Canadian marijuana stocks are still struggling to find momentum. Burr Cronos Group (CRON) has created a rare setup for the struggling sector. So which Canadian is buying marijuana stocks now?
The setup comes after Cronos recently reported mixed quarterly results. Aurora marijuana (ACB) reported much more damage than expected. Canopy Growth (CGC) May 27 reported earnings.
The Canadian cannabis industry has struggled to turn a profit after suffering losses at home amid intense competition and executive error. Optimism about US legitimacy is high. Even if the United States passes full federal legalization, its impact on Canadian pot manufacturers is unclear.
The House has passed the Moore Act, a federal cannabis decriminalization bill. But its path to the Senate is unclear. Meanwhile, Senate Majority Leader Chuck Schumer pushed back the deadline for introducing a separate decriminalization bill from April “before the August holidays”. Rep. Nancy Mess, RS.C., also unveiled a bill to ban marijuana.
Twenty-four U.S. senators, led by Jeff Markle and Jackie Rosen, in a recent letter to lawmakers urged the House and Senate to pass the Safe Banking Act – which would open up banking access to the cannabis industry – in a major bill to strengthen it. Production and supply chain.
But market shares continued to shrink for larger Canadian marijuana stocks Hexo (HEXO), canopy and Tilre (TLRY).
Below we take a look at some of the major marijuana stock trades on major US exchanges.
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Marijuana Stocks and IBD
IBD only has full ratings for marijuana stocks in Canada that trade on major U.S. exchanges. However, it also tracks stocks related to the marijuana industry, e.g. Innovative art features (IIPR), a U.S. cannabis-centric real-estate investment trust.
Marketsmith has limited rating data for some US-based cannabis producers who operate in the legal state, e.g. Curaliff (CURLF), Green Thumb Industries (GTBIF) and Trulive (TCNNF). Those cannabis stock counters and trades in Canada.
Cronos stock chart
Cronos Group stocks have formed a consolidation with a 4.41 entry. Shares are trading at around 3.40.
The stock has a 43 composite rating and an EPS rating of 65 The ratings of other marijuana stocks are also weak
Cronos Group said it lost nine cents per share in the first quarter, in line with expectations. $ 25 million in revenue was above the $ 24 million estimate. The extract used for vapors and edibles in the Canadian entertainment market, along with sales gains in the Israeli medical market, helped in sales.
Jeffrey’s analyst, Wayne Bennett, said in a research note that the investment case for Crones was not about his activities, but about his cash. Altria (MO), which has a 45% stake in Kronos.
“This cash provides the option, and potentially critically, around U.S. exposure and the ability to protect U.S. assets before / or post any favorable U.S. legal changes – which we believe may come soon,” he said.
Cronos has an agreement that allows a subsidiary to acquire a roughly 10.5% stake in Pharmacan, a U.S. multi-state operator, dependent on U.S. federal legalization and regulatory clearance.
Hexo stock chart
Hexo (HEXO) The stock has a weak 2 composite rating of Its EPS rating is the worst-possible 1.
Hexo has cut jobs and tried to cut costs and reduce the debt burden. The company hired a new CEO and a new acting CFO in April. Tilray recently agreed to buy millions of dollars in Hexo’s convertible debt – presumably to give the company a larger stake in Hexo.
Hexo, in its second quarter, reported in March that it had lost about C 690 million.
Canopy Growth Stock Chart
Canopy reported quarterly sales in February that exceeded estimates. The loss per share of the company was as expected.
Marijuana stock analysts attributed the results to strength in its sports nutrition division and said covid-related subsidies are padded margins. But overall revenue has fallen – and net cannabis sales worldwide have fallen by 20%.
Low weed prices and high shipping and warehousing costs, in the ongoing supply-chain crisis, hurt the results. However, the company says that performance is strong among its high-powered buds.
Still, Canopy has pushed back its profit targets. The company has also shaken up its executive branch.
Canopy has a CBD business in the United States, which includes brands such as Martha Stewart. It has finally agreed to buy US cannabis operator Acreage Holdings, California extract maker Jetty Extracts and US food manufacturer Wana Brands.
Canopy Growth Stock has 24 composite ratings and a 56 EPS rating.
Tilray stock chart
In April, Tyler reported third-quarter mixed earnings.
The company merged with Africa last year. It also owns a hemp-granola manufacturer, a craft brewer and a distiller – it also has an agreement with the Hexo agreement that could eventually lead to US cannabis, with the expectation that at least some companies would sell THC cannabis products when federal legalization occurs in the United States. The retailer handed over a stake in Madman’s struggle.
Some marijuana stock analysts have questioned that approach. The stock has a composite rating of 32 and an EPS rating of 68
Aurora Cannabis Stock Chart
Aurora marijuana (ACB), like other marijuana stocks, has experienced pruning and cutbacks. The company lost C 4. 4.72 per share, lower than expected for a 23-cent loss per share. Sales missed expectations, and were lower than in previous quarters and years.
In an effort to reduce costs, Aurora has sold out manufacturing facilities in Canada and abroad in recent months. But in March, it said it had reached an agreement to acquire Thrive Cannabis. That said, the move would further its “premiumization” strategy.
The stock has a 7 composite rating and a 16 EPS rating of
Innovative industrial property stock chart
Innovative industrial property buys property from pot farmers and then leases them out. By doing so, they provide funding for cannabis companies that would otherwise have more difficulty accessing traditional banking services.
Short seller Blue Orca Capital says it has taken a position in the company, citing financial struggles among its tenants as shares sank in April.
“Over the past 18 months, we believe that IPR’s debt book has declined significantly as the sector has become more competitive and IIPR has expanded for low-quality tenants in search of continued growth,” Blue Orca said in a report making the case for its position. .
The IIPR responded by saying that the report contained “numerous false and misleading statements” about the company. And it says the report “shows a fundamental lack of understanding of the flawed and generally commercial real estate, controlled cannabis industry and the simple, easy business model of IIP.”
The company reported mixed first-quarter earnings in May. The stock has a 68 composite rating. Their EPS rating is 96, indicating strong profit growth overall.
Marijuana Industry ETF
In the volatility of marijuana stocks, one way to avoid stock-specific risks is through ETFs. ETFMG Alternative Harvest (MJ) ETF is one such alternative. AdvisorShares Pure Cannabis (YOLO) ETF and Cambria Cannabis ETF (TOKE) others.
Another ETF, AdvisorShares Pure US Cannabis ETF (MSOS), offers investor exposure to US multistate operators, which analysts say has a tough path to profitability.
Are marijuana stocks bought now?
So which marijuana stock is a good buy at the moment? Based on IBD’s analysis, no.
Investors interested in jumping into the sector can buy those stocks when they move into the buy zone.
But overall, IBD’s research shows that investors will be better served by looking for stocks with strong overall ratings close to their height.
See the IBD Stock List and other IBD materials to find dozens of the best stocks to buy or view.
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