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Home / Business / Rally of cannabis stocks for a second day after House passed a bill aimed at lifting the federal ban on weeds

Rally of cannabis stocks for a second day after House passed a bill aimed at lifting the federal ban on weeds



Cannabis stocks recovered a second day on Wednesday, supported by the adoption by the Congressional Committee of a law to lift the federal ban on weeds and strong gains for Curaleaf, after posting a lower than expected result. quarter loss.

Curaleaf's US-listed shares

CURLF, + 11.82%

CURA, + 12.19%

recently posted an increase of 1

2.2% as investors shook off their revenue losses.

The Massachusetts-based company posted a loss of $ 6.8 million, or a penny per share, against losses of $ 33.7 million, or 9 cents per share, in the prior-year period. Sales increased from $ 21.4 million to $ 61.8 million. Analysts polled by FactSet had expected losses of 2 cents on revenue of $ 63.6 million.

GMP analyst Robert Fagan, who rates the stock, said that the numbers "largely met our relatively high expectations". The sales figure was below its estimate of $ 67 million.

He noted positive results, including good cost control, a gradual increase in sales, and the fact that steaming fears had little impact on Select's quarterly revenues. The company acquired Select in May for 1.27 billion CS (954.7 million USD).

Read now: As the pot stocks plummeted, these two men just raised $ 120 million to buy them Harvesting Revenues

MKM analyst Bill Kirk raised his estimate of fair value for the year Stock from 6 to 8 C $, however, remained at its neutral valuation of the stock.

"Admittedly, after weak earnings reports for most of the sector, it feels good to use positive numbers when it comes to Curaleaf's profitability," the analyst wrote in a note. "However, we can not quite reach the rating yet."

The mood on Wednesday was strengthened after the House's Justice Committee voted in favor of the Marijuana Law on Reinvestment and Deletion of Opportunities (MORE), which aims to lift the federal ban on cannabis and past beliefs.

Read: The Aurora Cannabis stock suffers the worst day in more than five years. Analyst says it would be fair for investors not to believe them.

The law introduced by the committee chairman Jerrold Nadler, a New York Democrat, voted in favor on Wednesday with 24 to 10 votes in favor.

"The Senate will take its own time, but the Senate is always doing it," Nadler said at a news conference on Tuesday to introduce the topic. He also wanted to be optimistic in the run-up to Wednesday's legislative drafting session: "The energy and political pressures from the various states are increasing rapidly. This also affects the Senate. We will do it.

Also read : The House panel passed a law intended to legalize marijuana, but the top democrat acknowledges that the Senate will take its own time.

In Corporate News, Harvest Health & Recreation Inc.

HRVSF, + 4.16%

HARV, + 5.31%

was the latest cannabis company to make a previously agreed deal, its plan to purchase cannabis licenses in Pennsylvania, Delaware , New, has retired Jersey and Maryland from CannaPharmacy Inc. on a deal that originally had a $ 88 million cash price.

See now: Canada encourages cannabis companies to improve disclosure of cross-shareholdings.

Instead, the companies have agreed that Harvest Health will pay $ 26 million to Franklin Labs LLC, a CannaPharmacy unit, to divide between $ 15 million in cash and $ 11 million in promissory notes.

Harvest Chief Executive Jason Vedadi said the new terms would help the company meet its sales and profitability goals.

Cannabis stocks are still going through a phase of downsizing after a sharp slump in stock prices. Many companies are revising the terms of the contract, cutting costs and taking into account the sale of assets as the legal market develops slower than expected and companies continue to make losses.

Harvest announced that its third-quarter loss of $ 39.1 million was 14 cents a share, more than the loss of $ 453,000 a year earlier. The company did not offer any loss per share for the previous year. Sales increased from $ 11.2 million to $ 33.2 million. There are too few fact-set estimates for a reliable consensus.

In a similar move, Neptune Wellness Solutions Inc.

NEPT, + 1.95%

NEPT, + 2.58%

stated on Wednesday an agreement with Canopy Growth Corp. to have achieved.

CGC, + 14,49%

WEED, + 14.08%

to modify and adapt their cannabis processing agreement. The parties have agreed to set a revised timetable for the processing quantities promised by Canopy for Neptune and the waiver of certain privileges granted to Canopy in relation to Neptune's capacity and pricing.

"From June 30, 2020, volumes and prices will be negotiated between the two parties on the basis of market conditions," said a statement by Neptune. The three-year contract period remains in place. US listed shares of Neptune fell 3.7%, while Canopy gained about 12%.

Elsewhere in the industry was Tilray

TLRY, + 3.10%

rose 2.2%, Aphria Inc.

APHA, + 3.99%

APHA, + 3.70%

increased by 3.1% and Cronos

CRON, + 2.24%

CRON, + 1.91%

climbed 1.8%.

Aleafia Health

ALEAF, + 6.91%

ALEF, + 2.94%

rose 9.8%, Hexo

HEXO, + 5.49%

HEXO, + 4.90%

increased by 5.9% and Directorate Chart

OGI, + 5.17%

rose 5.6%.

MedMen

MMNFF, + 4.62%

rebounded by 5.2%. GW Pharma

GWPH, -3.57%

fell 3.0%.

The ETFMG Alternative Harvest ETF

MJ, + 2.86%

increased by 2.1%, with 25 of its 36 components trading higher. The Horizons Marijuana Life Sciences ETF

HMMJ, + 4.41%

rose 6.5%, with 42 of its 54 member shares higher.

The S & P 500

SPX, -0.81%

fell 0.8% and the Dow Jones Industrial Average

DJIA, -0.82%

dropped 232 points or 0.8%.

Cannabis Watch: Click here for the full coverage of MarketWatch on cannabis companies.


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