3 Marijuana Stocks to Watch in February according to MF

February is going to be a big month for the marijuana industry. With Canopy Growth Corp  (TSX:WEED)(NYSE:CGC) expected to release earnings on February 14 and Aurora Cannabis Inc set to do the same on February 11, there’s a lot of news to keep up with. But there’s more than just earnings to look out for. Between Aphria Inc’s (TSX:APHA)(NYSE:APHA) hostile takeover drama and a new round of acquisition mania, there’s enough going on in this industry to keep investors’ hands full for 28 days. The following are just three marijuana stocks worth watching in the busy weeks ahead.

Canopy Growth Corp (TSX:WEED)(NYSE:CGC)

Despite having recently been eclipsed by Aurora on revenue, Canopy is still the #1 marijuana stock by market cap. Its most recent earnings report was widely regarded as a disappointment, with 33% revenue growth and a $330 million loss. On February 14, Canopy is expected to release earnings that cover the period ended December 31. These will show whether revenues from legal cannabis were enough to counteract this company’s slowing growth and mounting losses.

CannTrust Holdings (TSX:TRST)

CannTrust Holdings is another pot stock worth watching in February. CannTrust stood out in 2018 for its steady operating profits when few marijuana companies were able to achieve the same. Whereas other cannabis companies pursued growth at great cost, CannTrust kept things lean and mean. The big question is which strategy will win out in the end. We may get a hint on that front this month, as the company should be releasing an earnings report for the quarter ended December 31 in the next few weeks (based on the date of its previous report).

Aphria Inc (TSX:APHA)(NYSE:APHA)

Last but not least, we have Aphria. Aphria is currently the target of a hostile takeover bid by Green Growth Brands, which is offering less than Aphria’s average 30-day share price. Because management has rejected the bid, Green Growth is going direct to Aphria shareholders. The bid is a long shot because of its low offer of 1.5 Green Growth shares per Aphria share, which would represent a loss for any Aphria shareholder who bought in January. However, many long-term Aphria shareholders purchased at lower prices, so they may be persuaded to sell.

Bottom line

Between legalization, volatile stock prices, and Canopy’s $5 billion deal, the pot industry’s 2018 will be a hard act to follow. But so far, 2019 is holding its own rather well. We’ve already witnessed a rally that has taken Canopy shares north of $65 — approaching their 2018 highs. And with earnings on the horizon, who knows what’s next. The big question is whether cannabis producers will become cash flow positive after running up enormous expenses last year. If the news is good, we may witness a new rally in cannabis stocks that eclipses even what we saw last summer.

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Aphria rises after Citron sells, MedMen sued by former CFO

PLUS CannabisWatch: The Green Organic Dutchman is still building but not selling, tiny weed producer wins POT ticker lottery


Short seller Andrew Left said early Friday he was exiting his position in Canadian cannabis producer Aphria Inc. and had begun to short Cronos Group Inc., citing its high valuation relative to analyst price targets.

Left’s Citron Research said Dec. 18 that it expected Aphria shares to climb to $8 by the end of 2018, and in a Friday tweet said the stock had gained more than 60%. In the Dec. report Citron said it expected Aphria to gain 40% by the end of last year. Aphria APHA, +0.09% APHA, +9.99%  stock is up 14% in Friday trading, and has gained 89% since Citron made its call.

Citron did not return a request for comment.

In the same tweet, Citron said that it was short Cronos CRON, -0.34% CRON, +6.17%  because the stock was trading 70% above sell-side analyst estimates. According to FactSet, there are seven analysts covering the name, with an average target price of $17.61. Including Friday’s rise of 7.5%, Cronos is trading roughly 57% above the average target price, according to FactSet.

Green Growth makes hostile bid for Aphria official

Cronos stock rose 60% since it announced the $1.8 billion investment in the company by Marlboro-maker Altria Group Inc. MO, +0.10%  Thursday, Altria’s CEO said he expects the global cannabis market to reach $40 billion in 10 years with no new cannabis legalization laws, and $250 billion if pot were legal the world over. He said the company wasn’t planning to stop at Cronos when investing in the industry.

Cannabis stocks largely gained Friday, with the Horizons Marijuana Life Sciences Index ETF HMMJ, +2.05%  rising 2.5%, and the ETFMG Alternative Harvest ETF MJ, +1.82%   increasing 2.8% in afternoon trading. The world’s largest pot company, Canopy Growth Corp. CGC, +0.01% WEED, -0.67%  gained 1%, Aurora Cannabis Inc. ACB, +0.13% ACB, +3.98%  is up 3.6%, and Tilray Inc. TLRY, +1.76%  is up 1.9%.

Other cannabis news
- MedMen Enterprises Inc. MMNFF, -7.06%  Chief Financial Officer James Parker, who resigned from his post in November amid an equity raise which it cut in half, is suing the company in Los Angeles Superior Court for breach of contract and wrongful termination, among other things. At the time, MedMen refused to comment on the CFO departure and said cutting the financing nearly in half was due to a “significant selloff” in the global market.

The American pot retailer said early Friday that it expects to report fiscal second-quarter earnings Feb. 27 after the closing bell.

- Canadian weed producer The Green Organic Dutchman TGOD, +4.55% TGODF, +5.13%  — which has not yet sold any pot in the recreational market but is valued by investors at roughly $1 billion — also rose Friday, after it said would be able to increase its capacity to grow cannabis to 202,500 kilograms a year from 156,000 kilograms a year at its facilities in Canada. However, the company also said several phases of construction would be complete either at the long-end of the company’s previous projected schedule, or delayed until 2021. Dutchman stock is up 7% in Friday trading.


- Weekend Unlimited Inc. WKULF, +145.26%  said Friday that it was the winner of Canada’s lottery for the POT ticker. Weekend Unlimited is a tiny cannabis company with a market capitalization of $46 million and no revenue to speak of in 2018, according to FactSet.

“There has been tremendous excitement generated globally for the POT symbol. The POT lottery served to raise the profile of Canada’s leadership in legal recreational cannabis and we believe it will also serve to raise Weekend Unlimited’s leadership profile,” Chief Executive Paul Chu said in a statement. Weekend Unlimited’s over-the-counter shares rose 122% to $0.18.

- Earlier this week Canada-based Organigram Holdings Inc. OGRMF, +1.12% OGI, +0.90%  said it had rolled more than one million joints.