Cannabis stocks sank like a stone on Thursday, with broad losses across North American markets.
The North American Marijuana Index, which tracks the top cannabis stocks in the US and Canada, dropped 2.6% to 275.2 points by Thursday's close. The Horizons Marijuana Life Sciences Index ETF was down 3% at C$19.97.
Shares were down 8.1% at C$19.05 in Toronto, down 8.9% at US$14.09 in New York by the close on Thursday. The stock is at its lowest since January.
The firm's net loss in 1Q widened to C$9 million, compared to C$1.5 million in the same period a year ago. Cronos reported revenue of C$6.5 million, which didn't meet the C$7 million that analysts predicted.
In an earnings call on Thursday, Cronos also said it expected adjusted earnings to decline over 2019.
“As we continue to invest in our business, our brands and R&D initiatives, our adjusted Ebitda will likely decline over 2019 but position the company for accelerated growth in 2020,” Chief Financial Officer Jerry Barbato said on the company’s earnings call, as reported by Bloomberg.
“In the first quarter of 2019, the business performed in line with our expectations. We continue to stay laser-focused on our strategy of building our supply chain, distribution, intellectual property and brand portfolios,” said CEO Mike Gorenstein in a statement.
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Canopy Growth announced Thursday it inked a deal with PharmHouse, entering into an offtake agreement. Under the terms, Canopy will buy between 25,000-45,000 kilos of cannabis annually from PharmHouse's greenhouse facility.
Canopy Rivers, the investment arm of Canopy, has had a joint venture with PharmHouse and has been working together to prepare the facility for licensing. Canopy Rivers Inc (CVE:RIV) shares were up 4.3% at C$3.91 in Canadian trading.
"We have witnessed Canopy Rivers and its joint venture partner pour their hard work into the PharmHouse facility in Leamington and couldn't be more satisfied with how it has turned out," said Bruce Linton, Chairman & Co-CEO of Canopy Growth Corporation and Chairman & CEO of Canopy Rivers. "We expect the same for the flower quality that PharmHouse will be providing to Canopy Growth. This is further evidence that the ecosystem model we had hoped for from Canopy Rivers is demonstrating its value and this new offtake agreement with PharmHouse speaks to how well we are managing our numerous assets."
Other laggards on Thursday included CV Sciences (OTCMKTS:CVSI), which was down 2.6% at US$4.87. The firm also reported 1Q earnings, reporting record revenues of US$14.9 million for the first quarter of 2019, an increase of 85% over the same quarter in 2018.
However, the firm disappointed on earnings, reporting a net loss of $9.4 million compared to net income of $0.6 million in the same period in 2018.
A small handful of stocks bucked the trend on Thursday.
High Hampton Holdings Corp (CSE:HC) (OTCMKTS:HHPHF) shares were up Thursday, up 7% at US$0.27 in New York and up 3% at C$0.34 in Canadian trading. The firm announced Wednesday that it bolstered its board with the addition of entrepreneur Robert Allen as chairman.
High Hampton is a cannabis sector investment company focused on opportunities in California.
Aleafia Health Inc (TSE:ALEF) (OTCMKTS:ALEAF) shares were up on Thursday, after it announced it has completed the largest adult-use cannabis order in the company’s history today in Canada. The firm said the delivery is being made to a Canadian provincial government for distribution to online and retail consumers and will contain oils, oral sprays and dried flower products.
Shares were up 3% at C$1.71 in Canadian trading, up 2.2% at US$1.26 in New York.
Contact Katie Lewis at [email protected]