The cannabis sector gained one if its biggest votes of confidence to date when top Wall Street firm Bank of America -Merrill Lynch initiated coverage on four of the top cannabis stocks with mostly positive outlook for sector. BofA is the latest of the Wall Street firms to add cannabis to their coverage, following the likes of Cowen, Jefferies and Piper Jaffray.
Cannabis stocks, for the most part, have started the year off on a strong foot with the Horizons’ Marijuana Life Sciences ETF (HMMJ) (HMLSF), the largest and most representative cannabis exchange traded fund, up about 45%. As the cannabis sector continues to break new boundaries, investors seeking opportunities in the budding sector may benefit from keeping tabs on several cannabis stocks.
Leafbuyer Technologies, Inc. (LBUY), a leading cannabis technology and marketing platform that connects consumers to dispensaries and product companies, announced the establishment of the company’s first satellite office in Los Angeles, California. The new office is in addition to its original Denver Colorado headquarters and will become the primary regional office for several western states. This move will help Leafbuyer expand its national footprint by enabling sales initiatives to focus on newly legal Midwestern and Eastern states.
“California is now a mature recreational and medical cannabis market, which makes this the opportune time to establish a secondary operation in the southern part of this industry-leading state,” said Kurt Rossner, CEO.
Leafbuyer recently announced that its quarterly cash sales growth rose 36% year over year in the quarter ending March 31, 2019. The cannabis stock attributes this success to platform enhancements, order ahead and Leafbuyer loyalty as well as a multi-state sales team. The platform allows consumers to order cannabis products ahead, earn loyalty points, and cut the line to pick up and pay at numerous participating dispensaries Leafbuyer plans to continue to expand its reach into newly legal US markets, while increasing consumer retention to boost bottom line revenues.
Canopy Growth Corporation (CGC) (WEED), a world-leading diversified cannabis and hemp company, is rumored to be preparing to purchase Acreage Holdings Inc, a U.S. cannabis company, by buying the right to purchase, according to Bloomberg and CNBC. If Canopy Growth was to acquire the US-based cannabis company now, it would be delisted from the TSE since cannabis is illegal in the U.S., and the exchange does not allow companies to own stakes in businesses that run illegal operations. Instead, Canopy Growth will purchase the rights to buy Acreage if or when cannabis becomes legal in the U.S. at an agreed-upon price, according to the source.
Bank of America (BAC) initiated new coverage Canopy Growth giving it a buy rating with a price target of $52. On Tuesday, Co-CEO Bruce Linton updated the company’s revenue guidance at a cannabis conference in Toronto in which Canopy is anticipating at least $744 million in revenue in fiscal 2020, beating analyst estimates by 19 percent. The company also announced the completion of an all-cash acquisition of Spain-based licensed cannabis producer Cáñamo y Fibras Naturales, S.L. (Cafina). The acquisition paves the way for Canopy to expand its European production footprint.
“Operating multiple production assets within Europe will allow us to increase revenue in the EU free of supply constraints,” commented Mark Zekulin, President & Co-CEO. “This strategic acquisition in a scalable, low-cost production environment diversifies our owned production capabilities in Europe, similar to our approach in Canada where we have production facilities in seven different provinces. Adding Cafina will allow us to quickly build out our presence in Spain using its existing cultivation licence as a launch pad, while ensuring our Canadian footprint – the largest in the world – can continue to serve the medical and recreational needs of Canadians.”
HEXO Corp (HEXO), consumer packaged goods cannabis company, had Bank of America (BAC) initiated coverage on the stock giving it a buy rating and the title of its top cannabis stock pick. Most recently, the company announced reaching a significant milestone of completing the first harvest in its 1 million sq. ft. expansion.
“Completing the first harvest in our 1,000,000 sq. ft. greenhouse expansion showcases the dedication and hard work of the entire HEXO team,” said Sébastien St-Louis, CEO and co-founder. “We are very proud of our continued ability to execute on our plans, creating value for our shareholders and demonstrating our commitment to our customers. This cultivation milestone means that an expanded HEXO product offering will be available to more Canadians shortly.”
In mid-March, HEXO announced a definitive arrangement agreement to acquire Newstrike Brands Ltd. (NWKRF) in a stock deal valued C$263 million ($196.7 million). This acquisition which will boost HEXO’s production capacity to 150,000 kg annually while increasing its domestic market access to 9 provinces.
Aurora Cannabis Inc. (ACB), a world leading cannabis company, also had Bank of America (BAC) initiate coverage on it stock giving it a buy rating and price target of $11. The company announced that, further to its April 5th press release, the public appeal process related to the German cannabis production tender has been completed, and Aurora’s contract with the German Federal Institute for Drugs and Medical Devices has been finalized allowing Aurora to begin construction on a new indoor cannabis production facility in May.
“We are thrilled with the positive outcome of the tender process, and excited to start construction on our latest production facility,” said Neil Belot, Chief Global Business Development Officer. “We are very proud of the work done by our European team. In addition to providing German medical patients with a local supply of high-quality, medical grade cannabis, this new facility will also bring additional new jobs to the German labour market. It’s a strong validation of our production and distribution standards to have been recognized as having the highest-rated overall concept out of 79 tender applications, and we look forward to continuing to increase availability of medical cannabis in this important market.”
Also this week, Aurora announced entering a binding letter agreement with Hempco Food and Fiber Inc. (HEMP), a provider of hemp-based foods, fiber and nutraceuticals. Per the agreement, Aurora will acquire all of the issued and outstanding common shares not already owned of Hempco and pay $1.04 per share in common shares of Aurora, for a valuation of C$63.4 million.
This blog is an affiliate of Midam Ventures, LLC. Pursuant to an agreement between an affiliate of MAPH Enterprises, LLC (owners of MarijuanaStocks.com), Midam Ventures LLC and Leafbuyer Technologies Inc., Midam is being paid $50,000 for a period of 30 days beginning November 1, 2018, and ending November 30, 2018. Midam has been paid an additional $50,000 and 40,000 common restricted shares of Leafbuyer Technologies, Inc. extending the contract another 30 days ending December 31, 2018. Midam has been compensated an additional $50,000 by Leafbuyer Technologies and has extended its period of coverage to January 31, 2019. Midam has been compensated an additional $50,000 by Leafbuyer Technologies and has extended its period of coverage to March 1, 2019. Midam has been compensated an additional $50,000 by Leafbuyer Technologies and has extended its period of coverage to April 1, 2019. Midam has been compensated an additional $100,000 by Leafbuyer Technologies for a period of coverage from April 12, 2019 to June 12, 2019. Midam owned 77,000 shares of Leafbuyer Technologies. Midammay buy or sell additional shares of (LBUY) in the open market at any time (as of 3/29/2019) Midam Ventures no longer owns 77,000 shares of (LBUY), including before, during or after the Website and Information, to provide public dissemination of favorable Information about Leafbuyer Technologies Inc. Click here for full Midam disclaimer.