Cannabis Stocks Tumble on Trade Worries


Monday was a difficult day for cannabis stocks. Weighed down by the drastic escalation of trade tensions between Washington and Beijing, the marijuana industry, despite not having much to do with China, still shrank for the most part as major indexes tumbled across the U.S.

Neither Canadian companies nor the states were spared as most companies tumbled throughout the day. The ETFMG Alternative Harvest ETF, one of the two benchmarks for the cannabis sector alongside

The Horizons Marijuana Life Sciences Index, fell 5.2 and 4.4 percent respectively. It’s sister fund, the US Marijuana Index ETF, also fell by 2.8 percent. Since the beginning of the month, all three ETF’s have fallen by 7 percent or more.

Canopy Growth Corp , Tilray (NASDAQ: TLRY), Cronos Group (NASDAQ: CRON), and Aphria (NYSE: APHA) all fell substantially, dipping between 6.3 to 7.8 percent. Smaller cannabis firms like Hexo Corp (TSE: HEXO) also tumbled 7.2 percent today.

Monday’s decline comes as several major cannabis companies are expected to report their earnings this week. Both Tilray and Aurora (TSE: ACB)(NYSE: ACB) are set to report their figures on Tuesday after the closing bell, with Organic Dutchman Holdings (TSE: TGOD) and CannTrust Holdings (TSE: TRST) also being set to report on the same day.

Aurora fell by 3.8 percent despite other news from the company, announcing that they had delivered their first batch of cannabis derivatives alongside their partner, Radient Technologies.

The news was seen as a good sign for Aurora, who benefits from Radient’s advanced CBD derivate production capacity. Eventually, their Edmonton facility is expected to reach an output of up to 300,000 kg of cannabis biomass.

“Aurora recognized early that high-throughput, high-quality extraction technologies would be a competitive advantage in a rapidly developing cannabis industry. Our investment will begin to pay dividends with Radient achieving fully licensed, commercial status. Once scaled up, the addition of Radient’s technology will significantly increase our ability to deliver high-value cannabis products at scale, complementing our existing internal extraction capabilities, which will support a full suite of derivative products,” said Terry Booth, CEO of Aurora. “Cannabidiol (CBD) derived from hemp requires the level of throughput that Radient’s technology and state-of-the-art second facility will provide to existing and future medical, wellness and consumer markets. We look forward to working with Denis and the Radient team to further our global position in the derivative markets.” 

Other cannabis market developments include Aleafia Health (TSE: ALEF), which released their first-quarter earnings today and reported losses of $20.2 million – declining around 4.9 percent.

Both Organic Dutchman Holdings and CannTrust had completed new agreements to distribute their products in various provinces, while Acreage Holdings (CNSX: ACRG.U) fell by 6.2 percent after announcing it was selling various real-estate assets it owned to a REIT that had recently been formed.

The last piece of news related to the cannabis markets on Monday came from Vivien Azer, analyst and Cowen & Cowen and arguably Wall Street’s leading expert on the cannabis industry, initiated coverage of Greenlane Holdings (NASDAQ: GNLN), issuing a “buy” rating and set an ambitious target price for the company. Greenlane shares also fell 4.4 percent today.