Shares of cannabis grower Cronos Group (NASDAQ 🙂 (TSX 🙂 closed last week, despite a worse-than-expected first quarter.
The Canada-based marijuana company missed expectations when it made its last profit last Friday for the three-month period ending March 31.
Despite a 50% increase in sales, reaching $ 12.6 million, the company recorded a disappointing adjusted EBITDA loss of $ 37.1 million.
The company's cash balance has been kept healthy at $ 1.02 billion. But that figure is still 9% lower than last year's level.
Investors may soon be wondering why Cronos is unable to keep up with the global cannabis market – and the US market in particular – growing?
Looking Beyond Tilray Merger
After shareholders formally confirmed the merger of Tilray (NASDAQ 🙂 and Aphria last week, Tilray's stock fell significantly. But the downward trajectory made an impressive turnaround last Friday.
Tilray shares went from a low of about $ 13.89 last Thursday to a high of about $ 16.98 last Friday. But after hitting that peak, stocks lost some of those gains. They finished the week at around $ 16.16.
They slipped again this week, down another 7% from yesterday.
Last week's jump was likely a response to analyst optimism for the newly minted "largest cannabis company in the world". Jefferies analyst Owen Bennett took renewed interest in the marijuana grower who issued a 'buy' rating and set an aggressive $ 23 target price, pushing the stock up nearly 50%.
With the delay behind the merger, the Tilray company will publish its latest earnings report next week and is Jefferies' number one choice in the cannabis industry.
According to published reports, Bennett said he predicts that Tilray could potentially triple his revenues in the coming year. And that's before the US takes steps to legalize cannabis at the federal level.
All eyes are now on how the newly merged company, now trading both in Canada and under the TLRY ticker. It is poised to bypass the fact that it has only been identified as a Canada-based company and rise to the challenge of a global player.
The company's new CEO, Irwin Simon, made that intention clear when he made a statement to the media last week. Simon said:
“Today, Tilray has a footprint all over the world. We participate in a $ 100 billion category with tremendous growth opportunities for our brands and the categories in which we participate. "
The new company has offices in all corners of the world, including Australia, Germany and US interests.
Said an analyst from Stifel, according to media reports:
"Tilray is currently best positioned to leverage a leading Canadian market position to capture the global growth of the cannabis category."
Find some of that growth in the fast-growing CBD space.
In the past year, the Tilray stock has increased more than 105%.
Trulieve Gets Hop On Merger Bandwagon
Florida-based cannabis company Trulieve Cannabis (OTC 🙂 (CSE 🙂 announced its own merger agreement on Monday, with which this successful multi-state operator has been transformed into a national player with a broader operational footprint and positioning to take full advantage of US legalization.
Trulieve acquires Arizona-based Harvest Health (OTC 🙂 (CSE :), a vertically integrated multi-state cannabis company. The stock acquisition represents a $ 2.1 billion deal, making it the largest merger between US operators.
“This combination allows us to leverage our respective strong foundations and drive us forward with an unparalleled platform for future growth. Trulieve CEO Kim Rivers said in a statement released by the company.
Trulieve's stock closed 5.65% yesterday at $ 38.61. In the past year, the stock is just over 292%
Shares of Harvest Health rose just over 12% yesterday to $ 4.01, and has risen just below 210% over the past year.
