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Buds & Duds: Cannabis stocks mixed as key earnings reports are released; TGOD shares rise

Also on the move were CannTrust, 1933 Industries, Tilray and Aurora Cannabis
cannabis leaf
The Green Organic Dutchman ended 1Q with a strong balance sheet and liquidity, including C$224.4 million in cash and restricted cash

Cannabis stocks were mixed on Wednesday, after a number of key earnings reports were released and in tandem with markets across North America.

The North American Marijuana Index, which tracks the top cannabis stocks in the US and Canada, closed up 0.1% to 276.3 points by Wednesday's close. The Horizons Marijuana Life Sciences Index ETF inched up 0.7% at C$20.21.

Buds

The Green Organic Dutchman Holdings Ltd (TSE:TGOD) (OTCMKTS:TGODF) shares were on the up and up Wednesday, after the firm released its first-quarter earnings results on Tuesday after the close, with the organic cannabis company beating estimates on revenue and reporting a strong cash position.

Shares were up 1.4% at US$2.89 in New York, up 1.3% at C$3.88 in Toronto. 

The firm reported revenues of C$2.4 million, compared to analyst estimates of C$2.2 million. TGOD ended 1Q with a strong balance sheet and liquidity, including C$224.4 million in cash and restricted cash, to continue to bankroll its expansion and international growth.

READ: The Green Organic Dutchman beats on revenue and holds strong cash position in 1Q

Shares of CannTrust Holdings Inc (NYSE:TRST) (OTCMKST:CNTTF) continued to roll up Wednesday after the Canadian company reported first-quarter earnings earlier in the week that beat analyst estimates. 

Shares were up 2.1% at C$6.21 in New York, up 1.8% at US$8.34 in Toronto.

The company reported net income of C$12.8 million, or C$0.12 a share, compared with C$11.4 million, or C$0.12 a share, in the year-ago quarter. The consensus estimate called for earnings of $0.05 a share. 

READ: 1933 Industries subsidiary sells, then leases back Las Vegas cultivation site

Other gainers on Wednesday included 1933 Industries Inc (CSE:TGIF) (OTCMKTS:TGIFF), which announced subsidiary Alternative Medicine Association completed a sale and lease-back of its Las Vegas cultivation facility.

Shares were up 2.4% at C$0.44 in Canadian trading. 

"We are pleased to complete the Sale Transaction and leverage our real estate asset to support our growth,” said CEO Brayden Sutton. “We funded the purchase of the land and construction of the facility without incurring any debt, so the full sale proceeds are available for working capital and to fund acquisitions in key cannabis markets."

1933 is a vertically-integrated medical and adult-use cannabis company with operations in the US and Canada. In addition to controlling 91% of AMA, it owns all of Infused MFG and Spire Global Strategy.

Duds

Tilray Inc (NASDAQ:TLRY) was lagging on Wednesday after it released its earnings results late Tuesday that showed higher revenues but widening losses.

Shares were down 2.8% at US$47.39. 

The Nanaimo, BC-based company’s net loss increased to US$30.3 million, or $0.32 per share, compared to a loss of $5.2 million, or $0.07 per share, during the same period last year. Analysts were expecting a loss of around $0.23 for the quarter.

Revenue for the quarter rose to US$23 million (C$31 million), a 195% increase from US$7.8 million during the year-ago period.

READ: Tilray posts higher revenues but widening losses after a busy quarter of acquisitions and expansions

Aurora Cannabis Inc (TSE:ACB) (NYSE:ACB) shares see-sawed on Wednesday, which also released key earnings results late Tuesday. The firm reported lower-than-expected third-quarter revenues and notable net losses, however, the company released news that it nearly doubled production in the quarter.

Aurora's shares fell 5.8% to US$7.91 in pre-market trading Wednesday, but recovered as the day went on. Shares of Aurora were up 3% at C$11.66 by Wednesday afternoon. 

READ: Aurora Cannabis third-quarter earnings miss analyst expectations

The firm reported net revenues of C$65.2 million (US$48.44 million) in the quarter, up from C$16.1 million in the year-ago period but lower than analyst estimates of C$67.5 million (US$51 million). Between 2Q 2019 and 3Q 2019, the firm said revenue was up 20% across key markets, which is notable as it is when the company sold its first recreational cannabis in Canada.

The loss per share was C$0.16 cents, compared to average analyst estimates of $0.05 per share. In the year-ago quarter, the firm reported a net loss of C$20 million or C$0.04 per share.

Contact Katie Lewis at [email protected]

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