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Marijuana Stock Report: Pot Stocks Drop Despite Canopy Growth

By Brandon A. Dorfman
May 24, 2018

The North American Marijuana Index dipped downwards on Wednesday amidst enthusiasm for Canopy Growth Corp.’s (TSX:WEED) announced May 24th debut on the New York Stock Exchange under their new symbol CGC. Celebrating the moment, the company released a statement extolling the historic nature of the moment, calling it a company first in line with other moments such as them being the first publicly traded cannabis company in North America. Company shares finished trading on the OTC Pink until the close of business on May 23rd.

The Index fell 2.90 points, or 1.10 percent to close out the trading day at 261.35, with The United States Marijuana Index falling 1.15 percent and The Canadian Marijuana Index dropping .90 percent.

"We're a company focussed on leadership, vision, and integrity and listing on one of the most prestigious exchanges in the world validates the level of execution and ambition our team has demonstrated," said Bruce Linton, company Chairman, and CEO. "Five years ago, as a small Smiths Falls based start-up in the cannabis sector, we could have never imagined this historic moment.”

Market reaction to the news was slightly less enthusiastic, with Canopy shares falling $0.680 by close of day on the TSX, a drop of 1.72 percent. Whether or not the move to the NYSE shores up the fundamentals for the company remains to be seen, as cannabis is still federally prohibited in the U.S., keeping it off of the radar of most hedge fund managers. For the time being, however, a sense of both hype and hope has infected the weed stocks community.

Meanwhile, on Wall Street investors saw minimal gains following the release of the minutes of the last meeting of the Federal Reserve, which stated that inflation might not result in interest rate hikes. Policymakers felt that higher rates may come “soon” should the current economic situation remain flat, but all in all, Wall Street took the news well, with S&P 500 utilities and real estate making the most significant gains.

"The market is probably breathing a little bit of a sigh of relief knowing that inflation even a bit above 2 percent may not necessarily mean a faster rate of increases," said Mike Baele, managing director at U.S. Bank Private Client Wealth Management in an interview with Reuters.

Still, earlier in the day President Trump threatened to derail the market with his comments on trade talks with China, stating his displeasure with their progress. The talks appeared "too hard to get done," the President stated, giving investors pause in early morning trading.

The Dow Jones Industrial Average rose 52.4 points, or 0.21 percent, to end the day at 24,886.81, while the S&P 500 rose 8.85 points, or 0.32 percent, to close out the day at 2,733.29. Similarly, the Nasdaq Composite rose 47.50 points, or 0.64 percent, to end the day at 7,425.96.

The Horizons Marijuana Life Sciences Index ETF (HMMJ.TO) rose CAD$0.09 per share, an increase of 0.49 percent to close out the day at CAD$18.36, while the Evolve Marijuana ETF (SEED.TO) rose CAD$0.16 per share, or 0.90 percent to finish out Wednesday at CAD$17.85.

CBD Oil and A Slurpee

Bringing CBD oil into the mainstream is convenience store chain 7-Eleven, who was part of an announced deal by Denver company Phoenix Tears to bring the controversial hemp-based extract into 4500 franchise locations across the United States. According to Hemp Industry Daily, the company, which makes hemp-derived CBD oils and oral sprays, made the deal through MarketHub Retail Services, a 7-Eleven distributor.

“This agreement confirms our belief that CBD’s status as a mainstream wellness option has arrived,” Janet Rosendahl-Sweeney, founder of Phoenix Tears, said in a statement.

According to reports, the ability to purchase CBD oil with a Slurpee will only occur in states where cannabis is currently legal —either recreation or medical —meaning regions such as California, Colorado, Florida, Illinois, Maryland, Massachusetts, Nevada, and Washington DC will be party to the deal. The deal calls for 7000 CBD products to make their way into 7-Eleven stores over the next three years.

Quick Hits

Aurora Cannabis Inc. (TSX:ACB) (OTCQB:ACBFF) appointed Jonathan Zaid as Director of Advocacy and Corporate Social Responsibility… Khiron Life Sciences Corp. (TSXV:KHRN) will commence trading on the TSX Venture Exchange Inc. this week… Sunniva Inc. (CSE:SNN) (OTCQX:SNNVF) wholly-owned subsidiary, Natural Health Services Ltd. is opening a new clinic in Ontario.

9 Things Cannabis Investors Should Know

From Evolve ETFs and The Visual Capitalist comes an interesting infographic for cannabis investors detailing “what investors should know as the legal cannabis sector comes out of the dark.”

Visual Capitalist uses powerful visual content to help investors and business professionals understand the world. Focusing on topics such as markets, technology, energy, and the global economy, Visual Capitalist is currently one of the fastest growing online publishers in North America. Check out the infographic below:

Courtesy of: Visual Capitalist

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