Cannabis stocks continued to lose ground on Wednesday across North American markets.
The North American Marijuana Index, which tracks the top cannabis stocks in the US and Canada slipped 1.1% at 123.9 points. Elsewhere, the Horizons Marijuana Life Sciences Index ETF fell 1.5% to C$9.95, while the OTCQX Cannabis Index sank 1.8% at 447.3 points.
Canadian securities regulators are preparing to enforce stricter guidelines for the cannabis industry after finding a series of inadequacies in the way companies disclose conflicts of interest, particularly when it comes to cross-ownership in mergers and acquisitions, The Financial Post reported.
In some cases regulators discovered that the buyer or seller in an M&A transaction had an undisclosed financial interest in the other company, according to the newspaper’s Barbara Shecter.
TransCanna Holdings Inc (CSE:TCAN) saw big gains on Wednesday after closing its acquisition of Lyfted, a vertical cannabis company in California, increasing its foothold in the most populous US state.
Vancouver-based TransCanna paid US$550,000 and issued nearly 2.7 million shares at C$0.80 to Lyfted shareholders.
Shares of TransCanna gained 11% in Canada to stand at $0.81.
Nabis Holdings Inc (CSE:NAB) (OTCMKTS:NABIF) was also higher in Canada as its shares began trading on the OTCQB venture market, giving the company increased exposure to a US investor base.
Nabis shares traded 6.3% higher on the Canadian Securities Exchange at C$0.09 and were trading at US$0.07 on OTC markets by midmorning Wednesday.
Unsurprisingly, the two major companies reporting results after yesterday’s market close led Wednesday’s duds.
Cronos Group Inc (TSE:CRON) (NASDAQ:CRON) sank 4.8% in Toronto at C$9.86 on Wednesday after it fell short of revenue estimates for its third quarter, coming in at C$12.7 million compared to analyst targets of $14.1 million.
The Canadian producer felt the pain of a cannabis market suffering from oversupply, with its revenue per gram of cannabis sold falling to $3.75.
In the US, Cronos shares tumbled 4.5% to trade at US$7.48.
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