As homebound consumers worked out some of their boredom and anxiety
with cannabis, shares of many of the main players performed very
well in 2020. In 2021, however, cannabis shares have been hot and
cold. Many investors are looking down the path to federal
legalization for big profits. Federal legalization might not
happen, so it is probably better to hope for the best and plan for
the worst, as the old saying goes. Regardless of what happens on
Capitol Hill, volumes are starting to pick up and we could be
getting ready to bounce off this latest correction.
During the global Covid-19 pandemic, medical marijuana was
deemed "essential,” which definitely had an impact on increased
sales. U.S. legal cannabis sales grew 46% year over year to $17
billion in 2020. The total U.S. economic impact from marijuana
sales in 2021 is expected to reach $92 billion – up more than 30%
from last year – and upwards of $160 billion in 2025, according to
analysis from the recently published MJBizFactbook.
Tilray, Inc. (NASDAQ: TLRY), Pure
Harvest Corporate Group, Inc. (OTC: PHCG), Canopy
Growth (NASDAQ: CGC), and Aurora Cannabis (NASDAQ:
ACB) are four companies that could have major moves in
front of them as investors add cannabis stocks to their
portfolios.
Tilray, Inc. (NASDAQ: TLRY) produces
high-quality cannabis and cannabis-derived products primarily for
global recreational adult-use. Tilray has off and on been the
subject of speculation by the players at Wall Street Bets. Tilray
offers a broad-based portfolio of brands and adult-use products
through its wholly owned subsidiary, High Park Holdings Ltd. The
Company also supplies high-quality medical cannabis products to
tens of thousands of patients in 17 countries on five continents
through its subsidiaries in Australia, Canada, Germany, Latin
America and Portugal, and through agreements with established
pharmaceutical distributors. Analysts at Cantor Fitzgerald recently
upgraded the stock after its merger with Aphria in May. Following
the merger, the combined Tilray/Aphria has the largest global
geographic footprint in the industry, low-cost production
facilities, and a wealth of international growth opportunities.
On July 28, 2021 Tilray reported 2021 fiscal year and fourth
quarter results. Net revenue increased 27% to $513 million compared
to the prior year net income of $33.6 million. Tilray also posted
adjusted EBITDA of $12.3 million, net cash from operating
activities of $8.3 million, and positive free cash flow of $3.3
million in Q4. After finalizing the Aphria acquisition, Irwin D.
Simon, Tilray’s Chairman and Chief Executive Officer, said, "In a
very short period of time since our business combination was
finalized, we transformed and strengthened Tilray, delivered solid
results amid continued COVID-19 lockdowns and restrictions and
achieved $35 million in synergies to date – well on our way to
delivering $80 million in cost savings over the next 16 months."
For more information on Tilray, Inc. visit www.tilray.com
Pure Harvest Corporate Group, Inc. (OTCQB:
PHCG) has started getting a lot of attention from cannabis
investors, since the Company recently announced Q1 2021 revenues
increased by 92.65% from Q4 2020 revenue. Not only did revenues
increase, Pure Harvest Corporate Group did more revenues in the
first quarter of 2021 than it did in all of 2020. Q1 2021 Revenue
was $794,148 versus 2020 Year End Revenue of $735,690. The
significant increases are largely attributable to continued growth
in sales at the Company’s Colorado marijuana operations located in
Dumont, CO. The Company’s Test Kitchen subsidiary began generating
revenue with the launch of their white label program and beta
product release.
On August 03, 2021 Pure Harvest Corporate Group signed an
agreement to supply CBD products to individuals covered under
self-insured corporate health and wellness plans through
Third-Party Administrators. This assignment agreement with
Doc.U.Care, Inc. allows Pure Harvest to be the exclusive provider
of CBD, hemp, cannabis, cannabinoids, fungi, nutraceuticals, and
other plant-based health and wellness products, on behalf of
Doc.U.Care to patients within a network of Third-Party
Administrators (“TPAs”) for self-insured corporate health and
wellness plans. Doc.U.Care and the TPA’s national patient network
currently consists of 550,000 employees and their families with the
opportunity to provide healthcare services to an additional
2,200,000 employees on or before the 4th quarter of 2022.
