This Week in Cannabis Investing January 17th

This Week in Cannabis Investing January 17th

It was another busy week in the world of cannabis investing. We had significant corporate updates from several companies and earnings news from others. With a number of cannabis companies now trending higher, we’re also spending more time tracking these rising marijuana stocks.

Monday, we began the week by covering some significant cannabis biopharma news. Tetra Bio-Pharma (CAN:TBP / US:TBPMF) has received further guidance from the FDA on getting its cannabinoid pain drug to market. The latest Letter of Advice goes past previous guidance and “lays out the requirements for marketing approval”.

The global pain market is huge (US$130 billion by 2023) and because of their very benign safety profile, cannabinoid-based pain medications stand to claim much of this market share.

Also on Monday, we covered Canada’s new cannabis retailing leader, Fire & Flower Holdings (CAN:FAF / US:FFLWF). Fire & Flower is now up to 46 Canadian cannabis retail stores, including a string of additional store-openings in Alberta.

The market has been taking notice. Since bottoming in November 2019 at CAD$0.75, FAF has risen a solid 39%. The Seed Investor continues to like Canadian cannabis retailers.

Tuesday, the news wasn’t quite as good for major Canadian LP, Aphria Inc (US:APHA / CAN:APHA). Aphria produced its third straight quarter of positive EBITDA. But the company missed on revenue expectations in fiscal Q2 2020 at CAD$120.6 million. That was a slight dip from CAD$126.1 million in the prior quarter.

CEO Irwin Simon cited continued weakness in Ontario cannabis retail as well as delays in the rollout of Cannabis 2.0 products. The stock took a minor hit but is already recovering.

Then we took another look at Canadian cannabis retail. This time we asked the question: what is the best value in Canadian cannabis retail at the moment? We singled out Choom Holdings (CAN:CHOO / US:CHOOF).

Choom is a rising multi-province Canadian cannabis retailer. Like fellow retailers, Fire & Flower and Meta Growth (CAN:META / US:NACNF), Choom’s stock has made a significant move off its November. We see it as a slightly stronger value proposition for investors at present.

Thursday, we zeroed in on the Big Dogs in the cannabis space, the industry leaders in the U.S. and Canada. U.S.-based MSO Curaleaf Holdings (CAN:CURA / US:CURLF) and Canadian pot giant Canopy Growth (US:CGC / CAN:WEED) have both been powering higher since hitting their own November bottoms.

Curaleaf has now rallied by 64%. Canopy Growth has pushed even farther off its bottom, up 83%. We asked the question: is the rally in these industry leaders a signal of a general rally coming for marijuana stocks?

Later on Thursday, we reported on Eastern Canada LP, Organigram Holdings (US:OGI / CAN:OGI). Organigram jumped by 45% on Tuesday after reporting revenue that beat expectations. However, looking at the flat revenue picture over the past two quarters, we’re a little more skeptical at present.

Friday, The Seed Investor was shining the spotlight on yet more vacuous anti-cannabis propaganda – masquerading as science. Bogus research produced at a Quebec university made the claim that cannabis supposedly creates an increased risk of suicide/depression among teenagers.

We poked holes in this laughable pseudo-science. Unfortunately, based on Chicken Little propaganda like this, Quebec’s anti-cannabis provincial government has imposed the most restrictive cannabis regulations in Canada.

That was our coverage for this week. Next week, among other things, we will be looking aiming more criticism at the FDA over its failure to properly regulate CBD. And we will be adding a progress report as Cannabis 2.0 ramps up in Canada.

DISCLOSURE: Choom Holdings is a client of The Seed Investor.

Published at Fri, 17 Jan 2020 19:00:07 +0000