Since their IPO, it’s been a slippery slope down for Green Lane Holdings. The company had an original IPO price of $17 per share and is currently trading at just $6.42 at the current time. The company has consistently been declining and early investors or the majority of the investors are wondering when this company might turn around. Let’s first take a look at Greenlane holdings and what they are all about.
To start off, the company picked probably one of the worst times possible to IPO within the cannabis sector. We saw the peak of the market in late April followed by month after month of declines and one of the worst bear markets the cannabis sector has ever seen. Is it just bad timing and overall market conditions or is there something else that is driving the selloff? Greenlane Holdings is one of the leading vaporizer distributors in North America and they also have multiple e-commerce websites that distribute products direct to consumers. Greenlane holdings have assisted in building multiple successful brands including PAX and JUUL and work closely with these companies.
Greenlane Holdings recently reported their Q2 earnings and they were quite impressive. The company generated 53 million in revenue which beat analyst expectations and set a fresh all-time record for the company. Greenlane Holdings saw strong revenue growth from increased sales in the North American cannabis, CBD and liquid nicotine markets. One of the biggest increases in revenue came from a $10.5 billion dollar increase in electronic cigarettes most notably for JUUL. As these markets continue to develop and become more profitable Greenlane Holdings should be set to profit. The company also ended the second quarter with a strong cash position of $69 million in cash. This allows the company to take advantage of future investment opportunities within the fast-paced cannabis sector.
This brings us to our conclusion as to why Greenland Holdings has sold off so much, yet the company is breaking new records, especially after their recent quarterly earnings report. One thing to note is the fact that the company carries substantial risk with the US/China trade war as many of their products are manufactured in China and sold in the US. These factors along with the overall bearish sentiment in the cannabis sector, and horrible timing for their IPO could have brought this stock down to 52-week lows, but if we see an uptick in the cannabis sector, this stock could soar. Long story short, Greenlane Holdings has not been trading for very long and is currently sitting at 52-week lows, but if this company keeps growing revenue like it is doing, then I don’t think it will stay this low for much longer. One of the biggest factors for us right now will be how long it takes the cannabis sector to get out of this current bear market so stocks like Greenlane Holdings and other companies that are generating hefty revenues can be rewarded for their success. Time and patience are virtues in this sector.
GNLN shares were trading at $6.73 per share on Wednesday morning, up $0.31 (+4.83%). Year-to-date, GNLN has declined -68.10%, versus a 18.04% 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...
