Yesterday’s Cannabis Stock Advances and Declines, and What to Watch For

DUBAI – Rotten Tomato Stocks – This week’s trading opened with some pretty significant advances and declines in the cannabis market, which included some surprises that may impact the remainder of trading activity through Friday. It was an overall rough day at the office for several cannabis stocks, with only a few escaping harm. Here now is a look at what stood out the most among the sector’s players.

Winners: Altria Group (NYSE:MO), and Abbvie Inc. (NYSE:ABBV);
Losers: IM Cannabis Corp. (NASDAQ:IMCC) (CSE:IMCC) and Tilray, Inc. (NASDAQ:TLRY) (TSX:TLRY).

Advancer: Altria Group (NYSE:MO)

Though technically not a pure play cannabis stock, tobacco giants Altria Group have been on a good run since making a very public foray into the cannabis sector through a $1.8 billion investment in recreational pot in 2019.

Earlier this year the company reiterated its plans for a US cannabis opportunity through its investment partners Cronos Group. The further moves into cannabis may help to mitigate the potential woes ahead after the Food and Drug Administration said it planned to ban menthol in cigarettes, also considering requiring lower nicotine content, to non-addictive levels. 

Ten days ahead of its scheduled May 20, 2021 annual shareholders meeting, Altria saw its shares yesterday bump up 1.46%. The upward move was a pleasant shift for shareholders who as of late have noticed the tobacco giant’s stock sliding.

Decliner: IM Cannabis Corp. (NASDAQ:IMCC) (CSE:IMCC)

IM Cannabis Corp. (NASDAQ:IMCC) (CSE:IMCC) shares declined yet again, marking the 5th straight down day for the Israeli-based cannabis company, falling another 2.81% on Tuesday, May 11, 2021.

Now since May 3rd, shares in IMCC have fallen 29.5% from $6.75 to $4.63—and are down a whopping 54% since March 3rd, which was shortly after the company’s significant share consolidation move.

It doesn’t help that IM Cannabis announced the closing of a US$35 million equity financing at US$5.75 per share, when the stock closes at a $0.86 per share discount—representing a nearly 15% haircut right out of the gate.

Plummeting confidence in IMCC has also taken its toll on the patience of shareholders of MYM Nutraceuticals (CSE:MYM) (OTC:MYMMF). Back on April 1, these MYM shareholders received word that MYM management wanted to move forward on a merger with an albatross in the form of IMCC. At that point in the story, IMCC shares were worth $7.51, compared to yesterday’s $4.53 value that’s now nearly 35% lower originally agreed upon.

Further details of IMCC’s interesting valuation was covered in a previous report on Rotten Tomato Stocks.

Advancer: Abbvie Inc. (NYSE:ABBV)

Despite an onslaught of investigations of a company it had agreed to acquire, shares of Abbvie finished the day up 0.41% on Monday, May 10, 2021.

The pharmaceutical giant isn’t necessarily a sole cannabis stock, but it is the maker of the popular THC-containing drug Marinol.

Technically then, AbbVie is a way to invest in the medical cannabis market while also gaining exposure to the broader pharmaceutical sector.

Its drug Humira recently retained the top spot on the list of the top 20 selling drugs in 2020—garnering the company a mega revenue of nearly $20.4 billion. However, when its patent expires in 2023, Humira will be facing challengers, which will allow for more biosimilars to enter the game. 

Decliner: Tilray, Inc. (NASDAQ:TLRY) (TSX:TLRY)

In a potential case of shifting attention, Tilray didn’t announce its last quarter’s financial results. Not a press release, nor conference call was issued. Filed as a stand-alone business ahead of its is merger with cannabis rival Aphria, Tilray’s numbers weren’t great.

During the March 2021 quarter, Tilray’s revenue slipped to $48 million, down $4 million from Q1 2020’s $52 million.

Equal to its revenue numbers, Tilray’s March quarter filing also showed its accounts payable jumped by more than $30 million, to $48 million at quarter’s end. Thanks to a lawsuit settlement, other accrued expenses rose by more than $20 million to $60 million.

Tilray’s solo March losses were $341 million, or $2.01 a share. Approximately $263 million of that loss came from revaluation of outstanding stock warrants, while another $45 million came from settling a lawsuit.

On the trading day, Tilray stock lost over 7% on May 10, 2021.

Article Source: Rotten Tomato Stocks


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