This week cannabis stocks closed moderately higher. As of Friday afternoon, the ETFMG Alternative Harvest ETF (MJ) was trading up about 2% from its open on Monday morning.
Next week we are expecting earnings from Aurora Cannabis (ACB) on May 12th. Many issues have plagued ACB from share dilution, falling revenue numbers, and large amounts of goodwill. Despite the issues, ACB remains one of the most traded stocks on Robinhood and Wealthsimple along with being the most popular cannabis stock among millennials. ACB also has a reverse stock split scheduled for a day before earnings which could end badly if the results are less than what the market predicted.
As governments around the world attempt to restart their economies, investors are patiently waiting on cannabis retail outlets to reopen. We could see a rebound in prices for the cannabis sector once retail fully operational and companies have the ability to increase revenues.
Innovative Industrial Properties (IIPR) reports earnings, shares fall
This week Innovative Industrial Properties REIT reported earnings. The company posted an over 200% increase in revenue and net income yet it was not enough to satisfy wall street. The stock traded down in Thursday’s session although recovering some of its losses. IIPR continues to pay a health dividend of $1 per share for Q1 which represents an over 100% increase from the same quarter in 2019. Since the start of the year, IIPR has acquired 8 additional properties and raised over 300 million dollars to fund their acquisition spree. Despite the COVID-19 situation the company seems to be doing very well in these tough economic conditions.
Aphria (APHA) receives another EU GMP certification
This week APHA received its third EU GMP certification on its Malta facility. The company’s ASG facility is a high-capacity EU GMP-certified lab that is well-positioned to become their foundation for testing, research, and development of medical cannabis in Europe. ASG will also provide additional capacity for importing, processing, packaging, and distribution of the Company’s EU-GMP certified cannabis products in Europe. This marks another milestone for APHA as the company continues to execute on its long term international growth strategy.
The Horizons Marijuana Life Sciences ETF (HMMJ) gains on the week
The Horizons Marijuana Life Sciences ETF was supported by Scotts Miracle-Gro and GW Pharmaceuticals as both companies have shown strength despite the bearishness of the sector. HMMJ is one of the most popular cannabis ETFs as it offers diversity among the large-cap cannabis stocks in North America. Betting on one particular company in this environment can be extremely risky and using an ETF life HMMJ can be a great way to capture the overall growth potential of the sector.
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ACB shares were trading at $0.66 per share on Friday afternoon, down $0.03 (-4.35%). Year-to-date, ACB has declined -69.44%, versus a -8.97% rise in the benchmark S&P 500 index during the same period.
About the Author: Aaron Missere
Aaron is an experienced investor who is also the CEO of Departures Capital. His primary focus is on the cannabis industry. He also hosts a weekly show on YouTube about marijuana stocks. Learn more about Aaron’s background, along with links to his most recent articles. More…