Marijuana Stock Report: Pot Stocks Slump As Market Technicals Spur Cannabis Industry Sell-Off
The North American Marijuana Index tumbled on Tuesday as Canopy Growth Corp. (TSX:WEED) failed to defend its 50-day moving average, according to James West’s Midas Letter, triggering an industry-wide pot stock sell-off by mid-afternoon trading. The 50-day moving average, which represents the company’s average closing price over the past 50 days, broke down at approximately 1:40 on Tuesday afternoon, sending the weed stock market into its second tailspin in as many days. Aphria Inc. (TSX:APH), Aurora Cannabis (TSX:ACB), and MedReleaf (TSX:LEAF) all charted downward at around the same time, leading to what Midas Letter termed a “classical sector-wide program selling event.” The Index dropped 9.07 points, or 3.90 percent to close the day at 223.42.
The United States Marijuana Index fell 0.70 points, or 0.95 percent to close out Tuesday at 72.93, while the Canadian Marijuana Index dropped 44.04 points, a decline of 6.74 percent to close the day at 608.96.
Meanwhile Wall Street was up on Tuesday as investors pushed back on President Trump’s recent moves to force a possible trade war and stifle further growth at Amazon. With earnings season around the corner Wall Street bet big that the President was more bluff and bluster than concrete action, reversing Monday’s losses in so doing. An up-and-down trading session ended the day in positive numbers with tech stocks returning to form.
Still, not everyone was sold on Tuesday’s rally. "I don't think we're in the clear," said Dennis Dick, head of markets structure, proprietary trader at Bright Trading LLC said in an interview with Reuters. "Tomorrow morning will tell us. Every time we get a good rally the sellers come in. What we need is a two-day rally with a sustained buying pressure."
The Dow Jones Industrial Average climbed 389.17 points, a gain of 1.65 percent, to close out the day at 24,033.36, while the S&P 500 gained 32.57 points, a jump of 1.26 percent, to end Tuesday at 2,614.45. Also, the Nasdaq Composite gained 71.16 points, or 1.04 percent, to close out Tuesday at 6,941.28.
And in perhaps the most significant sign that cannabis has become pervasive across the country, the debate over medical marijuana has reached Utah, where Governor Gary Herbert has declared he wants voters to reject a possible upcoming ballot initiative to legalize, despite polling that shows 77 percent of residents in favor. The Church of Jesus Christ of Latter-day Saints is meeting with legalization backers as they hope to garner support, or, at the least, keep the church mum on the subject in the highly populated Mormon state.
Horizons Marijuana Life Sciences ETF (HMMJ.TO) fell CAD$1.05 per share, a decline of 6.43 percent to close the day at CAD$15.27. Similarly, the Evolve Marijuana ETF (SEED) fell $1.40 per share to close the day at CAD$15.94.
Canadian CanniMed Changes CEOs
CanniMed Therapeutics, Inc. (TSX:CMED) announced that current CEO Brent Zettl has resigned effective immediately to pursue other opportunities. In his place, Senior Vice President (SVP) of Business Integration Andre Jerome has been appointed interim CEO.
As a pioneer in the Canadian medical cannabis industry, Zettl has served in various leadership roles at CanniMed for the last three decades. The board thanked Zettl for his huge contributions to the company.
Jerome has served as an SVP of Business Integration at Aurora, a licensed medical cannabis producer under Health Canada’s Access to Cannabis for Medical Purposes Regulations (ACMPR). Aurora has nearly completed its acquisition of CanniMed Therapeutics, Inc.’s outstanding shares. CanniMed is the most experienced medical cannabis licensed producer in Canada and is Canada’s strongest medical cannabis brand.
In his SVP role, Jerome was responsible for the integration of new acquisitions and was already leading the effort to integrate CanniMed into Aurora. He was also responsible for identification of synergies across subsidiaries and venture partners. Jerome was co-founder and CEO of H2 Biopharma before joining Aurora.
Aurora CEO Terry Booth says Jerome is the right person to be at the helm of CanniMed at this time. Jerome is described as “a consummate business professional and team leader with an excellent track record in accelerating growth.” Booth is excited about the future expansion of the company into both the domestic and international medical cannabis sectors.
Isodiol International Inc. (CSE:ISOL) (OTC:ISOLF) extended the deadline to finalize the acquisition of Biosynthesis Pharma Group (BSPG) to April 30, 2018… MedReleaf Corp. (TSX:LEAF) launched AltaVie by MedReleaf, a premium recreational cannabis brand… MariMed Inc. (OTCQB:MRMD) reported year-end financial results for 2017.