Investors interested in the cannabis sector last week watched as CannTrust Holdings Inc (TSX :), (NYSE :), one of the leading marijuana companies, tried to tie its wounds in the midst of an ever-increasing scandal. than 60% of its market capitalization taken away
It's hard to look away from the car wreck that is CannTrust – it's in a confused roadside mess in the aftermath of news that the Ontario-based marijuana grower had deliberately misled Health Canada officials about thousands of plants growing in unlicensed areas in their greenhouse facility in Pelham, Ont. However, looking away can help restore investor confidence in the sector.
This week, investors must focus their attention on a few other figures.
The sale of cannabis oil is on a steep month. -up month up route. That is the headline in the latest statistics from Health Canada, the government department that regulates the marijuana sector in Canada. Sales of cannabis oil increased by 19.2% in May compared to April.
According to statistics, sales of medical oils increased by 19.5% and sales of so-called oils for adults used to improve overall well-being increased by 18.7%.
These figures show support for what is generally believed to be one of the largest cannabis markets in the near future. Cannabinoil, or CBD, is a cannabis derivative that is recommended to have therapeutic properties without the & # 39; high & # 39; to deliver that is obtained with THC, or tetrahydrocannabinol, the psychoactive component of marijuana.
Numbers like these support the outlook for cannabis-soaked edible products and beverages that will be rolled out later this year in Canada and eventually in the US. They will be legal north of the 49th parallel in October and are expected to hit retail markets by mid-December. How they are doing on the Canadian market will be closely monitored as the results will influence what the next steps will be in the legalization of the substance on the large American market.
Italian government signs deal with Aurora
Aurora Cannabis Inc (TSX :), (NYSE :), one of the leading pot producers, expects a new contract with September to sign the Italian government to deliver medicinal cannabis to the European country.
The two-year deal uses a minimum of 400 kilos of cannabis from Aurora facilities in Germany, which are certified for export from the European Union. The weed will be imported into Italy, one of the most strictly regulated markets for medicinal cannabis in the world.
One IPO to view
A cannabis IPO to look at this week is Sundial Growers Inc (NASDAQ :). This Alberta-based cannabis producer will issue 10 million shares on the Nasdaq on Thursday under the "SNDL" ticker at an initial price estimated between US $ 12 and US $ 14, and expects to raise approximately $ 130 million. The company has two growing facilities in Alberta and plans to build a third in British Columbia.
Sundial focuses on medicinal cannabis and wellness category products, including CBD oils intended for women to help them with menstrual cramps, as well as other products to promote "self-care" and reduce stress.
Main income report to view
With various marijuana stocks after a hit in recent weeks, many observers will look at the van Aphria (TSX) :), (NYSE 🙂 after the market closes on Thursday.
Aphria's shares have been falling since the beginning of May. It has lost 35.29% in the past year.
Monday it closed at US $ 5.34 in New York, a decrease of 2.92% on the day and C $ 7.02 on the S & P / TSX Composite, a decrease of 3.04 % on the day.
Based in Leamington, Ont., A small town known as the greenhouse capital of Canada, the company has operations in 10 countries on five continents.
It will be interesting to see how the figures are in line for the fourth quarter. Pure performance may not be sufficient. The company will have to tackle part of the optics.
The company has achieved a top buyer turnover. In May it called a new CEO, James Meiers. It has also appointed new people for different key positions – vice president and chief information security officer. It lost its president, Jakob Ripshtein, last month. Ripshtein was only busy since November. Given the regulatory crisis at CannTrust and the recent expulsion of Bruce Linton as CEO of Canopy Growth Corp. (TSX :), (NYSE 🙂 at the beginning of July following the disappointing report, investors may choose to adopt a wait and see attitude to settle in the executive suites.
Another consideration: the market capitalization of the US $ 1.34 billion has taken a serious quarter last year, but it is still considered one of the big players. But the size of his sales casts a different shadow. Last quarter, Aphria only sold around 2,600 kilos of cannabis. That does not match the output of other players, such as Canopy and Aurora Cannabis, both of which produce nearly 10,000 kilograms. Will it be a producer in the second row in terms of size? It is a legitimate question.
And then there is the guess. In view of the fact that the stock is also underperforming, this week may result in a quick short-term shot. Long-term investors may not be that easy to convince.
