{"id":40862,"date":"2020-01-26T06:00:00","date_gmt":"2020-01-26T14:00:00","guid":{"rendered":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/2020\/01\/26\/everyone-still-wants-in-on-cannabis-stocks\/"},"modified":"2020-01-26T12:46:32","modified_gmt":"2020-01-26T20:46:32","slug":"everyone-still-wants-in-on-cannabis-stocks","status":"publish","type":"post","link":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/2020\/01\/26\/everyone-still-wants-in-on-cannabis-stocks\/","title":{"rendered":"Everyone Still Wants In on Cannabis Stocks"},"content":{"rendered":"<\/p>\n

Once touted as the cannabis industry\u2019s first real-life unicorn \u2014 nothing like the first unicorn,\u00a0which turned out to be a colossal scam<\/a>\u00a0\u2014 nationwide dispensary chain MedMen appears to be in trouble.<\/p>\n

Rumors that the company was out of cash and unable to pay its vendors,\u00a0swirling online for most of the past week, seemed to be confirmed Thursday<\/a>\u00a0by MarketWatch, who reported that MedMen was offering to pay its suppliers in stock, an unorthodox arrangement \u2014 one that signals significant cash-flow problems \u2014 confirmed by company brass.<\/p>\n

And like shares in other publicly traded cannabis companies \u2014 who, like MedMen, prefer to be listed on unregulated \u201cpink sheet\u201d exchanges rather than exchanges where their financial statements are audited, like NASDAQ \u2014 MedMen stock isn\u2019t exactly a hot commodity. Peaking at $6.49 a share in mid-October 2018,\u00a0shares in the company were trading at just 47 cents at the end of business on Thursday.<\/a>\u00a0MedMen has had to cancel its planned buyout of PharmaCann LLC (an all-stock deal once valued at $682 million) and is apparently attempting to sell its New York City medical-cannabis dispensary at a list price of between $50 million and $100 million.<\/p>\n

MedMen\u2019s woes may stem from ludicrously generous executive compensation, a fact pointed out by industry observers for many years. Or many the chain, with 33 locations across the country including in New York City, just grew too fast.<\/p>\n

Whatever the analysis, MedMen is but one entry in an overall bear market for weed stocks, a famine period that\u2019s lasted much of the last year and shows no immediate signs of recovering. MedMen also trades on securities exchanges in Canada, where other valuations of companies that were briefly unicorns \u2014 chief among them Canopy Growth Corp. but also onetime blue-chip stocks like Cronos and Tilray \u2014 have also taken haircuts so close they\u2019re taking chunks of flesh.<\/p>\n

So what\u2019s the mainstream investor doing? Why, getting into weed stocks, of course!<\/p>\n

Capital raises are down 20% across the board, Viridian Capital Advisors, which tracks such data, told MarketWatch, a dip that began almost a year ago.<\/p>\n

That hasn\u2019t stopped Standard & Poors, the vaunted financial services company famous for bond ratings (and maybe even more famous for somehow \u201cmissing\u201d\u00a0the assets it rated as AAA during the subprime crisis were junk bonds<\/a>) from launching not one but two indices tracking the price of cannabis stocks. This \u201cdemonstrates a growing level of mainstream interest in the burgeoning industry\u201d despite its obvious and well-documented woes,\u00a0as Marijuana Business Daily wrote on Thursday<\/a>.<\/p>\n

One, the Standard & Poor\u2019s\/MX International Cannabis Index, launched on Nov. 18. Another, the S&P TSX Cannabis Index, started on Jan. 20. Not every stock is eligible \u2014 companies have to meet both a minimum capitalization as well as a daily value of trades to be on the first index, whereas it seems smaller companies can be listed on the second index without vetting \u2014 but the fact that S&P is even involved is a strong indication of public interest.<\/p>\n

Another reason why stocks have taken such a dive is that most publicly traded companies do their business in Canada. This will be the way things are until federal legalization, or until a viable American company decides to go public. At this rate, the former might happen first. As it is, at least one major analyst thinks the worst is yet to come.<\/p>\n

Christopher Carey, Bank of America\u2019s leading equity analyst on cannabis stocks,<\/a>\u00a0recently told Benzinga<\/a>\u00a0that a brief rally enjoyed by stocks earlier this year is almost certainly going to precede an even steeper crash. Analysts \u201cnow assume a roughly 25 percent lower market size for Canada\u2019s adult use market in 2020,\u201d he told the website, and with a shrinking market come shrinking sales estimates for Canadian companies \u2014 whose best shot at growth seems to be a robust export market.<\/p>\n

So things are in a bit of a rut at the moment, with no clear exit strategy. It won\u2019t take much to trigger a rally, stocks spiked just before the New Year, eerily timed with the launch of recreational sales in\u00a0Illinois<\/a>, a rhythm we\u2019ve seen before. So if you\u2019re an institutional investor with a very long view, this might be the right time to buy or at least buy a sizable chunk of a struggling company with a very uncertain future at a bargain rate. What could go wrong?<\/p>\n

Disclaimer: This writer holds still holds some stock in Canopy Growth Corp., but sold almost all of it to get through grad school.<\/em><\/p>\n

TELL US,<\/strong>\u00a0do you have cannabis stocks?<\/p>\n

The post Everyone Still Wants In on Cannabis Stocks<\/a> appeared first on Cannabis Now<\/a>.<\/p>\n


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Once touted as the cannabis industry\u2019s first real-life unicorn \u2014 nothing like the first unicorn,\u00a0which turned out to be a colossal scam\u00a0\u2014 nationwide dispensary chain MedMen appears to be in trouble. Rumors that the company was out of cash and unable to pay its vendors,\u00a0swirling online for most of theContinue Reading<\/a><\/span><\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[50,1228,461,170,2183,879,1088],"tags":[],"_links":{"self":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/40862"}],"collection":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/comments?post=40862"}],"version-history":[{"count":1,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/40862\/revisions"}],"predecessor-version":[{"id":40863,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/40862\/revisions\/40863"}],"wp:attachment":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/media?parent=40862"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/categories?post=40862"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/tags?post=40862"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}