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Buds & Duds: Cannabis stocks drop as Cowen cuts Canadian pot sector outlook

The Flowr Corporation and Canntab Therapeutics both saw early gains on Monday after Health Canada approvals

Cronos Group Inc -
Cronos Group fell sharply after it said it was delaying release of earnings

Cannabis stocks dropped sharply on Monday amid overall losses in North American markets.

The North American Marijuana Index, which tracks the top cannabis stocks in the US and Canada, fell 4.2% at 97.6 points. Elsewhere, the Horizons Marijuana Life Sciences Index ETF sank 4.4% at C$8.28, while the OTCQX Cannabis index shed 4.6% to 388.5 points.

Duds

Research firm Cowen has cut its 2020 outlook for the Canadian pot sector once again, according to a BNN Bloomberg report Monday.

Cowen & Co analyst Vivien Azer said in a research note to clients Monday that she has reduced her sales forecast for Canada’s cannabis industry by 32% to C$3.5 billion this year from a prior forecast made in November -- the seventh revision to Cowen’s 2020 expectations for the Canadian pot market, BNN reported.

On a company level, Cronos Group Inc (TSE:CRON) (NASDAQ:CRON) dropped nearly 8% in Canada and 8.4% in the US after it told shareholders that it was delaying its quarterly and yearly 2019 results, scheduled to be released on Thursday.

Shares of the firm traded at US$6.55 and C$8.70 by midday Monday.

Buds

Two Canadian pot companies managed to buck the trend with good news to kick off the week.

The Flowr Corporation (CVE:FLWR) (OCTMKTS:FLWPF) revealed that it has received approval from Health Canada to open 10 additional grow rooms at its flagship Kelowna 1 cultivation facility in the fertile Okanagan Valley of British Columbia, which is now fully operational.

In a statement, the Toronto-headquartered cannabis firm said this brings the total to 20, doubling the company’s capacity to grow premium, indoor flower at the facility. The newly licensed area also includes automated packaging equipment to reduce labor costs and the cost of goods sold, noted the company.

Its shares traded nearly 3% higher in Toronto on Monday morning before leveling out at C$0.97.

Canntab Therapeutics Limited (CSE:PILL) (OTCMKTS:CTABF) also said that Health Canada has granted it a cannabis research licence for continuing the research and development of its pharmaceutical-grade cannabis hard pill formulations at its Markham Ontario facility. 

The company said that after getting a standard processing licence and sale for medical purposes licence from Health Canada, Canntab will begin full-scale manufacturing of its suite of precision oral dose products.

Canntab shares also moved around 1% in the morning before trading flat at C$0.50 in Toronto.

Contact Angela at [email protected]

Follow her on Twitter @AHarmantas

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