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Buds & Duds: Cannabis stocks tumble on back of Cronos downgrade

Also on the move was Canopy Growth, CV Sciences, India Globalization Capital and True Leaf Medicine International
stock screen down
Cannabis stocks sank on Wednesday, led by Cronos Group

Cannabis stocks sank like a stone on Wednesday, with broad losses across North American markets. 

The North American Marijuana Index, which tracks the top cannabis stocks in the US and Canada, dropped 2.5% to 297.45 by Wednesday's close. The Horizons Marijuana Life Sciences Index ETF was down 3.8% at C$21.93. 

Duds

Leading the pack and hot on the heels of a downgrade was Cronos Group Inc (NASDAQ:CRON) (TSE:CRON) after Cannaccord analysts downgraded the stock from Hold to Sell, with a price target of C$6.50. 

Shares of the company were down 9.9% at US$18.24 in New York and down 8.5% at C$24.75 in Toronto. 

In a report to clients, Canaccord analysts wrote they were disappointed with the company's latest quarterly earnings and the company's valuation was looking stretched, after gains since December. Since the beginning of 2019, the stock has jumped more than 80%. 

On Tuesday, the company reported revenue of C$5.6 million, below expectations of C$10.4 million. 

READ: Canopy Growth adds Seth Rogen's new cannabis brand to its arsenal

Other laggards on Tuesday included Canopy Growth Corporation (TSE:WEED) (NYSE:CGC), which was down 4% at US$42.89 in New York and down 3.8% at C$57.49 in Toronto.

Earlier in the day, it was announced the company was adding a cannabis brand founded by Vancouver natives Seth Rogen and Evan Goldberg to its arsenal. Houseplant, which the pair debuted on Wednesday, will have its first strain available in British Columbia starting in April.

Houseplant will rely on Canopy’s production and distribution capacity to sell flower, Softgel and pre-rolled cannabis.

Other laggards included CV Sciences (OTCMKTS:CVSI) down 6.3% at US$5.78, Cresco Labs Inc (OTCMKTS:CRLBF) down 1% at US$11.24 and HEXO Corp (TSE:HEXO) (OTCMKTS:HYYDF) down 5.7% at US$6.40 in New York. 

Buds

There were, however, some winners on Wednesday. India Globalization Capital Inc (NYSE:IGC) stock jumped Wednesday after the infrastructure-meets-cannabis company said Hyalolex, a cannabis-based product for patients suffering from Alzheimer’s disease, will be available in dispensaries in San Juan, Puerto Rico.

Shares were up 5.6% at US$2.09 in New York. 

READ: India Globalization Capital stock pops after CBD-based Hyalolex drops for Alzheimer’s patients launches in Puerto Rico

Shares of True Leaf Medicine International Ltd (CSE:MJ) (OTCMKTS:TRLFF) jumped earlier on Wednesday, up 2.4% at C$0.42.

Last week, the Vernon, BC-based cannabis and hemp wellness brand for pets announced news it widening its distribution to 3,500 stores in North America. 

Contact Katie Lewis at [email protected]

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