Summary

  • The cannabis sector continued to fall last week with the Horizons Marijuana Life Sciences Index down 11.0% and ETFMJ down 11.2%.
  • Tilray announced a $100 million joint analysis project with AB InBev and formalized its earlier announced cooperation with Novartis.
  • President Trump signed the Farm Bill which legalized hemp cultivation federally last week; FDA continues to be a roadblock for CBD companies.
  • Amid a global selloff and risk-off mode, we would suggest investors avoid panic selling and focus on staying with high-quality large-cap names.

Overall Trading

The cannabis sector continued its selloff last week. The Horizons Marijuana Life Sciences Index ETF (OTC: HMLSF) decreased 11.0% while the U.S.-listed ETFMG Alternative Harvest ETF (MJ) also dropped by 11.2%.

Canadian Large-Cap: Cannabis stocks continued to struggle among a global equities selloff and an overall risk-off style. Tilray (TLRY) was the best performer with a 0.3% decline following an announcing partnership with AB InBev (BUD) and Novartis (NVS). Canopy (CGC) was declining 15% despite stating that it will enter the U.S. hemp industry following the 2018 Farm Bill. Aphria (APHA) and Aurora (ACB) lost double digits without any news. Cronos (CRON) decreased by 9.5%, and Altria’s (MO) $1.8 billion investment is already remaining at a 15% loss. CannTrust (OTC: CNTTF), HEXO (OTCPK: HYYDF) and Organigram (OTCQX: OGRMF) all racked up losses in the mid-teens. TGOD (OTCQX: TGODF) continues its free fall and now trades at 32% reduction to its IPO price.

Canadian Small & Mid Cap: The small & mid-caps are facing the worst of the sell-off. The greatest losers are Namaste (OTCQB: NXTTF) with a 32% decline and Canopy Rivers (OTCPK: CNPOF) with a 26% decline. Khiron Life Sciences (OTCQB: KHRNF) countered the trend by 3.9% increase and is the only gainer amongst the group. Hempco (OTC: HMPPF) changed previous week’s gains as investors “sell the news” following the U.S. passing the 2018 Farm Bill. Emblem (OTCQX: EMMBF) fell 13% last week and trades at a 16% discount to the presumed offer price of $1.04 from Aleafia (OTCQX: ALEAF).

U.S. Sector: The U.S. cannabis sector too could not avoid the brutal sell-off last week. Liberty Health (OTCQX: LHSIF) fell 17.8% while striving to recover from the short attack. Multi-state operators all fell with Curaleaf (OTCPK: LDVTF) below 7.2%, MedMen (OTCQB: MMNFF) below 8.1%, Green Thumb (OTCQX: GTBIF) below 16.5%, iAnthus (OTCQX: ITHUF) below 10.9%, and Trulieve (OTCPK: TCNNF) below 9.0%. Charlotte’s Web (OTCQX: CWBHF) and CV Sciences (OTCQB: CVSI) both dropped as well after the Farm Bill was signed into legislation by President Trump.

Shifting to 2018’s new listings, Acreage Holdings (OTC: ACRZF) fell 21% and is now trading 49% under the RTO price. MJardin (OTC: MJARF) continues free fall with a 27% decline and is currently trading at 76% under its RTO price. Harvest Health (OTC: HTHHF) lost 12%, and Cresco Labs (OTCPK: CRLBF) fell 11%.

Important Sector Update

The cannabis sector encountered another round of fierce sell-off as the downfall of the global equities exchanges affected endangered assets worldwide. Cannabis stocks have continued undergoing one of the gravest slumps in the modern memory as several shares are rooted in the red for 2018 following a stellar 2017. However, progress is being made in the U.S. as the 2018 Farm Bill was officially signed into law by President Trump and hemp cultivation will become federally legalized. The connections are far-fetching as companies will be authorized to explore hemp farming and CBD products easily. However, despite passing the Farm Bill, the hemp sector continues to be subordinated to the statute of the FDA, and domestic commerce of CBD products continue to be illegal in most circumstances, as the agency said after the Farm Bill was passed.

Selling unapproved products with unsubstantiated therapeutic claims is not only a violation of the law but also can put patients at risk, as these products have not been proven to be safe or effective,
However, we do believe that the Farm Bill has paved the way for the FDA to approve CBD products in the food and health categories gradually. Companies should not rush into the industry while risking violating existing FDA regulations. Once proper approvals are obtained, the sky is the limit for companies to explore the CBD markets.

Quick Holiday Wishes

As tomorrow is Christmas, the stock market will be closed. On behalf of the PennyStocks.News Staff marry Christmas and enjoy the day. The markets will open for a full trading day again on Wednesday.

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Michigan’s Cannabis Industry Expectations in 2019