A massive block share trade after-hours last week on Cronos Group (TSX:CRON) sent the stock up 40%. That rally continued the following morning but by the end of the day, CRON stock was up just 6% on the week. Still, at $8.32 and a market capitalization in the $2.8 billion range, the sector as a whole needs more than block trades and a slight beat from Aphria (TSX:APHA).
Aphria’s strong quarterly result sent the stock back to the $5.50 range but by the end of last week, the stock closed at $4.75. In Q1, the company reported an 849% increase in revenue Y/Y, to $126.1 million. The average retail price per gram fell just 1% to $7.56. Aphria forecast revenue of $650 million - $700 million.
CannTrust (TSX:CTST) assured its investors that it will regain compliance. Destroying illegal cannabis and removing it from inventory is one of the things the firm will do to get there. But investors are unlikely to trust the company again.
Cronos, which has billions from Altria (NYSE:MO), has a strong balance sheet and plenty of options. Yet Canopy’s (TSX:WEED) management change, forced by Constellation Brands (NYSE:STZ), suggests that a cash injection does not guarantee success. Cronos still needs to carry out its growth strategy with minimal interference from Altria.
