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Buds & Duds: Cannabis stocks tumble led by mixed 3Q earnings from Aphria

Also on the move were Valens GroWorks Corp, Chemistree Technology, Cronos Group and Golden Leaf
stock screen down
Cannabis stocks sank on Monday, led by Aphria

Cannabis stocks had a door-in-the-face abrupt day Monday with broad drops across the board, led by behemoth Aphria Inc (NYSE:APHA), which swung to a wide loss in its third-quarter financial results, despite a huge boost in revenue. 

The North American Marijuana Index, which tracks the top cannabis stocks in the US and Canada, closed down 3.6% to 284.54. The Horizons Marijuana Life Sciences Index ETF was down 4.5% at C$19.89.

Duds

Aphria Inc (TSE:APHA) (NYSE:APHA) was the talk of the town Monday after the Canadian producer swung to a loss in its fiscal third-quarter despite posting sharply higher revenue.

Shares were down 14.2% at C$ 11.50 in Toronto and slid 14.9% at US$8.60 in New York. 

READ: Aphria shares dip after cannabis producer swings to fiscal 3Q loss

Its net loss for the three months to February 28 came to C$108.2 million (US$81.1 million) or C$0.43 per share, down from a profit of C$12.9 million (US$9.69 million), or C$0.08 per share, in the year-ago quarter. Its bottom-line took a hit from a $50 million charge related to its Latin American assets.

Its net revenue, meanwhile, climbed to $73.6 million, jumping more than sevenfold from $10.27 million in the year-ago quarter.

The Ontario company also posted a decline in the number of kilograms of cannabis sold in the quarter to 2,636.5 from 3,408.9, despite its average selling price rising to C$8.03 per gram from C$7.51 per gram due to higher cannabis oil sales.

Other laggards Monday included Cronos Group Inc (NASDAQ:CRON) (TSE:CRON), which sank 6.6% at  C$21.18 in Toronto and down 7.4% at US$15.78 in New York. 

Cronos has been dogged by disappointing earnings released a few weeks ago which missed expectations, alongside a host of analyst downgrades. The stock has dropped around 20% since the start of 2019. 

Other decliners included Aleafia Health Inc (OTSMKTS:ALEAF) (CVE:ALEF), which was down 7.1% at US$1.16 in New York and down 7.7% at C$1.55 in Toronto. 

Buds

Valens GroWorks Corp (CSE:VGW) (OTCMKTS:VGWCF) bucked the trend on Monday, with shares up 8.4% at C$3.75 in Toronto and up 7.2% at C$2.80 in New York. 

Last week, the Kelowna-based company announced it had raised a substantial $43 million to expand its geographic presence and increase production capacity. Valens has extraction processing and supply agreements with a number of leading producers across Canada. 

WATCH: Valens GroWorks raises over 43 million dollars to grow expansion

Chemistree Technology Inc (CSE:CHM) (OTCMKTS:CHMJF) saw shares jump on Monday as it announced a partnership to potentially expand its presence outside California and Washington state.

The cannabis-focused investment group said its US subsidiary, American CHM Investments Inc, has signed a letter of intent (LOI) to partner with Applied Cannabis Sciences of New Jersey (ACS).

Shares were up 6.8% at C$0.63 in Toronto and up 10.2% at C$0.47 in New York. 

READ: Chemistree Technology shares advance as it sets to partner with Applied Cannabis Sciences of New Jersey

Contact Katie Lewis at [email protected]

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