Doc.U.Care is an African American-owned healthcare development
company that partners with global healthcare leaders, TPAs, and
providers to address the disruptive forces impacting the healthcare
industry. The President of Doc.U.Care, Karlos Dansby, is an NFL
veteran who received All-American recognition at Auburn University
and played professionally for the Arizona Cardinals, the Miami
Dolphins, the Cleveland Browns, and the Cincinnati Bengals.
Pure Harvest Corporate Group uses an “acquire and integrate”
approach to acquire high-potential operating cannabis businesses
for equity. Since 2018, the Company has made five such
acquisitions, some of which are now hitting new records in sales
each quarter. The Company plans to acquire licensed medical and
recreational marijuana dispensaries, cultivation facilities and
production facilities in states which allow publicly traded
companies to own and operate dispensaries, cultivation facilities
and production facilities. In addition to products tailored to
marijuana retail dispensaries, the Company’s line will incorporate
infused product options including beverages, edibles, topicals,
concentrates, and distillates. Pure Harvest Corporate Group has 25
full-time employees and recently moved into a new, expanded
corporate office in Greenwood Village, CO, an upscale suburban area
on the south side of Denver. For more information on Pure Harvest
Corporate Group visit www.pureharvestgroup.com.
Canopy Growth (NASDAQ: CGC) has the largest
market cap of any cannabis stock with a market value of around $7.3
billion. Canopy Growth offers product varieties in high-quality
dried flower, oil, softgel capsule, infused beverage, edible, and
topical formats, as well as vaporizer devices. Its global medical
brand, Spectrum Therapeutics, sells a range of full-spectrum
products using its color-coded classification system. Through its
Tweed and Tokyo Smoke banners, Canopy Growth has built a loyal
following. Canopy Growth has a deal in place to buy U.S. cannabis
operator Acreage Holdings to grow its U.S. CBD business. Canopy
Growth also purchased AV Cannabis Inc., a Toronto company that
makes vapes, gummies and pre-rolls, in a bid to build more brand
loyalty with customers.
Canopy Growth will report First Quarter fiscal year 2022
financial results on August 6, 2021. Following the release of its
first quarter fiscal year 2022 financial results, Canopy Growth
will host an audio webcast with David Klein, CEO and Mike Lee, EVP
& CFO at 10:00 AM Eastern Time on August 6, 2021. In February,
after the company reported fiscal third-quarter results, CEO David
Klein said Canopy could enter the U.S. legal market for THC
products "during calendar 2021," provided legislation allowed it.
Canopy Growth Corporation, formerly Tweed Marijuana Inc., was
founded by Bruce Linton and Chuck Rifici] in 2013 and renamed
Canopy Growth Corporation in 2015 after a merger with Bedrocan
Canada. For more information on Canopy Growth visit
www.canopygrowth.com.
Aurora Cannabis (NASDAQ: ACB) is one of the
Robinhood investing app's most-held stocks. It also could be a
contrarian's dream, since the Company has not had much in the way
of good news recently. Aurora Cannabis started the year out around
$9.50, ran up to $18.98, and currently trades around $6.93. The
main reason for the decline is that, even with massive volume,
Aurora keeps diluting its shareholders. According to Motley Fool,
after a 1-for-12 reverse split enacted in May 2020, Aurora's share
count has increased from 1.3 million shares in mid-2014 to about
198 million shares by March 31, 2021. In May, Aurora announced a
$300 million at-the-market offering. To add a little salt to the
wound, sales for the third quarter were down by 21% and Aurora
posted a loss as lockdowns of Canadian retail stores impacted
sales.
In mid-July, Aurora Cannabis announced it had delivered a
cannabis shipment worth nearly C$8 million to Israel, which is one
of the largest single shipments of cannabis that Israel has
received. The Company said the sale is a significant step in
advancing the Company's international medical business, which is a
key strategic priority for Aurora as a global cannabis company.
Aurora said with leadership in both Canada and Europe, it is
positioned to be a partner of choice in countries like Israel,
where THC recreational markets are expected to be around the
corner, and non-THC cannabinoids, such as CBD, are advancing toward
legalization. Aurora's brand portfolio includes Aurora, Aurora
Drift, San Rafael '71, Daily Special, AltaVie, MedReleaf, CanniMed,
Whistler, and Reliva CBD. For more information on Aurora Cannabis
visit www.auroramj.com.
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