The rally for the market and for cannabis stocks abruptly ground to a halt when the market plunged Thursday.  The ETFMG Alternative Harvest ETF (MJ) traded down about 10% in just one day.  Here are some news stories in cannabis stocks from this week:

HEXO (HEXO) reports Q3 earnings

On Thursday, before the market opened, HEXO reported third-quarter fiscal 2020 financial results. The company grew net revenue by 30% to $22.1 million and improved its operational performance. Some of the key operating highlights were their gross revenues increased by 30% to $30.9M from $23.8M in Q2. Adult-use grams and gram equivalents sold increased by 42% to 9,338 kg compared to Q2. 

Their gross margins increased to 40% from last quarter. Operating expenses decreased to $26.8M which is exactly what investors were looking for. As cannabis companies struggle to adjust to the current market conditions due to the COVID-19 global pandemic, operating expenses have become an increasing concern. During these times it’s extremely important that companies operate much more efficiently in order to ensure the longevity of their business. Despite the positive results, HEXO was not able to hold on to their gains as the stock closed down 6% on Thursday due to the broad-based selloff in the market.

Aurora Cannabis (ACB) continues to slide

ACB continued to lose momentum this week as the stock plunged below a key $14 support level many traders have been watching since the company skyrocketed after their quarterly earnings last month.  ACB is yet to announce their much anticipated full-time long term CEO and they could be saving the news for more favorable market conditions. 

Akerna (KERN) to join the Russell index

This week Akerna announced it is set to join the small-cap Russell 2000® Index and the broad-market Russell 3000® Index. This will take place at the end of this year’s reconstitution of the Russell stock indexes. Being included in the Russell indexes will provide long term exposure to a broad range of investors and should create substantial brand recognition within the marketplace. 

Aphria (APHA) gives up a substantial amount of its gains

Even one of the strongest stocks in the cannabis sector gave up a substantial amount of gains this week.  APHA plunged over 10% into the close on Thursday’s trading session. APHA has been among one of the best-performing cannabis stocks during this recent market rally but based on Thursday’s performance it just goes to show how fast sentiment has shifted. If the market continues to see panic selling we could see potential buying opportunities arise for best-of-breed stock like APHA.  

Want More Great Investing Ideas?

9 “BUY THE DIP” Growth Stocks for 2020

Bull Market or Bull S#*t? How to trade today’s stock bubble and prepare for the return of the bear market.

7 “Safe-Haven” Dividend Stocks for Turbulent Times

ACB shares were trading at $12.88 per share on Friday afternoon, down $0.03 (-0.23%). Year-to-date, ACB has declined -50.31%, versus a -6.55% 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...

More Resources for the Stocks in this Article