The Week In Cannabis: Stocks Down Amid Earnings Season, Argentina Regulates Medical Marijuana

Cannabis stocks were back in the red this week, retreating from post-election highs amid an earnings-heavy period.

Over the five trading days of the week:

  • The ETFMG Alternative Harvest ETF MJ: lost 5.2%
  • The AdvisorShares Pure Cannabis ETF YOLO: was down 1.5%
  • The Cannabis ETF THCX: tumbled 4.6%
  • The Amplify Seymour Cannabis ETF CNBS: slipped 2%
  • The SPDR S&P 500 ETF Trust SPY was up 2%.

As the dust settles after Election Day, marijuana regulators have taken steps to implement cannabis policy changes. According to Marijuana Moment, a group comprised of representatives from 19 states confirmed Thursday the formation of an independent organization to support the cause. The Cannabis Regulators Association (CANNRA) has, up until now, remained reserved on the issue of legalization. However, the group believes it can “inform regulatory best practices,” citing experience managing marijuana programs.

Voters across Arizona, Mississippi, New Jersey, Montana, and South Dakota passed cannabis legalization initiatives. The next step is reaching out to regulators from places that apply similar systems, CANNRA noted.

Also, the Argentine government has modified regulations for Law 27,350 on the medicinal use of marijuana.

Published in the Official Gazette, Decree 883/2020 authorizes the self-cultivation or “controlled solidary cultivation” for those who previously register in the Cannabis Program Registry (Reprocann). In addition, it acknowledges that "it is imperative to create a regulatory framework that allows timely, safe and inclusive access and protection for those who need to use cannabis as a therapeutic tool."

The new set of regulations also notes how, currently, legal and bureaucratic restrictions regarding access to cannabis oil and its derivatives are far too stringent for patients, and how high import costs make the products financially exclusive as well.

The new standard aims to remove those hurdles. To this end, the government is committed to promoting scientific research. In addition, the training of healthcare professionals will also be promoted, in order to adequately accompany patients and facilitate informed and safe access to medicinal cannabis.

Earnings Reports

“It was a huge week for earnings from some of the biggest cannabis companies in the industry. Some were big winners like GTI which delivered a solid quarter while others like Aurora cannabis continue to struggle. It’s getting easier to see who has the right strategy for success,” Debra Borchardt, Editor-In-Chief of Green Market Report told Benzinga.

Aurora Cannabis Inc. ACB ACB reported consolidated net revenue of CA$67.8 million ($52.3 million) for the first quarter of fiscal 2021, being up by around CA$300,000 from the fourth quarter of fiscal 2020.
For the same period, the cannabis giant also disclosed an adjusted EBITDA loss of CA$57.9 million, counting reorganization expenses like contract and employee termination which counted for CA$47.4 million. Without these costs, Aurora would have reported an adjusted EBITDA loss of CA$10.5 million.

Canopy Growth Corp. WEED CGC hit record quarterly net revenue of CA$135 million for the second quarter of fiscal 2021, which compares to net revenue of CA$76.6 million in the same period of fiscal 2020.

Canopy Rivers Inc. RIV CNPOF said consolidated financial results for the second quarter of fiscal 2021 revealing a net operating loss of CA$7.4 million, compared to a loss of CA$4 million in the corresponding period of fiscal 2020.

Zynerba Pharmaceuticals Inc. ZYNE posted financial results for the quarter ended Sept. 30. The pharmaceutical company revealed a quarterly net loss of $9 million with basic and diluted net loss per share of 31 cents.

Wellness-promoting cannabis company MariMed Inc. MRMD has disclosed third-quarter 2020 financial results. Core cannabis revenues hovered $13.5 million. That's up by 220% from the same quarter of 2019.

Aleafia Health Inc. AHALEAF posted third-quarter financial results. Net revenue hovers $4.97 million, compared to revenue of $4.96 million in the same quarter of 2019.

Harvest Health & Recreation Inc. (CSE: HARV) (OTCQX: HRVSF) reported Tuesday its third-quarter total revenue of $61.6 million, up by 86% from the same period last year.

The Green Organic Dutchman Holdings Ltd. TGODF announced third-quarter financial results with revenue of $5.71 million — up by 119% over the same quarter of 2019.

Green Thumb Industries Inc. GTII GTBIF reported a boost in revenue for the third quarter of 2020. Revenue jumped 31.3% quarter-over-quarter and 131.1% year-over-year to $157.1 million, according to the Chicago-based cannabis company's earnings report Wednesday. 

Cantor Fitzgerald analyst Pablo Zuanic maintain Green Thumb Industries with a Overweight and raised the price target from $29 to $35. Needham maintained the stock at a Buy and raises the price target from $23 to $39.

Hydroponics retail chain GrowGeneration Corp. GRWG released its third-quarter financial results. Revenue for the quarter hit $55 million, up from $21.8 million in the same period of 2019. Adjusted EBITDA hovered $6.6 million — higher than the $2 million GrowGeneration achieved in the comparative period.

Charlotte’s Web Holdings Inc. CWEB CWBHF disclosed Thursday third-quarter consolidated revenue of $25.2 million, up by 0.4% from the same quarter of 2019.

Regulatory compliance firm Akerna KERN reported $3.7 million in total revenue for the quarter ended Sept. 30. That's up by 16% on a year-over-year basis. Gross profit reached $2 million — up by 9% year-over-year — while software revenue jumped 40% year-over-year to $3.2 million.

Canadian cannabis company Zenabis Global Inc. reported Friday that its net revenue amounted to CA$19 million in the third quarter. That’s a sequential increase of 61%.

Village Farms International Inc. VFF disclosed Friday its third-quarter financial results with net income of $500,000, which stands against a net loss of $700,000 in the same period of 2019.

