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Cannabis Stock Report: Marijuana Markets Falter On News Of NAFTA Exit

Cannabis stocks dipped on Wednesday, as marijuana markets mirrored the concerns of Wall Street over China and reports that the Trump administration is set to announce a pull-out from the North American Free Trade Agreement (NAFTA). U.S. investors worried that China would ease up their purchases of U.S. government bonds while also fretting a report from Reuters that cited unnamed government sources quoted as saying President Trump plans to announce an exit from NAFTA shortly. Wall Street and the Canadian exchanges took on sizeable losses on Wednesday on the news, with the Dow Jones Industrial Average, Nasdaq, and the S&P 500 all ending their post new years rallies. Canadian exchanges saw similar losses as well.

The news soured marijuana investors on Wednesday, as cannabis stocks hit their lowest point since the Sessions announcement last week. Major indices across the sector fell, as did marijuana’s two most significant funds. The North American Marijuana Index fell 12.99 points on Wednesday for a 3.58 percent loss to close out trading at 350.00. There was an equal disappointment on both sides of the border as investors in the United States and Canada continued to lose confidence in the markets, adding to the frustration of yesterday’s slew of legislative setback. The United States Marijuana Index fell 1.89 for a 1.86 percent loss, while The Canadian Marijuana Index dropped 38.83 points for a 3.71 percent loss.

Other indices fared equally as poorly, with The Cannabis Stock Index, which is overseen by 420 Investor, dipping 2.57 points on Wednesday for a 1.47 percent loss. The Index closed the trading day at 171.91. Solactive’s North American Medical Marijuana Index fell 35.83 points on Wednesday, after making modest gains the day before. The Index finished the day at 1973.86.

Cannabis’ biggest funds took some punches on Wednesday with the rest of the market, each closing down by the end of trading. The Horizon Marijuana Life Sciences Index ETF fell $0.48 per share, a 1.97 percent loss. The fund closed out Wednesday at $24.33 per share on a trading volume of 1592920. Meanwhile, ETFMG’s Alternative Harvest ETF, the former Latin American Real Estate fund dropped $0.31 per share on Wednesday for a  0.82 percent loss. The fund closed the day at $37.59 per share.

Still, it is safe to say the fundamentals of the marijuana market are gaining back their footing, despite the recent announcement from the Justice Department. Any decision about NAFTA is bound to scare the markets as a whole, especially one so entrenched in Canada as the cannabis sector. Beware the naysayers claiming marijuana to be a speculative market because while volatility is still an issue, no unicorns reside here.

Meanwhile, Around The Industry...

Making bank is Aphria Inc. (TSX:APH) who announced on Wednesday second quarter results for the period ending November 30, 2017. The company increased revenue by 39 percent for the quarter, quietly creeping up on industry leaders Canopy Growth (TSX:WEED) and Aurora Cannabis (TSX:ACB). Revenue for the quarter was CAD$8,504, a year-over-year increase of 60 percent compared to CAD$5,227 for the same quarter in 2016.

On Wednesday Aphria made headlines when CEO Vic Neufeld vowed to continue the company’s investments below the border in the United States despite increased pressure from the Justice Department. Adding to the controversy comes increased scrutiny from the TMX Group, operators of the Toronto Stock Exchange and the TSX Venture, who threatened to delist any company in violation of U.S. Federal law. In a statement, Neufeld addressed Aphria’s desire to comply with regulators while at the same time wanting to appease shareholders.

“In terms of Aphria’s U.S. assets, I would like to convey the message that we have no delisting request whatsoever from any regulator,” Neufeld said in a call to analysts on Wednesday, according to The Financial Post. “And we remain on a path that will be receptive to the regulators, while at the same time, provide proper value to our shareholders.”

Aphria was down 1.35 percent in higher than average trading volume on Wednesday, closing out the day at $22.58 per share.

CanniMed Tekent Een Contract

Nu komt de aap uit de mouw Heading overseas is CanniMed Therapeutics (TSX:CMED) who announced on Wednesday a marketing and distribution agreement with Dutch pharmaceutical compounding company Fagron NV. As per the agreement, CanniMed will supply Germany and other European countries with medical grade cannabis via Fagron’s established infrastructure. Both companies expect sales to commence in quarter three of 2018, pending the receipt of proper permits.

“Fagron is perfectly positioned in the highly attractive German market as well as several other countries to drive the penetration of our pharmaceutical grade cannabis products,” remarked CanniMed CEO Brent Zettl. “ Our first primary target market, Germany, is particularly exciting as it has legalized medicinal cannabis for distribution through pharmacies and with a population of over 82 million which is more than double that of Canada.”

CanniMed shares were up .34 percent on higher than average trading volume on Wednesday, closing the day at $26.71 per share.

Indoor Grow(Life)

Building a better mousetrap… Seeking innovative solutions is GrowLife, Inc. (PHOT), who announced on Wednesday the company filed a provisional patent for their vertical cannabis cultivation framework with the U.S. Patent and Trademark Office. According to a statement, the new cultivation methodology claims to yield larger production capacities over standard horizontal indoor grows. Growlife’s patent filing claims the product achieves these higher yields at significant cost savings.

“This proprietary growing method solves the cannabis supply chain problem by applying sound scientific principles combined with advanced industrial process control and proven growing methodology,” remarked GrowLife CEO Marco Hegyi. "We realized that as the cannabis industry grows, resources such as real estate will become more scarce. Growers will need to increase production capacities without increasing their footprint or costs to remain competitive, which becomes possible with this new cultivation methodology.”

GrowLife fell 8.8435 percent on Wednesday on higher than average trading volume. The company ended the day at $0.0268 per share.

Other News and Notes

Bright light city gonna set my soul/ Gonna set my soul on fire… Hitting the Strip is Advantis Corporation (OTCPINK:ADVT) who announced on Wednesday a deal with Las Vegas-based Player’s Network (OTCQB:PNTV) to bring their products to the state of Nevada. Advantis packaging solutions will work with WeedTV, Player’s Network’s cannabis social media and video platform to promote and market “marijuana canning.” Player’s other venture, Greenleaf Farms will use Advantis’ Amster-Can products to package cannabis across the state.

Hello, I love you, won’t you tell me your name… Making introductions is Cannabis Science, Inc. (OTC:CBIS) who announced on Wednesday a new Construction Project Management Team in coordination with their already existing Security Team. Together the two groups will assist the company in the development of pharmacies and medical facilities, with plans to open first in Los Angeles before expanding nationwide. “The formation of CBIS’ Construction Project Management and Security Teams give our Company important access to construction and security experts,” stated company CEO, Raymond C. Dabney. “This will help the Company implement our expansion plans.”

Stocks To Watch (And Watch Out For)

Maricann Group Inc. (MARI.CN) announced the closing of a $40 million private placement on Wednesday. The company was down 7.25 percent on Wednesday to close that day $3.20 per share.

Medical Marijuana, Inc. (MJNA) announced the promotion of Stephen Jones to President of their subsidiary HempMed recently. The company fell 5.31 percent on Wednesday on lower than average trading volume to close at $0.141 per share.

Until tomorrow...

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