The shares of GrowGeneration Corp. gathered on Wednesday to mark a rare splash of green in a cannabis-losing sector that is still under pressure from revelations of illegal activity at CannTrust Holdings Inc.
The shares of GrowGeneration, which owns and operates hydroponic and organic gardening specialty stores for the cannabis industry, jumped 8% after the company announced that it had named the former General Manager of The Home Depot. Bob Nardelli, Strategic Advisor. The executive, who led the chain of home improvement stores from 2000 to 2007, will be responsible for helping the company find partnerships and refine its merchandising, branding and new product launches.
"I think GrowGeneration
GRWG, + 8.65%
has a strong track record of execution, is highly differentiated from peers, has reached a scale throughout the supply chain of the hydroponics industry and is ready to move to the next level " Nardelli said in a statement.
have dropped an additional 10% to reduce their losses to 34% since the beginning of the week, after the Canadian regulator seized his cannabis after discovering that he was pushing into rooms without a license from his Pelham Institution. On Tuesday, CannTrust's Danish partner, Stenocare A / S, added that he had sold some of the illegal pot to his patients, meaning he had been exported from Canada.
The Canadian Cannabis Act prohibits the export of cannabis without a license and states that whoever does so is guilty of an indictable offense and liable to imprisonment or a fine. Health Canada did not immediately respond to a request for comment.
See: Cannabis stocks reduced by CannTrust losses after cannabis seizure
In an e-mail statement, a CannTrust spokesperson said, "CannTrust has confirmed that all batches of products received by Stenocare except one have been grown in fully licensed rooms. Stenocare informed the Danish Medicines Agency that the only non-compliant lot had been put on hold pending the outcome of Health Canada's ongoing investigation. "
Cannabis Watch: To learn more about MarketWatch's coverage of cannabis producing companies, click here.
According to GMP analyst Ryan Macdonell, the news creates a stock surplus on equities, but it will not adjust forecasts until future Health Canada decisions are clear.
"In our opinion, the announcement and the resulting sale of TRST shares have likely severely shaken investor confidence. We expect CannTrust to take the necessary time to regain that trust and that stocks can trade at a discount to their peers for a while, "wrote Macdonell in a note.
Shares of MedMen Enterprises Inc.
fell 1.4%, after the medical cannabis clinic reported receiving an additional $ 30 million investment from Gotham Green Partners, with the participation of Wicklow Capital. This brings Gotham's total financial commitment to $ 280 million. Gotham has so far funded $ 100 million of the total commitment.
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"Gotham Green and Wicklow have both trusted our strategy and recognized the potential that lies ahead," said MedMen CEO Adam Bierman.
On the regulatory news, a congressional committee holds its first-ever hearing Wednesday on the lifting of the federal ban on cannabis. The hearing is expected to bring together a large number of constituents on the many issues related to cannabis reform, including the unfair burden communities of color have experienced during the war on drugs.
"The legalization has not resulted in a reduction in the number of arrests of blacks and Latino in these states," said Shadawn Reddick-Smith, director of communications of the Judiciary Committee of the House of Democrats, in comments sent by email. "In fact, many states have seen an even greater increase in the percentage of African-Americans and Latinos victims of a termination of their husbands on their lives."
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Shares of KushCo Holdings Inc.
0.8%, which allowed Canaccord's analysts to gain a positive rating, recalling a speculative purchase rating and a target price of $ 7.50, or 50% above the current negotiation of the action.
"We are confident that the continued improvement in gross margin and the imminent Nasdaq risk list will act as positive enablers for equities over the next few months," analyst Bobby Burleson wrote in a note. addressed to customers. "The company is leveraging its growing scale to get better prices from suppliers and conditions with customers. "
Elsewhere, Aurora Cannabis Inc. shares
CBA + 0.68%
CBA + 0.31%
were up 0.3%, Cronos Group Inc.
down 0.8%, Hexo Corp.
was down 0.6% and Tilray Inc.
TLRY, + 1.73%
was up 2.3%.
down 0.7%, Green Growth Brands Inc.
down 5.5% and Organigram Holdings Inc.
was down 4.2%.
The ETFMG Alternative Harvest ETF
down 0.4%, with 20 of its 38 constituent stocks down. Horizons Marijuana Life Sciences ETF
was down 0.1%, with 27 of its 54 constituent stocks falling. The new Cannabis ETF
launched Tuesday by Innovation Shares was down 0.5%.
The Dow Jones Industrial Average
DJIA, + 0.29%
was up 0.3% and the S & P 500
SPX, + 0.45%
was up 0.5%.