Marijuana News Today
The marijuana news today has us facing another down day in the market as stocks across the board plummeted, while Aurora Cannabis Inc (NYSE:ACB) was able to mitigate the losses with its impressive quarterly report.
Pot stocks fell after what was a decent bump last week following the resignation of Jeff Sessions as U.S. attorney general.
The drug crusader was long considered a threat to the future of the marijuana industry so long as he helmed the top law enforcement agency in the country.
With his departure, marijuana enthusiasts can breathe a little easier now as it is unlikely that his replacement will pursue marijuana prohibition with anywhere near the same verve and dedication.
But that bump has melted away, with a market-wide drawback taking its place.
In the marijuana news today, we’re going to take a look at several key marijuana stocks and their movement on the market.
The company making the most waves this morning is Aurora Cannabis.
ACB stock started the day on an upswing, gaining as much as four percent in early-morning trading.
Those gains, however, were short-lived as the market pullback brought the company low.
Although Aurora stock fell about three percent by late morning, other marijuana stocks have taken harder falls to start the day.
Aurora Cannabis’s impressive Q1 numbers (featured below) likely helped mitigate some of that damage.
- Revenue: $29.7 million, +260% year-over-year (YoY)
- Profit: $104.2 million, +2,826% YoY
- Gross margin on cannabis: 70%, +12% YoY
- Total kilogram equivalents sold: 2.68 million, +201% YoY
- Production run rate early in 2019: 150,000 kilograms per year
“The commencement of adult consumer use sales in Canada has been very successful for Aurora, with strong performance across all product categories and brands,” said CEO Terry Booth. (Source: “The marijuana producer Aurora Cannabis jumps after posting huge growth (ACB),” Business Insider, November 12, 2018.)
While ACB stock’s three-percent dip is far from ideal, compared to the day that Aphria Inc (NYSE:APHA) is having, it almost seems like a win.
APHA stock dropped about eight percent in early-morning trading, and this is coming on the back of what was a rather successful past few days for the company.
First, the company completed an all-cash deal with CC Pharma GmbH in Germany, worth CA$36.7 million, with another CA$35.0 million earn-out to be paid following closing.
This move will help expand the company’s burgeoning operations in the German medical marijuana market.
The move is in keeping with Aphria stock’s overall goals to be a global powerhouse in pot.
The company is also seeking a partner to begin working on cannabis-infused beverages, but it wanted it to be clear that this partner needed to be a globally-minded one.
“When Aphria makes the ultimate decision to get into bed with a strategic partner, we want to make sure that they bring the brands that we can leverage together with who we are, what our vision is, and our science,” said Aphria Chairman and CEO Vic Neufeld. (Source: “‘That’s the real home run’: Aphria seeking beverage partner with global reach,” Bloomberg, November 8, 2018.)
“We are very desirous, if I could say that. We’ve had conversations with many entities and beverage is part of it,” he continued, addressing a report that Steam Whistle Brewing was in search of a cannabis partner.
I am strongly encouraged by APHA stock’s long-term plans, but the company has simply not been able to hold on to substantial gains for nearly all of 2018.
Even when the market shifted upward, APHA stock seemed to be a bit of laggard, trailing behind its faster-growing competitors.
While a cannabis-infused beverage deal could radically alter the future of APHA stock, the company appears to be too volatile at the moment to forge any confident outlooks, making it a very risky prospect.
Yet another company that is taking a hit this morning is Canopy Growth Corp (NYSE:CGC).
While its losses were rather modest—at about three percent—the company has seen virtually all of its gains over the past five days wiped out, with CGC stock down about six percent over that time.
Canopy Growth stock hasn’t made any headlines of late that would help spur its growth—or the growth of the industry as a whole, for that matter.
Remember that it is often CGC stock that leads the charge for those massive upswings in value on the pot stock market, usually on the back of a huge investment directed its way.
There are no rumblings of an incoming deal, making me feel like the last two weeks were outliers and the industry may once again return to a pullback, likely forming into a prolonged correction when all is said and done.
At last, we come to Tilray Inc (NASDAQ:TLRY) which, of all the marijuana stocks featured in this piece, is having the best performance to start the week.
Tilray stock is up just a hair at a fraction of a percent. Still, considering others like APHA stock are down eight percent to start the day, that’s a win.
Tilray stock is the beneficiary—perhaps the biggest one—of the Jeff Sessions resignation.
Due to the company being the first to have its initial public offering (IPO) on the Nasdaq, there has always been a special place in American investors’ minds for TLRY stock. As such, the company often benefits more from U.S. news featuring marijuana.
But it also makes Tilray stock one of the most volatile picks around. The massive swings in value of TLRY stock make it harder to recommend as a long-term purchase by virtue of these unpredictable swings.
Still, for investors who don’t mind the risk, Tilray stock does offer some potential for growth. It just doesn’t have the same kind of room to grow in the future as its competitors due to its massive value burst when it first stepped on the scene.
ACB, APHA, TLRY, and CGC Stock Performances
The ACB stock (black line), APHA stock (blue line), CGC stock (red line), and TLRY stock (green line) performances from the past week are seen on the chart below:
Chart courtesy of StockCharts.com
The marijuana stock market pullback isn’t quite done, as we’re seeing in the marijuana news today.
While gains over the last two weeks did spark some hope that this would be a shorter correction, it appears that those positive moves were outliers as the industry settles in for a downturn.
While this will not last forever, the marijuana industry has been known to enter long periods of dormancy. The upshot is that these corrections often give way to massive gains across the industry when they abate.