The Pot Stock Rebirth (GWPH, NUGS, CURLF, GRWG)

The Pot Stock Rebirth (GWPH, NUGS, CURLF, GRWG)

Remember a few years ago, when cannabis stocks were all the rage? It’s been a brutal bear for the pot stock crowd for the past couple years, but the signs and signals are piling up that the space is once again catching fire.

To help size up the landscape and formulate a plan, we offer up the following survey of some of the most interesting and talked about names in the space: GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH), Cannabis Strategic Ventures (OTCMKTS:NUGS), Curaleaf Holdings Inc (OTCMKTS:CURLF), and GrowGeneration Corp (NASDAQ:GRWG).

GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH) recently reported Q1 results, with sales at $120.6 million, more than triple the numbers dropped in the year-ago quarter, blowing out analyst estimates (consensus $109.4 million). The big driver, as one may have expected, was Epidiolex, an FDA approved CBD treatment for refractory childhood epilepsies, as well as for the treatment of Dravet syndrome, Lennox-Gastaut syndrome, tuberous sclerosis complex, and infantile spasms.

Net product sales for the drug totaled $116.1 million in Q1, with $106.1 million of this amount generated in the U.S.

GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH) bills itself as a biopharmaceutical company that engages in discovering, developing, and commercializing cannabinoid prescription medicines using botanical extracts derived from the Cannabis plant.

The company operates through three segments: Commercial, Sativex Research and Development, and Pipeline Research and Development. Its lead product is Epidiolex, an FDA approved treatment of refractory childhood epilepsies, as well as for the treatment of Dravet syndrome, Lennox-Gastaut syndrome, tuberous sclerosis complex, and infantile spasms.

The company also develops and markets Sativex, an oromucosal spray for the treatment of spasticity due to multiple sclerosis. In addition, it develops various product candidates, which are in Phase I and II clinical development for the treatment of glioma, neonatal hypoxic-ischemic encephalopathy, adult epilepsy, and schizophrenia.

The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 4% in that timeframe. Shares of the stock have powered higher over the past month, rallying roughly 21% in that time on strong overall action.

GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH) generated sequential quarter-over-quarter growth rate of 22.3% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($536.9M against $117.6M).

Cannabis Strategic Ventures (OTCMKTS:NUGS) is nailing things right now, in terms of execution. Cometh the moment, cometh the company. That’s what seems to be the case. We are seeing dramatic sales growth, advances in product quality (as evidenced by increased pricing out the door), and expanding production capacity.

The stock is up nearly 100% since its March lows – when the whole market panicked into a major bottom and turned back higher. At this point, we are seeing bids show up around the 50-day MA, which is a positive sign.

Cannabis Strategic Ventures (OTCMKTS:NUGS) also recently announced that it is about to launch a full line of branded products. We like to see the increased pricing power. It shows strong execution from the ground up. And a robust relationship with key distribution partners. But a branded product line can push that aspect considerably further. The difference between a white label cannabis supplier and a branded products name with a popular brand is night and day.

And if the branded products name first learned how to be effective as a generic producer, a real edge is born.

That may well be where NUGS is right now: working with a macro tailwind and the good side of the execution narrative, but still ahead of the powerful news of a branded products launch.

Either way, the company’s most recent release suggests NUGS may be set to do more than twice the sales it was targeting for 2020 when it entered the year.

Curaleaf Holdings Inc (OTCMKTS:CURLF) just announced that retail locations in Massachusetts re-opened for adult-use purchases starting on May 25th, 2020.

“We are pleased that our three adult use dispensaries in Ware, Oxford and Provincetown are among the first of Commonwealth businesses allowed to re-open on May 25, and we appreciate the Governor and Lt. Governor’s decision,” said Patrik Jonsson, president of Curaleaf Massachusetts. “We’re very much looking forward to resuming serving our customers with the quality products they have come to rely on, and also getting our people back to work. We expect sales to be brisk as a result of pent up demand, and we are working closely with the Cannabis Control Commission and the Massachusetts Department of Health to comply with all guidelines surrounding our reopening.”

Curaleaf Holdings Inc (OTCMKTS:CURLF) promulgates itself as a company that operates as an integrated medical and wellness cannabis operator in the United States. Curaleaf Inc.’s Florida operations were the first in the cannabis industry to receive the Safe Quality Food certification under the Global Food Safety Initiative, setting a new standard of excellence.

And the stock has been acting well over recent days, up something like 2% in that time. Shares of the stock have powered higher over the past month, rallying roughly 20% in that time on strong overall action.

Curaleaf Holdings Inc (OTCMKTS:CURLF) generated sales of $129.8M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 30.3% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($251M against $177.1M).

GrowGeneration Corp (NASDAQ:GRWG) managed to rope in revenues totaling $33M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 152%, as compared to year-ago data in comparable terms.

If there’s any concerns here from a fundamental metric perspective, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($11.4M against $17.3M, respectively).

GrowGeneration Corp (OTCMKTS:GRWG) trumpets itself as a company that, through its subsidiaries, owns and operates retail hydroponic and organic gardening stores in the United States.

Currently, GrowGen has 27 stores, and carries and sells thousands of products, including organic nutrients and soils, advanced lighting technology and state of the art hydroponic equipment to be used indoors and outdoors by commercial and home growers.

According to company materials, “Our mission is to own and operate GrowGeneration branded stores in all the major states in the US and Canada. Management estimates that roughly 1,000 hydroponic stores are in operation in the US. By 2025 the market is estimated to reach over $30 billion with a compound annual growth.”

If you’re long this stock, then you’re liking how it has responded in recent days as well. GRWG shares have pushed about 27% to the upside on above average trading volume in the past week since releasing Q1 financials.

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Published at Wed, 10 Jun 2020 04:06:53 +0000

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