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Home / Business / Cannabis shares rally for another day after House passes bill aimed at lifting federal ban on weed

Cannabis shares rally for another day after House passes bill aimed at lifting federal ban on weed



Cannabis shares met another day Wednesday, bent by a historic congressional committee to pass a bill aimed at lifting the federal ban on weeds, as well as strong gains for Curaleaf after it posted a narrower-than-expected third quarter loss.

Curaleaf's American Shares

CURLF, + 11.55%

CURA, + 11.78%

was last up 1

2.2% when investors deducted revenue losses.

The Massachusetts-based company had losses of $ 6.8 million, or a penny per share, against losses of $ 33.7 million, or 9 cents per share in the previous year. Revenue rose to $ 61.8 million from $ 21.4 million. Analysts polled by FactSet had projected a loss of two cents a share of revenue of $ 63.6 million.

GMP analyst Robert Fagan, who is considering the stock a buy, said the numbers were "largely in line with our relatively high expectations." His revenue number was below his $ 67 million estimate.

He highlighted positive things, including good cost control, a sequential increase in sales and that vaping fears only had a strong effect on Select's sales in the quarter. The company bought the Select brand in May for CS1.27 billion ($ 954.7 million).

Read now: While the pots are sinking, these two guys collected just $ 120 million to buy

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MKM analyst Bill Kirk raised the estimate of the fair value of the stock to C $ 8 from C $ 6, but maintained its neutral rating on the stock.

"Admittedly, after weak revenue reports for most of the sector, it feels good to use positive numbers when talking about Curaleaf's profitability," the analyst wrote in a note. "However, we still can't get there with appreciation."

Sentiment on Wednesday was strengthened after the House Judiciary Committee voted for the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, which appears to remove the federal ban on cannabis and expel the past conviction.

Read: Aurora Cannabis stock suffers worst day in more than five years, analyst says "it would be fair for investors not to believe them"

The bill, introduced by committee chairman Jerrold Nadler, a New York Democrat, voted 24-10 on Wednesday.

"The Senate will take its own time, but then the Senate always does," Nadler said at a press conference Tuesday to introduce the bill. He also aimed to be heard in front of Wednesday's legislative session for the bill: “The energy and political pressure from the various states is growing rapidly. The Senate is also subject to this. We will achieve this. "

Also read : House panel passed bill aimed at legalizing marijuana, but the top Democrat admits that" the Senate will take its own time. »

In the company's news, Harvest Health & Recreation Inc.

HRVSF, + 5.86%

HARV, + 5.60%

became the last cannabis company to scale down a previously agreed agreement, its plan to purchase cannabis licenses in Pennsylvania, Delaware, New Jersey and Maryland from CannaPharmacy Inc. in a deal originally priced at $ 88 million in cash.

View now: Canada asks cannabis companies to improve cross-disclosure disclosures

Instead, the companies have agreed that Harvest Health will buy Franklin Labs LLC, a unit of CannaPharmacy, for $ 26 million will be split between $ 15 million in cash and a $ 11 million bond.

Harvest chief Jason Vedadi said the new terms will help the company promote its revenue and profitability goals.

Cannabis shares are still undergoing a period of closure following a deep decline in stock prices. Many companies are reviewing contract terms, cutting costs and assessing property sales as the legal market develops more slowly than expected and companies continue to make losses.

Harvest announced the announcement as it posted a third-quarter loss of $ 39.1 million, 14 cents per share, wider than the $ 453,000 loss posted the year before. The company did not offer a loss per share for the previous year. Revenue rose to $ 33.2 million from $ 11.2 million. There are too few FactSet estimates to offer a reliable consensus.

In a similar feature, Neptune Wellness Solutions Inc.

NEPT, + 2.23%

NEPT, + 2.95%

said on Wednesday that it has reached a mutual agreement with Canopy Growth Corp.

CGC, + 16.45%

WEED, + 15.07%

to amend and reverse their cannabis treatment agreement. The parties have agreed on a revised schedule of treatment volume committed to Neptune by Canopy and on the removal of certain preferential rights granted to Canopy in connection with Neptune's capacity and prices.

"From June 30, 2020, volume and pricing will be negotiated between the two parties based on market conditions," Neptune said in a statement. The 3-year agreement remains intact. Neptune's US shares were down 3.7%, while Canopy was up 12%.

Elsewhere in the sector, Tilray

TLRY, + 3.05%

was up 2.2%, Aphria Inc.

APHA, + 3.71%

APHA, + 4.40%

was up 3.1% and Cronos

CRON, + 3.13%

CRON, + 2.59%

climbed 1.8%.

Aleafia Health

ALEAF, + 6.91%

ALEF, + 2.94%

was up 9.8%, Hexo

HEXO, + 6.04%

HEXO, + 5.31%

was up 5.9% and Organigram

OGI, + 5.17%

was up 5.6%.

medme

MMNFF, + 3.08%

overall 5.2%. GW Pharma

GWPH, -3.25%

was down 3.0%.

ETFMG Alternative Harvest ETF

MJ, + 2.96%

was up 2.1%, with 25 of its 36 constituents trading higher. The Horizons Marijuana Life Sciences ETF

HMMJ, + 5.32%

was up 6.5%, with 42 of its 54 member shares higher.

S&P 500

SPX, -0.83%

fell 0.8% and Dow Jones industrial average

DJIA, -0.85%

was down 232 points, or 0.8%.

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