis and 'Buy high'?
    This topic is a small semantic game with words. But it seems to be a serious business.

    By Guy Avtalyon

    I want to be a clear, cannabis business is serious business.

    Marijuana is a commodity, and commodities markets are subject to boom and bust, amazing and caught.

    Canadian marijuana company Aurora Cannabis Inc.’s shares rose about 4% Thursday, October 18, after it said shares have been approved for trading on the New York Stock Exchange starting October 23. Even earlier, the hype around cannabis stocks was catching up to the crypto craze.

    There’s a huge new trend that is sweeping the investment world. The rise in the legalization of marijuana caused the development of a new investment opportunity. Cannabis Shares, for example, allows investors to buy shares in many legal cannabis-based projects, including the sale of cannabis itself, or products of cannabis.

    Merida Captial Partners, a New York investment firm, said its cannabis fund had been approached by around 50 cryptocurrency investors. “They are looking at cannabis and crypto as an emerging sector,” said Merida managing partner Mitch Baruchowitz, “they might not be connected as industries but they are seen as outside the traditional investment field. High risk and high reward.”

    On the market, the stock ACB ( Aurora Cannabis Inc.), +1.40% ACB, +1.40%, will trade under the ticker symbol “ACB”. The shares are also traded on the Toronto Stock Exchange. This news came one day after Canada fully legalized cannabis for adult recreational use, the first G-7 country to do so, and only the second in the world to do so after Uruguay.

    Canada changes the world following the passage of the Cannabis Act on June 19.

    Which country first legalize recreational marijuana?

    Canada became the first industrialized country in the world to legalize recreational marijuana.

    In the process, it opens the door to possibly $5 billion in added annual sales. This industry is already generating from domestic medical weed and exports to foreign countries where medicinal cannabis has been given the green light.

    Finance barons like to turn any commodity into an investment opportunity. This move was inevitable with the international changes in cannabis legislation. But, many are willing to see similarities between cannabis shares and cryptocurrencies. And they starting to worry that the cannabis industry could wipe out the need for crypto-investment.

    Within the stock market, no asset class has been hotter than pot stocks over the past few years. Many of the largest marijuana stocks by market cap have doubled or tripled in value over the past year, and are up by more than 1,000% over the trailing two-year period.

    Why cannabis stocks are so interesting?

    The fundamental lure of marijuana stocks is its impressive sales growth potential. ArcView, a leading cannabis research firm, suggests that North American legal weed sales could grow by 28% between 2018 and 2021. That would lead to almost $25 billion in annual legal cannabis sales.

    And the public all over the world is in favor of marijuana legalization. All major marijuana polls demonstrate strong favorability toward legalization.

    All six-pot stocks have enjoyed outsized gains in the last few months as Canada legalization appears. These pot stocks generate quarterly and annual profit:  Aurora Cannabis Inc. ACB, +1.40% , Cronos Group Inc. CRON, +0.66% was up 3.8%, Canopy Growth Corp. CGC, -3.51% WEED, -2.77%  was up 2.1% and Tilray Inc. TLRY, +2.89%  was up 3.2%. GW Pharmaceuticals Plc GWPH, -1.30%  was down 0.7% and Aphria Health Inc. APH, +0.26%  was up about 2%.

    Why people love cannabis stocks?

    Tilray is a Canadian cannabis firm, one that announced in September that they traded around $6.5 billion worth of shares on United States exchanges, at the same period Amazon, traded around $7.6 billion on the same exchanges. Amazon has a stock 47 times the size of Tilray, therefore, we can truly appreciate the full scale of this as an investment opportunity.

    Some skepticists are suggesting that the crypto craze is coming to an end, but we know that this isn’t the case. Markets are stagnant because of a transition period. Frankly, they should know that the crypto craze hasn’t yet begun. Cannabis shares are more like traditional commodities and traditional stocks, therefore they are more attractive to a high level and institutional investors. Because institutions are investing in them, the level of cash flowing into Cannabis shares is such. Cryptocurrency has not yet penetrated the mainstream and therefore, there can’t be a threat from Cannabis Shares.

    Investment advice website. Proactive Investors has started a dedicated Telegram channel for investors interested in cryptocurrency, the blockchain, and cannabis. The SEC stated: “Fraudsters may try to use media coverage about the legalization of marijuana to promote an investment scam.”

    On the social messaging app Telegram, some cryptocurrency forums, where users trade investing tips and advice on the anonymous network, have now turned their attention to shares in cannabis growers.

     

    Cannabis Stocks vs Bitcoin

    Why should anybody go to think that individual and personal Cannabis Shares investors, couldn’t also invest in cryptocurrencies as both are new and exciting ventures? Overall, it’s not fair to compare the two. They aren’t a threat to each other. A lot of investments can exist side by side. Because Cannabis Shares are big and popular for many reasons, it doesn’t mean people will stop investing in Bitcoin. Yes, their attention may be rerouted, but this will constantly change.

    “Crypto traders I know are getting into pot stocks,” Jeffrey Van de Leemput, founder of investing-education platform Cryptocampus, said in a message, reported Bloomberg. “But I don’t know if that’s a pattern or just coincidence.”

    Who’s been behind the buying of pot stocks? I have a hunch that its investors tend to be young. It’s the millennials.
    There is the potential for marijuana to be traded as a commodity, similar to how corn and other agricultural products are now bought and sold, or as asset-based security, similar to the way mortgages have long been bundled and sold to investors. Who knows, the cannabis futures market might be the largest futures market in the world.

    But Bitcoin has no plan to become mainstream on the market, it isn’t in its nature.

    Going in bitcoin’s favor, retail investors predominantly control the show. The most bitcoin trading occurs on decentralized cryptocurrency exchanges, and institutional investors usually want nothing to do with these decentralized exchanges, bitcoin is driven by the emotions of retail investors, rather than by fundamental reason. And emotions can be the most powerful tool in pushing Bitcoin’s valuations higher.

    Which investment should you buy with your last $50? Cryptocurrency or marijuana stock?  Both of these investment opportunities are like a plane, they are getting everyone on board and they are ready to fly with or without you.