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Cannabis stocks were generally higher on Friday, increasing with the broader market after a weaker-than-expected jobs report in May, bolstering expectations that the Federal Reserve will cut interest rates sooner provided that.
The Dow Jones Industrial Average
DJIA, + 1.16%
was up 290 points in trading at noon, after the economy created only 75,000 new jobs during the month, well below expectations for 185,000. This number fueled fears of a slowdown of the US economy as trade tensions between the US, China and Mexico persist.
"The cannabis sector seemed oversold after a recent sell-off," said Korey Bauer, portfolio manager of the Cannabis Growth mutual fund.
CANNX, -0.98%
recently launched by Foothill Capital Management. "Overall, risky assets are doing well, as the number of jobs and wage growth are a sign that the Fed may have to act soon."
On the regulatory side, efforts to protect banks that deal with cannabis companies from law enforcement measures by the federal government have progressed this week, he said.
A bipartisan bill on cannabis banks, the "Secure And Fair Enforcement (SAFE)" bank law, is approaching a ground vote once it has been placed in the schedule of the Union, as indicated by the Marijuana Moment advocacy site. Nearly half of the members of the House – 206 – have joined the SAFE Act as co-authors.
Read now: Pushing for legislation allowing banks to serve the cannabis industry is gaining ground
Also: Cannabis stocks fall after FDA hearing on CBD revealing diverging views on substance
"It's starting to gain ground, which is good, although I still think we're a bit out of the way. But that is clearly going in the right direction, "said Bauer.
Revenue from market leader Canopy Growth Corp. is the next big step for the industry.
CANNABIS, + 1.41%
GSC + 1.87%
for Thursday and that will set the tone for the sector. Canopy is the largest company in terms of market value, thanks to a $ 4 billion investment from Corona Constellation Brands Inc. beer distributor
STZ, + 2.57%
See also: A whole industry is built around the CBD, but we really do not know much about it.
According to analysts FactSet, the company should record a loss of 25 cents Canadian, a loss lower than 31 cents recorded last year. But revenues are expected to rise from $ 22.8 million to $ 90.9 million.
"Because it's the biggest, there will be a leader-type action, so a good result throws up all the boats," Bauer said. "Investors will look closely at prices and margins as each adjusts its numbers according to what large companies do."
The share of the canopy was up 2%.
Cannabis Watch: Learn more about MarketWatch coverage for cannabis companies
Shares of Neptune Wellness Solutions Inc.
NEPT, + 22.67%
rose 17% after the company announced an agreement with Tilray Inc. to provide extraction and purification services. Under the terms of the three-year agreement, Neptune will receive a minimum volume of 125,000 kilograms of biomass of cannabis and hemp to process, with the first year accounting for one-fifth of total volumes. The first shipment should be received in September 2019.
Tilray shares
TLRY, + 7.64%
increased by 4.2% on the news.
Pax Labs Inc. announced a series of agreements with cannabis companies on Fridayobtain cannabis extracts that will be used in pods designed for use with the Pax's Era device and platform. The company will launch Pax capsules for adult consumers and drug patients as soon as Canada allows the sale of derivatives later this year.
Pax has already sold more than 500,000 Era devices for oil concentrates in legalized US states.
Pax works in partnership with Aphria Inc., Aurora Cannabis Inc., Organigram Holdings Inc. and Supreme Cannabis Co. Inc.
"We think that the vapes will be a major form factor in Canada and these companies are teaming up with one of the leading vaporizers," Bauer said.
Aphria shares
APHA + 4.61%
APHA + 4.97%
rose 6.9%, Aurora
CBA + 1.39%
CBA + 0.89%
was up 2.7%, Organigram
OGI + 1.99%
added 3.3% and Supreme Cannabis
FIRE, + 5.49%
was up 4.9%.
Elsewhere, Valens GroWorks Corp.
VGWCF, + 9.63%
was up 7.7%, Aleafia Health Inc.
ALEF, -0.38%
LEAF, -0.30%
was down 0.4%.
Green Growth Brands Inc.
GGBXF, + 0.36%
was up 1%. Green Organic Dutchman Holdings Inc.
tgod, + 1.12%
tgod, + 1.12%
was up 1.1%.
Lily: How to live near a marijuana dispensary affects the price of your home
Horizons Marijuana Life Sciences ETF
HMMJ, + 1.77%
up 1.9%, and ETFMG Alternative Harvest ETF
MJ + 2.09%
was up 2.2%.
The S & P 500
SPX, + 1.18%
was up 1.1%.
See now: The reason # 1 for which adults are interested in legalized cannabis (do not go up)
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