After Canopy Growth (CGC) posted a positive earnings surprise in their quarterly report last Friday, the cannabis market has been relatively stable and a couple of stocks have seen shares rally higher this week.
A once very bearish analyst Bill Kirk at MKM Partners changed his tone immediately last week after CGC’s earnings. The change in analyst sentiment, along with interested bargain hunters, were some of the contributing factors that lead to the rise in cannabis stocks this week.
Innovative Industrial Properties (IIPR)
Innovative Industrial Properties has been on a tear over the past few weeks as investors get ready for their Q4 2019 earnings next week. Since December 2019, IIPR’s stock has run from $70 per share to well over $100. Therefore, it’s easy to assume investors are expecting an earnings beat.
The company recently raised over $200 million after they issued more shares, and the market is clearly happy with what they are doing. Most of the time the market does not like when a company raises capital in the form of share issues, but that’s not the case for IIPR. The company has a clear path towards profitability and so far any capital they have raised has been put straight to work.
Aurora Cannabis (ACB)
Aurora Cannabis has been leading the charge this week for cannabis stocks after
Last Friday Bill Kirk at MKM Partners gave ACB an upgrade, due to the improving balance sheet and ongoing changes within the company. As a result, investors were buying shares of ACB this week and the stock is trading up roughly 10% over the past 5 days.
ACB is currently in the hunt for a new permanent CEO, who investors are hoping he/she will be able to steer the company towards profitability.
The company is also looking for an improvement in the Canadian retail market, especially in the nation’s most populous province of Ontario. Currently, the province has less than 100 stores when it was projected they should have closer to 1000.
In addition, ACB also announced that they would be offering discount products that would further combat the black market.
Australis Capital (AUSAF)
This week Australis Capital announced that they would be terminating their merger with Folium Biosciences. Australis Capital was launched in 2018 as Aurora Cannabis’s venture capital arm focused on investment in the United States cannabis market. The stock has been halted for weeks following the merger with Folium Biosciences and resumed trading on Thursday of this week on the OTC market.
The company closed the trading day on Thursday down 26% on the merger termination news. Australis Capital will have a conference call for investors on the 26th of February as investors are eager to learn what really caused the company to terminate the merger.
ACB shares were trading at $1.65 per share on Friday morning, down $0.03 (-1.79%). Year-to-date, ACB has declined -23.61%, versus a 3.87% rise in the benchmark S&P 500 index during the same period.
About the Author: Aaron Missere
Aaron is an experienced investor who is also the CEO of Departures Capital. His primary focus is on the cannabis industry. He also hosts a weekly show on YouTube about marijuana stocks. Learn more about Aaron’s background, along with links to his most recent articles. More...
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