Cannabis daily: MarketWatch took down IGC (and wants you to know about it), wholesale prices continue to fall, and everything else you need to know about marijuana this morning
MarketWatch reporters patted themselves on the back this weekend for their recent takedown of India Globalization Capital (OTCMKTS:IGCC), using the opportunity to scare investors off of marijuana stocks at-large. And while the initial takedown of IGC was indeed impressive in both its depth and detail, this weekend’s scare piece was as-equally mundane, hitting all of the expected notes right down to the comparisons to the dot-com bubble and bitcoin.
For those that don’t know, IGC —the company which liked to boast of being the first in cannabis to use blockchain technology —was riding high earlier this year, with share prices shooting up 500 percent to nearly $13 per share. Then MarketWatch swooped in with a devastating report, showing the company had issues with the SEC, problems pivoting to different businesses over the years, and that insiders, such as Founder and Chief Executive Ram Mukunda usually profited the most when it came to the market.
Most interestingly, IGC claimed to be working with a manufacturer in Malaysia to sell and distribute CBD-infused beverages. As MarketWatch pointed out, however, Malaysia puts people to death for cannabis possession.
Consequently, shares fell by 80 percent following the report. Soon, IGC trades were halted, and the NYSE American exchange decided to delist the company — a move with which Mukunda disagreed.
“We strongly disagree with the NYSE decision and will seek listing on an exchange that embraces our innovation,” said Mukunda in a statement. “We have been transparent in disclosing our active legacy operations and should not be penalized for moving forward to commercialize products in the emerging U.S. cannabis industry.”
While the report by MarketWatch is a great lesson to investors across the board —and well worth the read — a job well done is never reward enough in the age of the internet. In fact, not only does MarketWatch insist on reminding readers that it was them who brought down IGC, but they also take the opportunity to tell marijuana stock investors once again to perform their due diligence, as if cannabis is the only industry where fraud now runs rampant.
“With any hot new product, innovation or growth industry – from dot-com stocks to bitcoin – there are companies with sales and earnings and those that chiefly have ambitions,” reads the piece. “Cannabis companies are no different. Investors would be prudent to learn as much as they can about these companies and their business.”
It’s yet another reminder to those in the cannabis industry that while you may have a seat at the table, you’re still not part of the club.
The sky is falling; the sky is falling
Speaking of scare tactics, the Washington Post published another doom-and-gloom report on the cannabis industry recently, this time discussing the issue of falling cannabis prices. Wholesale prices in Colorado fell by a third over the past year, leading to issues for entrepreneurs as well as less tax revenue in state coffers. It is, quite frankly, a story that’s been repeated ad nauseam since the first states legalized cannabis so many years ago.
“States may have failed to anticipate this problem because of misleading predictions about the effects of legalization,” wrote reporter Keith Humphreys for the Post, ignoring what just about anyone with two bits of common sense has known for years — that as long as cannabis is illegal federally the black market will continue to thrive and drive down prices. After all, reporters have been writing this same story for years now.
China’s hemp market is killing it
Meanwhile, as individual states in the U.S. struggle, China continues to see nothing but success with their hemp market. According to New Frontier Data, the hemp market in China is a billion-dollar business and growing every year, with consumer textiles the number one product produced.
Marijuana stocks this morning
The North American Marijuana Index closed out trading the last session up 4.92 points or 1.93 percent, ending the week at 259.49, with the United States Marijuana Index up 2.52 percent and the Canadian Marijuana Index up 10.22 percent. Horizons Marijuana Life Sciences Index ETF (HMMJ.TO) closed up 1.69 percent at CA$18.05 ($13.67), and ETFMG Alternative Harvest ETF (MJ) closed up 0.17 percent to $30.10.