Monday, January 20, 2020 11:01:58 AM
Cannabis 2.0 products just started shipping, and it's widely reported that the shelves were running bare within hours or days depending upon the location.
The company fundamentals will take a little time to catch up to the euphoric PPS rises.
Therefore I see a sector PPS retracement because cannabis investors are more savvy this year. They are putting fundamentals before hype.
So I would rather not see the cannabis euphoria cause another problem one year later for investors, as it did in the spring of 2019 when it burst.
Cannabis Stocks Rebound Big: This Won't Last
Chris Lau - Monday, January 20, 2020
http://www.baystreet.ca/articles/stockstowatch/53927/Cannabis-Stocks-Rebound-Big-This-Wont-Last
Last week, cannabis stocks surged, with Cronos (NASDA:CRON) up 26%, Canopy (NYSE:CGC) up 21%, and Aurora (NYSE:ACB) back to the $2 range and up 29%. The sector found buyers as market sentiment turned euphoric.
Although this rally will not last, it gives investors plenty of trading opportunities.
Fundamentally, Cronos and Canopy have the best chance of survival. At $3 billion and $9 billion in market cap as at last week, respectively, these two have outside companies that injected cash on their balance sheet.
Both firms squandered that money while allowing them to invest in the future. As a bigger firm, the launch of edibles (cannabis 2.0) and more store openings in Ontario are near-term catalysts.
Bullish investors need to ignore the price/sales ratio of all cannabis stocks. $100 million in sales against an $8 billion market capitalization seems silly.
And demand-supply dynamics are unfavorable: Canada still has too much supply and falling prices. The illegal weed market continues to benefit from higher prices on the legal channels. If anything, the legalization market is driving demand in the illegal market higher.
Medical Cannabis
Aphria (NYSE:APHA) and Aurora are carving a niche in medical cannabis. This is an expensive venture because of higher marketing costs and slow sales of medical cannabis. Plus, R&D costs for justifying the medical use of the product will hurt cash flow.
Takeaway
Beware of the latest cannabis stock rally. Sell into the jump and buy into the dips.
Recent CRON News
- U.S. Index Futures Dip, Bank of England Holds Interest Rates at 5.25% • IH Market News • 05/09/2024 11:47:20 AM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 05/09/2024 11:32:35 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/09/2024 11:31:22 AM
- Cronos Group Reports 2024 First Quarter Results • GlobeNewswire Inc. • 05/09/2024 11:30:00 AM
- Cronos Enters United Kingdom Cannabis Market • GlobeNewswire Inc. • 05/07/2024 11:00:00 AM
- Cronos Group Inc. to Hold Virtual 2024 Annual Meeting of Shareholders • GlobeNewswire Inc. • 04/26/2024 08:45:00 PM
- Cronos Group Inc. to Hold 2024 First Quarter Earnings Conference Call on May 9, 2024 • GlobeNewswire Inc. • 04/25/2024 08:15:00 PM
- Marijuana Stocks Up After Banking Reform Progress • IH Market News • 04/09/2024 10:05:42 AM
- Cronos Launches Lord Jones® Chocolate Fusions • GlobeNewswire Inc. • 03/25/2024 11:00:00 AM
- Cronos Group Inc. to Speak at the 36th Annual Roth Conference • GlobeNewswire Inc. • 03/12/2024 08:15:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/05/2024 10:24:53 PM
- Form 4/A - Statement of changes in beneficial ownership of securities: [Amend] • Edgar (US Regulatory) • 03/05/2024 10:21:59 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/05/2024 10:17:58 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/05/2024 10:15:37 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/05/2024 10:13:35 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/05/2024 10:09:49 PM
- Form 10-K - Annual report [Section 13 and 15(d), not S-K Item 405] • Edgar (US Regulatory) • 02/29/2024 09:16:09 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/29/2024 01:06:27 PM
- Cronos Group Reports 2023 Fourth Quarter and Full-Year Results¹ • GlobeNewswire Inc. • 02/29/2024 01:05:00 PM
- U.S. Futures Dip as PCE Data Looms; Modest Gains for WTI and Brent Crude in April Contracts • IH Market News • 02/29/2024 11:13:07 AM
- Cronos Group Inc. to Hold 2023 Fourth Quarter and Full-Year Earnings Conference Call on February 29, 2024 • GlobeNewswire Inc. • 02/14/2024 09:15:00 PM
- Cronos’ Spinach® Brand Ends 2023 as the Number One Flower Brand in Canada1 • GlobeNewswire Inc. • 01/25/2024 12:00:00 PM
- Cronos Enters Australian Cannabis Market • GlobeNewswire Inc. • 01/09/2024 12:00:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 12/19/2023 10:04:29 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 12/19/2023 10:03:02 PM
Avant Technologies Equipping AI-Managed Data Center with High Performance Computing Systems • AVAI • May 10, 2024 8:00 AM
VAYK Discloses Strategic Conversation on Potential Acquisition of $4 Million Home Service Business • VAYK • May 9, 2024 9:00 AM
Bantec's Howco Awarded $4.19 Million Dollar U.S. Department of Defense Contract • BANT • May 8, 2024 10:00 AM
Element79 Gold Corp Successfully Closes Maverick Springs Option Agreement • ELEM • May 8, 2024 9:05 AM
Kona Gold Beverages, Inc. Achieves April Revenues Exceeding $586,000 • KGKG • May 8, 2024 8:30 AM
Epazz plans to spin off Galaxy Batteries Inc. • EPAZ • May 8, 2024 7:05 AM