Category: CBD

Cannabis 2.0 Is Coming: Watch ACB Stock

In case you didn’t get the memo, what’s popularly known as “Cannabis 2.0” is coming to Canada on Oct. 17 as the nation finally legalizes cannabis-infused beverages, edibles, vapes, and similar products. Owners of Aurora Cannabis (NYSE:ACB) stock could potentially be sitting on a green-hued gold mine if the pot-stock sector explodes to the upside in the wake of this historic event.

ACB - Aurora Cannabis Inc. 1 month stock chart

Aurora has been granted a processing license from Health Canada (the nation’s regulatory agency) for a facility known as Aurora Air. This particular facility will produce edible products including chocolates and gummies, which are expected to go public in Canada as soon as December of this year.

I consider that to be a very forward-thinking move on Aurora’s part, as edibles don’t carry the stigma that vaping products do. The fact that Health Canada granted the Aurora Air license, moreover, is a sign that the nation’s regulators accept and embrace edibles as a publicly purveyed commodity; you can love ’em or hate ’em, but edibles are here to stay.

Canopy Growth: A Lot Of Pain To Digest

The management team at Canopy Growth revealed some really positive developments, but also some very painful ones incurred by the business.

In its latest quarter, the company posted a record harvest that indicates strong sales moving forward. However, pricing, declining cash balances, and continued negative cash flows are all concerns that investors need to keep in mind.

Pain just keeps building up for the players in the cannabis space. In its latest filing, for instance, the management team at Canopy Growth Corp. (CGC) revealed that, despite posting strong sales and volume growth in the first quarter of its 2020 fiscal year, it’s still unable to generate a profit.

Add to this continued declines in its cash on hand, poor recreational cannabis pricing, and the prospect of some industry oversupply issues, and investors are right to be concerned. Even though, in the long run, Canopy will likely dominate the space as one of the few major players in the market, in the short run it looks like shareholders could be in for a world of hurt if current trends continue.

 Management did say that during the quarter they happened to harvest 40,960kg of the plant, up 323% from the 9,685kg harvested one year earlier. The amount actually harvested during the quarter was well above the 34,000kg worth previously forecasted, and over 70% of what was produced fits the company’s definition of “high THC” strains. This should translate into far higher sales in the next quarter or two, meaning that this prior quarter may have been more of a bump in the road on Canopy’s road to growth.

CGC – Canopy Growth Corporation

Canopy Growth Q1 2020 Earnings Preview

Canopy Growth (OTC:CGC) is scheduled to announce Q1 earnings results on Wednesday, August 14th, after market close.

The consensus EPS Estimate is -$0.31 (+22.5% Y/Y) and the consensus Revenue Estimate is $84.62M (+226.7% Y/Y).

Over the last 1 year, cgc has beaten EPS estimates 0% of the time and has beaten revenue estimates 75% of the time.

Over the last 3 months, EPS estimates have seen 0 upward revisions and 3 downward. Revenue estimates have seen 1 upward revision and 5 downward.

ZYNE – Zynerba Pharmaceuticals, Inc.

Zynerba’s Zygel Can Beat Epidiolex

Zynerba jumped on news of a patent for cannabidiol-based treatment of autism spectrum disorder.

The product, Zygel, allows for absorption of CBD without contact with the digestive system, preserving CBD from decomposition into THC.

GW Pharmaceuticals’ Epidiolex does pass through the digestive system, which may be responsible for somnolence and liver abnormalities reported.

Still, the stock is highly dependent on sentiment across the wider cannabis space, which could turn south unpredictably.

Dilutive financings are in Zynerba’s future, and it will be years before it sees any significant revenues from Zygel.

Altria And British American: 2 High-Yield Blue Chips For A Rich Retirement

There is perhaps no more hated industry in market history than tobacco. But since 1926, no industry has delivered better total returns, and on a risk-adjusted basis, tobacco is #2.

Over the past 33 years, Altria and British American have delivered 18% and 14% CAGR total returns, respectively, “smoking” the S&P 500 while offering generous, recession-resistant and exponentially growing dividends.

Both companies have wide moat businesses, with proven track records of adapting to an endless stream of “existential” crises, which is why I recently bought both for my retirement portfolio.

From today’s valuations, 20% historically undervalued for MO and 25% for BTI, these defensive, high-yield blue chips can realistically deliver 12% to 20% CAGR and 19% to 25% CAGR total returns over the next five years, respectively.

Heineken Has Another Awesome Year

Heineken And Cannabis Go Well Together

Lagunitas, a subsidiary of Heineken, brought a new cannabis-infused beverage on the market.The product is selling well, and demand is increasing rapidly.The successful launch will not bring in a lot of money (yet).

