This was another historic week on the stock market, as COVID-19 fears wreaked havoc on the indexes. The Dow Jones Industrial Average fell 13% on Monday, a down move like we have not seen since 1987.
Growth and real estate sectors were hit the hardest, with many cannabis stocks continuing their downward trajectory as investors fled to cash.
Yet, the cannabis sector overall outperformed the S&P 500. This could be because investors are covering shorts or buying because they believe certain companies are oversold.
Sales of cannabis in Ontario, Canada have actually been on the rise, due to consumers not working and ordering (maybe hoarding) cannabis from their homes.
Aurora Cannabis’ (ACB) Former CEO Sells 12 million shares
ACB’s former CEO Terry Booth sold about 12 million shares on the open market that was stated as part of his transition into retirement. Many ACB investors expressed their concerns as to why he would sell such a large position at these extreme lows in the market.
ACB is set to report earnings in May and is still awaiting word on a new CEO and a possible partnership/investment. This has been a rumor spread across the investment community as many anticipated ACB to announce something in the coming weeks. It seems as if ACB could be waiting for the storm to blow over on the markets before announcing anything at this point.
Innovative Industrial Properties (IIPR) plunges as real estate gets hammered
IIPR plunged to a 52-week low of $40 as the real estate sector got hammered on Wednesday. There were no material changes in IIPR’s business this week but real estate has been a sector that’s been hit hard due to the fact that investors are becoming increasingly worried about tenants being able to pay their leases and continue to fulfill their commitments.
We believe that IIPR is a solid company and unless the situation gets drastically worse (let’s hope not, but it could) for a prolonged period of time, this is an interesting investment. That’s because IIPR from a valuation perspective has become a lot more attractive.
Canopy Growth (CGC) to close Tokyo smoke locations in Ontario amid COVID-19 crisis
Canopy Growth announced this week that they would be closing all of their Tokyo Smoke retail locations across Canada. This comes as governments and companies are fighting to stop the spread of COVID-19 across North America.
The COVID-19 pandemic is having a tremendous effect on the overall economy, including the cannabis sector. Luckily for CGC, the company is sitting on a war chest of cash, which will be important to weather this current economic storm.
ACB shares were trading at $0.76 per share on Friday afternoon, up $0.10 (+15.03%). Year-to-date, ACB has declined -64.81%, versus a -27.12% 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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