Tuesday, February 11, 2020 7:23:15 PM
FEBRUARY 10, 2020
BY JAYSON MACLEAN
https://www.cantechletter.com/2020/02/another-bottom-is-coming-for-cannabis-stocks-raymond-james/
Cannabis Stocks
Even with good news coming out of Alberta last week, the weeks and months ahead are still looking dark for Canada’s cannabis stocks.
So says Raymond James analyst Rahul Sarugaser, who on Monday delivered an update to clients on the sector, saying that upcoming earnings reports from a number of names will likely be a negative for cannabis.
The province of Alberta last Friday announced that sales of cannabis vape products would begin starting as soon as this week, as the province completed its review of the product which had been suspended earlier this year after an outbreak of vape-related illnesses in the US and Canada sparked concerns about the products.
“Government reviewed the available evidence, data and other provinces’ decisions on cannabis vaping and determined that Alberta will allow for the sale of cannabis vapes,” said Heather Holmen, communications manager for Alberta Gaming, Liquor and Cannabis, to the Calgary Herald on Sunday. “From a government perspective, it was important to review the evidence that was available and ensure that the decision was
made in the best interest of Albertans.”
The decision comes as a breath of fresh air for Canada’s pot industry which has been hampered by a slower-than-anticipated rollout of retail across the country, says Sarugaser, who pointed out that Alberta, which has just 15 per cent of Canada’s population, currently has over 400 cannabis retail stores, compared to the rest of the country, with the total number for Canada sitting at less than 800 stores.
“While we expect this news could buoy the entire Canadian cannabis sector today, it is most pertinent for companies that have established strong portfolios of vape products: Cronos Group (Cronos Group Stock Quote, Chart, News TSX:CRON) and Organigram Holdings (Organigram Holdings Stock Quote, Chart, News TSX:OGI), in particular,” wrote Sarugaser.
Last week, both Tilray (Tilray Stock Quote, Chart, News Nasdaq:TLRY) and Aurora Cannabis (Aurora Cannabis Stock Quote, Chart, News TSX:ACB) announced they’d be laying off ten per cent of their respective employees as a cost-saving measure, with Aurora adding a lower-than-expected revenue guidance for its upcoming quarter.
Sarugaser says that with more pot stocks about to announce earnings, the sector could be in for more pain, with another downturn in the space likely to come, according to the analyst.
“The first bottom we saw in November and December 2019, and we predict a second bottom in February or March 2020. We anticipate a sector rebound beginning around May 2020 — motivated by Cannabis 2.0 revenues and expanded cannabis retail footprint across the country—and materializing more fully during the back half of this year,” Sarugaser wrote.
“For investors already active in the cannabis market, we would see a switch into OGI or CRON as sensible while they ride out the storm. For new cannabis investors, we recommend patience: wait until the turnaround we anticipate in May,” Sarugaser wrote.
Last year was an all-around bad one for cannabis stocks, with neither Cronos nor Organigram escaping punishment Cronos finished 2019 down 31 per cent while Oranigram lost 34 per cent of its value.
So far in 2020, CRON is down 11 per cent and OGI is down four per cent.
Recent OGI News
- Organigram investiert in Sanity Group, ein führendes deutsches Cannabisunternehmen • Business Wire • 06/26/2024 01:15:00 PM
- Organigram investe in Sanity Group, società leader tedesca nel settore della cannabis • Business Wire • 06/26/2024 01:15:00 PM
- Organigram investit dans Sanity Group, un chef de file du cannabis en Allemagne • Business Wire • 06/26/2024 01:15:00 PM
- Organigram Invests in Sanity Group, a Leading German Cannabis Company • Business Wire • 06/25/2024 12:00:00 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 05/28/2024 01:38:30 PM
- Organigram Signs Three Year Supply Agreement with Avida Medical in UK • Business Wire • 05/28/2024 10:00:00 AM
- US Futures Remain Steady Amid Wall Street Caution Ahead of April PPI Report • IH Market News • 05/14/2024 11:18:01 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 05/14/2024 11:17:16 AM
- Organigram Reports Second Quarter Fiscal 2024 Results • Business Wire • 05/14/2024 10:00:00 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 05/08/2024 03:29:51 PM
- Organigram to Report Second Quarter Fiscal 2024 Results on May 14, 2024 • Business Wire • 05/08/2024 12:00:00 PM
- Organigram Recognized for Executive Gender Diversity by the Globe & Mail’s Women Lead Here Report for the Fourth Consecutive Year • Business Wire • 04/08/2024 10:00:00 AM
- Organigram’s Popular SHRED Brand Surpasses $200 Million in Yearly Retail Sales • Business Wire • 04/03/2024 12:06:00 PM
- Organigram Successfully Closes Previously Announced Underwritten Public Offering • Business Wire • 04/02/2024 12:51:00 PM
- Organigram Announces Pricing of Overnight Marketed Public Offering • Business Wire • 03/27/2024 12:56:00 PM
- Organigram Announces Launch of Overnight Marketed Public Offering • Business Wire • 03/26/2024 11:06:00 PM
- Organigram Invests in U.S. Based Open Book Extracts Representing Inaugural Jupiter Investment • Business Wire • 03/26/2024 05:36:00 PM
- Organigram Receives Health Canada’s Final Redetermination on Jolts • Business Wire • 03/22/2024 11:00:00 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 02/28/2024 03:42:13 PM
- Organigram Applauds the Standing Committee on Finance’s Recommendation on Excise Duty • Business Wire • 02/28/2024 01:00:00 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 02/13/2024 12:23:18 PM
- Organigram Reports First Quarter Fiscal 2024 Results • Business Wire • 02/13/2024 11:00:00 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 02/07/2024 02:25:53 PM
- Organigram to Report First Quarter Fiscal 2024 Results on February 13, 2024 • Business Wire • 02/07/2024 11:00:00 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 01/31/2024 01:36:42 PM
Glidelogic Corp. Becomes TikTok Shop Partner, Opening a New Chapter in E-commerce Services • GDLG • Jul 5, 2024 7:09 AM
Freedom Holdings Corporate Update; Announces Management Has Signed Letter of Intent • FHLD • Jul 3, 2024 9:00 AM
EWRC's 21 Moves Gaming Studios Moves to SONY Pictures Studios and Green Lights Development of a Third Upcoming Game • EWRC • Jul 2, 2024 8:00 AM
BNCM and DELEX Healthcare Group Announce Strategic Merger to Drive Expansion and Growth • BNCM • Jul 2, 2024 7:19 AM
NUBURU Announces Upcoming TV Interview Featuring CEO Brian Knaley on Fox Business, Bloomberg TV, and Newsmax TV as Sponsored Programming • BURU • Jul 1, 2024 1:57 PM
Mass Megawatts Announces $220,500 Debt Cancellation Agreement to Improve Financing and Sales of a New Product to be Announced on July 11 • MMMW • Jun 28, 2024 7:30 AM