On June 26, 2018, Lagunitas, a subsidiary of Heineken (OTCQX:HEINY), announced that it will launch an IPA-inspired sparkling water which contains hops and is infused with THC and/or CBD. Both of the ingredients

HEXO (HEXO) Dips

HEXO (HEXO) closed at $4.91 in the latest trading session, marking a -1.8% move from the prior day. This change lagged the S&P 500’s daily loss of 0.62%. Meanwhile, the Dow lost 0.25%, and the Nasdaq, a tech-heavy index, lost 0.74%.

Prior to today’s trading, shares of the cannabis producer had lost 14.24% over the past month. This has lagged the Medical sector’s loss of 1.47% and the S&P 500’s gain of 2.8% in that time.

Zynerba Pharmaceuticals, Inc. | NASDAQ

Zynerba New Patent “Treatment of Autism Spectrum Disorder with Cannabidiol”

Jun. 11, 2019 8:28 AM ET|About: Zynerba Pharmaceuticals, Inc. (ZYNE)|By: Mamta Mayani, SA News Editor

The USPTO has issued Zynerba Pharmaceuticals (NASDAQ:ZYNE), Patent No. 10,314,792, titled “Treatment of Autism Spectrum Disorder with Cannabidiol” which includes claims directed to methods of treating autism spectrum disorder by administering a therapeutically effective amount of synthetic cannabidiol.

The new patent will expire in 2038.

The issuance of this patent comes as enrollment progresses in Phase 2 BRIGHT study evaluating the safety, tolerability and efficacy of Zygel for the treatment of children and adolescents with Autism Spectrum Disorder.

Zynerba Pharmaceuticals

Enhancing connections in the central nervous system. 

Why Cannabinoids ?

Cannabinoids interact with specific receptors and pathways implicated in a range of diseases throughout the body to produce pharmacologic effects. These include potential inhibition and modulation of several pathways resulting in a cumulative anti-convulsive effect, and the modulation of the endocannabinoid system, which regulates emotional responses, behavioral reactivity to context, and social interaction. 

There are three types of cannabinoids: phytocannabinoids, or plant-derived and found in the Cannabis plant; endocannabinoids, or cannabinoids the body produces to control certain biochemical pathways; and synthetic cannabinoids, or those pharmaceutically manufactured to be structurally and functionally identical to phyto- and endocannabinoids. The two most researched cannabinoids are Δ9-tetrahydrocannabinol (THC) and cannabidiol (CBD).  Despite their similar chemical structures, CBD is a compound that doesn’t produce the euphoric effects or “high” associated with THC and Cannabis.

At Zynerba, we focus our current development efforts on CBD as it has demonstrated positive effects in the CNS and is non-euphoric and non-addictive.

ZygelTM (ZYN002 CBD Gel)

Zygel is the first and only pharmaceutically-produced CBD, a non-euphoric cannabinoid, formulated as a patent-protected permeation-enhanced gel for transdermal delivery through the skin and into the circulatory system. Zygel is being developed for patients suffering from FXS, ASD in pediatric patients, 22q, and a heterogeneous group of rare and ultra-rare epilepsies known as developmental and epileptic encephalopathies (DEE).

HEXO Corp

Potential Revenues Make It A Buy Opportunity

HEXO Corp. is a cannabis company with a very interesting exclusive agreement with the SQDC.

HEXO has a strategy that includes a wide range of cannabis-related products.

The merger with Newstrike Brands positions HEXO as an industry leader.

It is quite undervalued based on the fact that its revenues could reach more than $200 million in the next twelve months.

HEXO Corp. (TSE: HEXO, NYSE: HEXO) is a cannabis company that is growing revenues at a nice clip. The most distinguishable feature of this company is the exclusive distribution and supply agreements it has with Quebec, the largest agreement of the industry. Although HEXO currently serves only four provinces (pre-merger), it reaches 87 percent of the Canadian people.

Besides pure cannabis products, the company expects to develop cannabis-infused beverages, foods, and cosmetics in collaboration with larger companies, such as the partnership with Molson Coors Canada, named Truss Beverages. The Newstrike Brands’ merger will expose HEXO to four new provinces and expand production by 50%. With an enterprise value of $2.43 billion and 12-month-forward revenues in excess of $200 million, HEXO is a bit undervalued.

Conclusion

With a production capacity of 150,000 kg and facilities with more than 3 million sf, HEXO seems poised to generate significant revenues and grab a relevant market share in Canada and Europe. It is the preferred supplier and distributor in Quebec, which will secure it hundreds of millions in revenues in the years to come. It is also venturing in new areas like cannabis-infused beverages and foods. The company has closed a merger with Newstrike Brands that is accretive in many ways and seems approved by the market.

The management expects revenues to be more than $400 million in the fiscal years ending July 31, 2020, and according to my estimations, it could reach $200-$244 million in the 12 months from February 1, 2019 to January 31, 2020. With a forward EV/Revenues in the 10x-12x range, the stock seems quite undervalued. Remember it has been valued this way for a while although it has increased a bit and could not expand in valuation as you could expect.