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Buds & Duds: Cannabis stocks putter in North America; embattled CannTrust gets hit with license suspension

Shares of CannTrust tumbled further after Health Canada suspended its cannabis production license

pot gavel
Also on the move was Canopy Growth, Curaleaf and BevCanna

Cannabis stocks were fairly quiet across Canadian and US exchanges on Wednesday, but the hits kept coming for embattled pot producer CannTrust.

The North American Marijuana Index, which tracks the top cannabis stocks in the US and Canada, lost 1% to stand at 176.6 points. Elsewhere, the Horizons Marijuana Life Sciences Index ETF eased 0.1% to C$14.35, while the OTCQX Cannabis Index inched 0.5% higher to 648.8 points.

Buds

Major multistate operator Curaleaf Holdings Inc (CSE:CURA) saw its shares rise 1.7% on Wednesday at C$10.58 after it announced the opening of a new dispensary in the state of Arizona.

The opening represents the company's third acquisition in Arizona over the past four months, giving Curaleaf the second largest retail footprint in the US state, the company said in a release.

Canopy Growth Corporation (TSE:WEED) also saw movement in positive territory after research firm Oppenheimer said it was initiating coverage on the cannabis giant with a “Perform” or neutral rating.

Oppenheimer did not put forth a price target on the stock, which creeped 2% higher on Wednesday in Canada at C$38.25.

Canopy recently told investors that it hoped to have a permanent CEO in place by the end of the year, following the departure of founder Bruce Linton in July.

Also on the move was infused beverage company BevCanna Enterprises Inc (CSE:BEV) (OTCMKTS:BVNNF), closing up 2% in Canada at C$0.52 following yesterday’s announcement that it had signed a definitive agreement with Clearwater CannGrow to produce sun-grown certified organic cannabis on 130 acres of its land.

Duds

The storm is not over for shareholders of CannTrust Holdings Inc (TSE:TRST), which fell further in Toronto after Health Canada suspended its cannabis production license after being under investigation for allegedly cultivating pot in unlicensed rooms.

Roth analyst Scott Fortune wrote in a Wednesday note that the research firm views the suspension as a “fortunate outcome” for CannTrust at the moment, as regulators could have completely revoked its licenses.

“There are still a number of unanswered questions as to what is to happen with legal cannabis produced over the last quarter and the ultimate end of the suspension from a timing standpoint,” Fortune wrote in a note.

Shares of CannTrust tumbled 7.6% in the morning but regained ground in the afternoon to close 1.2% lower at C$1.72 on Wednesday.

Also dropping on Wednesday was MariMed Inc (OTCMKTS:MRMD), which saw its share price decline by 9.1% to US$0.95 despite having no news.

--Updates with closing share prices--

Contact Angela at [email protected]

Follow her on Twitter @AHarmantas

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