InMed Pharmaceuticals INM posted financial results for the first quarter of fiscal 2021 with a net loss of CA$2.1 million (41 cents per share), which compares to a net loss of CA$3.4 million (65 cents per share) in the corresponding period of the prior year.

THC BioMed Intl Ltd. THC reported annual financial results for the fiscal year ended July 31, 2020, disclosing revenue of CA$4.18 million, compared to CA$1.49 million in the prior year.

Read all about these earnings reports and others in Benzinga Cannabis’ Earnings Center.

More News From The Week

Organigram Holdings Inc. OGI OGI declared Tuesday an underwritten public offering of its units for gross proceeds amounting to a total of CA$60.13 million.

Organic Remedies Inc. secured $22 million in financing through a credit facility provided by AFC Management LLC (AFC).

Aurora Cannabis Inc ACB shares plunged in the after-hours session Tuesday as the company announced plans for a $125 million public offering. The company said it plans to price each unit of the fresh issue at $7.50, which will consist of one common share of the company and one-half portion of a share purchase warrant. A whole warrant will entitle the holder to buy one common stock at an exercise price of $9 per warrant share. These warrants would have a maturity period of 40 months from the date of offer close.

Following the news, Cantor Fitzgerald analyst Pablo Zuanic maintained Aurora Cannabis with a Neutral, lowered his price target from C$13 to C$12.

Stifel analyst W. Andrew Carter downgraded Aurora from Hold to Sell, raising his price target from C$3.6 to C$6.5.

Martha Stewart is releasing a new holiday-inspired gummies line. The "Domestic Diva" is partnering with Canopy Growth CGC to launch the Martha Stewart CBD Wellness Gummies Sampler.

Cannabis-oriented investment firm Intrinsic Capital Partners confirmed Tuesday the closing of a $102 million growth equity fund.

Verano Holdings LLC is merging with Alternative Medical Enterprises LLC, Plants of Ruskin LLC and other affiliated entities.

Benzinga Cannabis’ content is now available in Spanish on El Planteo.

SōRSE Technology is entering into a joint venture with Colombia-based FCM Global to incorporate a new company in Colombia, Benzinga has learned. SōRSE will now have access to a license, which allows it to deploy its technology to manufacture products containing THC, CBD and other cannabinoids in Colombia. The company will also be able to export these products, featuring its emulsion technology, from Colombia to other Central and South American countries.

Champions + Legends, a sports supplements brand of hemp-derived CBD products for athletic preparation, performance and recovery, has tapped Tim O’Donnell to be an athlete partner.

Johns Hopkins University is collaborating with Realm of Caring and Bloom Medicals on a research initiative focused on cannabinoid therapies. The research will center on the collection of “substantive, educational data” currently available in legal medical cannabis markets.

Global ERP software company 365 Cannabis launched new tech functionalities to serve the diverse operational needs of the growing cannabis industry. New additions to the cloud-based platform include: full WIP costing for cultivation processes, updated mobile scanning, streamlined tray tracking, and integrations specific to international markets such as Canadian Excise Tax Management tools.

Vertosa announced new strategic partnerships for the final quarter of 2020. Their latest collaborations to advance the development of infused products are with Eybna, a terpene technology company; the flavor houses FONA and Sovereign Flavors; research firms Headset Insights and SoapBoxSample; co-manufacturers Aseppak and Inanna; as well as with Dark City Molds and Macchiatto.

Kadenwood's EcoGen Biosciences announced the acquisition of hemp processing and extraction company General Processing, which included the ownership of a 50,000-square-foot Colorado-based facility. The new facility provides EcoGen with increased capacity and cGMP certification.

“EcoGen’s innovative technological advancements in terms of processing will allow us to process hemp more sustainably than ever before, which is imperative for the future of our industry and planet. This acquisition also expedited our progress in cGMP certification and implementation of the new, improved processes, enabling us to better meet the increase in demand as we look to 2021 and beyond,” Garrett Bain, president of EcoGen Biosciences, told Benzinga.

Former Marine turned serial entrepreneur and cannabis business expert Derek Porter was officially named as cannabis consulting firm Gateway Proven Strategies’ Chief of Staff. Having started and exited two multi-million dollar cannabis companies in five years time and a track record of success in multiple states, Derek brings over a breadth of expertise in investment, security, and marketing to the emerging consulting firm.

"It's been a great kick-off thus far. I've been focusing on what I do best as a subject matter expert, working on the company, building outward, solidifying partnerships, building new services, and marketing. I'm also honored to work alongside other experts in their respective areas. I feel like I was recruited for an All-Star team,” Porter told Benzinga.

Spherex, a Colorado-based producer of cannabis oil for vaporizer cartridges and PHYX infused beverages, announced its expansion to Canada in partnership with Motif Labs, a licensed extract product manufacturer based in Southwestern Ontario. This partnership will introduce 23 Spherex vaporizer products, including a line compatible with the PAX Era’s closed-loop vaporizer, to the Canadian market starting in British Columbia, Alberta and Ontario. This partnership marks PAX’s first U.S.-based brand partnership in Canada.

Niccolo Aieta, founder and CTO of Spherex, told Benzinga, “We are proud to be launching our incredible line of Spherex products in Canada. This success was made possible by the entire team at Spherex and our Canadian partners, Motif Labs. The collaboration between one of the top brands in the first recreational state in the U.S., and a top-tier manufacturer in the first G8 country to legalize cannabis, is a very profound moment. We are excited to introduce our full line of vaporizer products to the discerning Canadian public.”

Top Stories Of The Week

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Lead image by Ilona Szentivanyi. Copyright: Benzinga.


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