Aphria Inc. shares increased by 14% Friday to lead the cannabis sector, after Jefferies started covering the shares with a purchase rating.
Analyst Owen Bennett awarded Aphria
APHA, + 14.66%
APHA, + 3.85%
a price target of $ 15 ($ 11) which is 115% above today's current trading level, and highlights the link between the valuation and the Company's strategic positioning.
"On our strategic scorecard, Aphria scores high, and third gathered behind Canopy and Aurora," wrote Bennett in a note to clients. "Despite the strong global outlook, the valuation is the cheapest across our room, with claims for inflated assets / insiders weighing."
Aphria has weathered a scandal about the acquisition of Latam Holdings Inc. last year, after short sellers said the deal was overpriced and insiders were unknown recipients. The company formed a special committee to investigate these claims and concluded that there were conflicts of interest for some board members.
The company promised to improve corporate governance and add independent board members to the board. It also transferred former CEO Vic Neufeld and co-founder Cole Cacciavillani out of the board while holding them as advisors.
"With these issues now apparently clarified, as the company continues to perform, and with likely positive developments on US alternative / Canadian derivatives, we see significant reassessment," Bennett wrote. The analyst expects the company to take a similar action in the United States to one taken in Germany, where it has purchased non-cannabis products that can be utilized later.
"In Canadian derivatives, we believe there is a good opportunity for a collaboration with Pax," he wrote.
Canopy Growth Corp. stock
WEED, + 0.52%
was flat Friday before a June vote on the proposal to acquire Acreage Holdings Inc. when cannabis is legalized in the United States The agreement has its roots in bunk beds in a small, cramped house in Klosters, Switzerland, which MarketWatch's Max A. Cherney reported. It was there that Canopy, CEO Bruce Linton and Acreage CEO Kevin Murphy, laid the foundation for the $ 3.4 billion deal.
Read more: In the "marijuana ghetto" at Davos, Canopy Growth found his American potty partner
Related: Canopy's proposed US agreement is a blessing to the US the cannabis sector, says this investor
In regulatory news, New Jersey on Thursday approved a bill that would extend the state's medical cannabis program. Garden State has approved only 12 dispensing licenses as far as Marijuana Business Daily reported. The collection approved a bill that moves to the Senate for a vote on May 30. The move comes after lawmakers were forced to leave an attempt to legalize cannabis for recreational use after they did not agree on rules. Government Phil Murphy plans to add recreational cannabis to the 2020 ballot.
KushCo Holding shares
KSHB, + 3.45%
rose 2.3%, after Canaccord repeated its speculative purchase valuation on the stock after the meeting with the company. KushCo told analysts that it goes beyond the effects of the latest tariffs on goods from China to its customers, who will pay more for their vape hardware.
"Along the way, hardware demand continues to be undiminished, as evidenced by recent POS data from BDS Analytics, which shows a growing share of retail sales in [recreational use] markets, to the detriment of flower [or, dry cannabis] sales," they wrote in a note to clients. "As such, we believe that KSHB's revenue from vape hardware is likely to remain elevated."
Flowr Corp. stock
increased 9.5%, after the company said it had received approval to list on Nasdaq at a later date. Zenabis Global Ltd.
ZENA, + 7.69%
shares rose 5% on their first trading day on the Toronto stock exchange. The Vancouver-based company aims at an annual capacity of 478,900 kg after the facilities have been expanded.
Andres in the sector shares Tilray Inc. shares
fell 1%, Aurora Cannabis Inc.
ACB, + 0.71%
ACB, + 0.71%
was up 0.7% and Cronos Group Inc.
CRON, + 0.07%
CRON, + 3.92%
was up 1.5%. Hexo Corp.
HEXO, + 2.12%
was up 2.1%.
Medical cannabis dealer MedMen Enterprises Inc. shares
was down 1%. Valens GroWorks Corp.
VGWCF + 1.37%
was down 6.7%.
Organigram Holdings Inc.
was up 4.4%.
GW Pharma PLC
was down 0.8% and Green Growth Brands Inc.
GGBXF, + 1.69%
was up 0.3%. Curaleaf Holdings Inc.
CURLF, + 3.88%
was up 3.7%.
Read: How living near a marijuana dispensary affects your home price
Also see: Tilray stock rises after the company shows it can sell the recreational pot
The Horizons Marijuana Life Sciences ETF
HMMJ, + 0.55%
was up 0.9% and ETFMG Alternative Harvest ETF
was up 1.3%.
Dow Jones Industrial Average
DJIA, + 0.37%
was up 0.1% and S & P 500
SPX, + 0.14%
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