Marijuana News Today
Normally in these marijuana news today columns, I like to examine an industrywide trend that’s taking place, usually on the political or economic side. Today, however, we’re seeing a ton of breaking news stories across multiple pot stocks, so we’re going to dive deeper into these individual stories.
At this point, I’d argue there’s no marijuana stock under more observation than Tilray Inc (NASDAQ:TLRY).
Tilray stock’s miraculous run since hitting the open market has been the talk of the marijuana industry.
The first ever marijuana initial public offering (IPO) on the Nasdaq has risen by 375% in one month and three weeks. That would mean you would have nearly quadrupled your investment had you bought the IPO price in half a season.
This is why so many people are salivating over the marijuana industry and its potential for massive gains. There are definitely some concerns with Tilray stock, but overall the company is looking to be a strong addition to the pot stock market.
That brings us to the latest breaking news out of TLRY stock: the company has signed a deal with Namaste Technologies Inc (OTCMKTS:NXTTF, CVE:N) that would see Tilray sell bulk medical cannabis products to Namaste, which would in turn distribute said products via its e-commerce platform. (Source: “Namaste Signs Cannabis Purchase Agreement With Tilray,” Business Insider, September 7, 2018.)
Chart courtesy of StockCharts.com
This is a big win for Tilray, especially as the company feels the pressure to produce results in order to justify its massive explosion in value.
On the flip side, Namaste Technologies stock finds itself up about four percent in early trading. TLRY stock, meanwhile, is sitting still, up about one percent.
Tilray stock is also recovering after taking flak from a number of analysts. Still, the company has seen growth that investors dream of, and deals like the one signed with Namaste today help solidify the stock’s growth.
Another company that has experienced rapid growth in the past few weeks (although that applies to pretty much every pot stock) is HEXO Corp. (OTCMKTS:HYYDF, TSE:HEXO), formerly Hydropothecary Corp.
HEXO stock is up an impressive 64% over the past month and has climbed nearly nine percent in early morning trading today.
HEXO stock made big waves earlier in the year when it announced that it had signed a deal with Molson Coors Brewing Co (NYSE:TAP). These “big alcohol” partnerships are highly sought after. HEXO being able to land one helped separate it from the pack and bolster stock value.
In today’s news, a New York investment firm published a letter that it sent to HEXO’s board demanding that the company boost its stock value.
In fact, the firm, Riposte Capital, went as far as to call HEXO stock undervalued; this is not something you hear all that often in the marijuana industry (even if there are many stocks that are undervalued if you take the global scale of the sector into account).
Chart courtesy of StockCharts.com
The argument for HEXO stock made by Riposte is pretty compelling; it cites the $1.0-billion supply agreement with Quebec, Canada’s second-largest province, as well as the deal with Molson mentioned above, and finally mentions HEXO’s rather stellar financial situation.
In an industry where valuations will have to wait for some time until revenue catches up, HEXO stock has one of the strongest balance sheets around, with cash equal to more than 20% of the company’s market cap.
Consider Tilray stock above, which showed revenue of about $10.0 million on its latest financial earnings report while maintaining a market cap of about $7.5 billion, with nowhere near 20% of that in cash on hand.
“Our management team is continuously evaluating incoming offers and acquisition opportunities,” said Sébastien St-Louis, co-founder and chief executive of HEXO. “We look forward to revealing our plans to move into the international market and to list on a major U.S. stock exchange in the near future.” (Source: “U.S. shareholder presses pot firm HEXO to boost stock price or sell,” The Globe and Mail, September 6, 2018.)
Listing on a major U.S. exchange would be a huge help to HEXO stock, and I largely agree with Riposte’s assessment that HEXO Corp is one of the best companies around for those looking for the most concrete value with their marijuana investment, rather than buying potential.
In any case, HEXO stock was boosted by this letter, climbing seven percent in early morning trading.
Both HEXO and Tilray are among the hottest stocks in the industry—and almost for the exact opposite reasons.
Tilray stock has been the beneficiary of being in the public spotlight and being the target of millions in U.S. investment due to its position on the Nasdaq. HEXO, meanwhile, has established itself as a reliable and strong marijuana stock with a ton of hidden value that has yet to receive a massive influx of investment due to its under-the-radar status.
Both have exciting prospects for the future, and both have the potential for big gains.