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Buds & Duds: Canopy Growth still picking up steam thanks to New York hemp license

Cannabis stocks in the US and Canada are struggling in early trade

marijuana leaves in tea cup
Canopy is set to plow as much as $150 million into producing hemp from New York after being granted a state license to do so

Cannabis stocks in the US and Canada are struggling to gain traction Thursday, mirroring the state-of-play on Wall Street.

In early trade, the North American Marijuana Index, which tracks top cannabis stocks in the two countries, slipped by 0.2% to 256.00.

The lackluster performance of cannabis companies came on the heels of the state of Virginia’s Courts of Justice committee defeating bills on Wednesday that would have paved the way for the legalization of marijuana for Virginians over the age of 21.

Duds:

Still ranking high on the list of duds is Aurora Cannabis Inc (NYSE:ACB), which started tumbling yesterday after embarking on a $250 million convertible debt offering.

The stock dropped another 5.3% to US$6.94 in morning trade.

TerrAscend Corp (CSE:TER) was also a leading laggard despite unveiling the closure of its acquisition of Grander Distribution LLC, a company specializing in hemp-derived wellness products.

Shares in the cannabinoid-focused biopharmaceutical company shed 4.2% to hit C$5.75.

Ontario-based Aphria (NYSE:APH) was also off in morning trade on no reported news. Aphria’s share price took a hit in 2018 in the wake of the publication of a report from short-sellers that slammed Aphria for buying a trio of Latin American assets at too high a price. The company is orchestrating its own review into the acquisitions and has denied the findings of the study, which was put out by Quintessential Capital Management and Hindenburg Research.

The stock slipped 1.8% to US$6.53.

Finally, The Green Organic Dutchman Holdings (TSE:TGOD) (OTCMKTS:TGODF) also fell in line with the wider sector despite news that it has tapped Dr Rav Kumar as its chief scientific officer.

Kumar will oversee all science initiatives at the Toronto-based cannabis company. Kumar previously worked at GlaxoSmithKline PLC, where he played a key role in building the pharmaceutical giant’s research and development capability in Canada.

Shares in TGOD dropped 1.7% to US$2.22.

Buds:

As was the case yesterday, Trulieve Cannabis Corp (CSE:TRUL) is still gaining considerable ground.

A release out earlier this week says the founders of Florida’s largest medical cannabis company have entered into voluntary lock-up agreements in respect to their 75.5 million shares with the company. This means they won’t sell any of their Trulieve stock on or before July 25, 2019.

Canopy Growth (NYSE:CGC) was also a top gainer.

It seems that investors are still applauding the news that the Ontario-based company has been granted a license by New York state to produce hemp. Canopy is reportedly looking to set up a giant production operation focused on hemp extraction and production in the US. The company will invest between $100 million to $150 million in its new New York operations.

The stock climbed 3.8% to US$43.71.

Cronos Group (NASDAQ:CRON) also picked up steam on no reported news. Late last year, its stock generated considerable momentum after the tobacco giant Altria disclosed it is taking a 45% stake in the company for about US$1.8 billion.

The stock popped by 2.3% to US$13.73.

Contact Ellen Kelleher at [email protected]ctiveinvestors.com

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