The big rally in cannabis stocks last week didn’t last long. This week ETFMG Alternative Harvest ETF (MJ) has fallen more than 10%.
NYSE Suspends Trading for CannTrust and Commences Delisting Process
The top story in the cannabis sector this week was Canntrust. The company announced on Monday that it would be filing for creditor protection and shares were halted on both the NYSE and the TSX immediately. The company expects to be delisted from the NYSE as they fight for survival. CTST will have 10 days to complete a variety of tasks outlined in the press release which include completing their efforts in hopes of getting their license reinstated.
They will also address the numerous lawsuits against the company. Health Canada has left the company in the dark for many months now and is basically letting them die. The regulatory environment in Canada is extremely harsh, with little to no government support or regard for Canadian jobs. CTST’s fate still lies in the hands of Health Canada, and it might just take a miracle to save them.
Cronos Group (CRON) finally reports Q4 earnings
CRON finally reported earnings this week and the market got to breathe a sigh of relief. Many investors were concerned as to why the company’s fourth-quarter earnings report was taking so long to be released, but it seemed as if it was due to accounting purposes. The company reported a large gain due to the value of the large investment from the Altria group in US dollars due to currency fluctuation. CRON continued to advance on its operations and research and still remains well positioned, with lots of cash going into the rest of 2020. CRON pledged to be much more transparent after this quarter with no further delays expected moving forward.
HEXO (HEXO) falls on $266 million dollar impairment charges
HEXO took a beating after they announced their quarterly earnings which included a 266 million dollar impairment charge. The company hopes that after this quarter the worst is behind them in terms of revaluing their assets and they can focus on becoming a stronger profitable company. They were also pleased to announce that they have expanded their discount product line of cannabis called Original Stash as they fight to combat the black market and take back market share. Investors can only hope that consumers continue to buy cannabis via the online sales channels and HEXO can continue to generate revenues during these tough times.
Aurora Cannabis (ACB) falls back below $1
Despite peeking its head above $1 last week, ACB fell yet again with the overall cannabis sector due to the negative CTST news. Investors are currently focusing on the $1 price range, as that is the minimum requirement for a company to stay listed on the NYSE. ACB is widely held by investors that trade/invest on Robinhood. Robinhood is a broker/dealer with millions of daily users. Investors still patiently wait on ACB to announce a new CEO along with any further news regarding a partnership or potential CGP deal. At these prices, ACB can be viewed as relatively cheap, but with the uncertainty in the markets now, ACB’s lack of cash also makes it a very risky stock to invest at these current times.
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ACB shares fell $0.01 (-1.43%) in after-hours trading Friday. Year-to-date, ACB has declined -62.50%, versus a -22.44% 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…