Canopy Growth Corp (WEED)

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Short-sellers renew bearish bets on marijuana companies?LARRY MACDONALD?THE GLOBE AND MAIL?June 14 at 17:24 ET
https://www.theglobeandmail.com/investing/markets/inside-the-market/article-short-sellers-renew-bearish-bets-on-marijuana-companies/?More short-sellers are placing bets that marijuana stocks are headed downward as five cannabis stocks hit the latest short-sellers lists published by The Globe and Mail.?The five were: Aphria Inc., Canopy Growth Corp., Cannabis Wheaton Income Corp., Medmen Enterprises Inc. and Delta 9 Cannabis Inc. Short-sellers’ bearish views on the fledgling industry thus appear to have acquired more conviction in recent weeks. ?Of course, the legalization of cannabis in Canada and several states within the United States creates a substantial commercial opportunity. But short-sellers seem to be saying that the run-up in marijuana stocks over the past 18 months may be overestimating the growth potential.

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Two new faces in the first list are cannabis firms Aphria and Canopy Growth. Aphria, one of the lower-cost growers, has seen its stock slide this year after a big run-up in 2017. Canopy Growth is considered the dominant firm in the sector but its valuation is rich and uncertainties abound, such as government regulations and a potential for a supply glut from the plethora of new producers rushing in.

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There are also companies from sectors that have become richly valued from investors stampeding in, such as lithium (used in electric cars) and cannabis. The latter sector alone has seven entries on the second list.?Several new companies have landed on the second list this month: Let’s look at some of them.?Cannabis Wheaton Income Corp., to be renamed Auxly Cannabis Group Inc., provides financing to marijuana producers in return for an equity stake and share of their output. The company had revenue of just more than $600,000 in the last quarter and is valued at $700-million on the Canadian Venture Exchange.?MedMen Enterprises Inc., an upscale cannabis retailer in the United States, listed for trading on the Canadian Securities Exchange in May. It aims to raise capital to expand operations faster. It is valued at $1.4-billion and currently has 12 stores in New York State, Nevada and California.
Delta 9 Cannabis was one of the first companies to be licensed for commercial medical cannabis production in Canada. But the company hasn’t aggressively scaled up to grab market share, so it remains a niche player in Manitoba and has a declining share price.

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