Leading cannabis analyst Vivien Azer of Cowen said during the latest earnings season companies in the sector tempered discussions around US legalization.
A cannabis analyst for Cowen highlighted that companies in the sector are adjusting their messaging and expectations around federal reform in the US marketplace.
Meanwhile, Aurora Cannabis (NASDAQ:ACB,TSX:ACB) had a difficult trading week after a new investment deal.
Keep reading to find out more cannabis highlights from the past five days.
Cowen analyst points to changes in US legalization talk
In an interview with Yahoo Finance Live, Vivien Azer, Cowen's managing director and senior research analyst covering the cannabis sector, said the messaging from US cannabis executives has changed around when regulatory changes could be on the way.
“The messaging out of 1Q '22 earnings season, I think, appropriately tempered some of the enthusiasm that some of the CEOs had been expressing around the potential for regulatory change,” she said.
Azer said the fundamentals of the cannabis industry continue to be “sluggish.” But she also admitted that the lack of regulatory change in the US is hurting the appeal of cannabis stocks.
When asked where the smart money is heading, Azer affirmed that US opportunities are the clear favorites at the moment given the “much larger addressable market.”
Stock market woes follow Aurora's share sale
The company has face criticism for the US$2.45 per unit price, which is effectively a 10 percent discount compared to the last trading level for Aurora shares. Each unit contains a common share of Aurora, as well as one common share purchase warrant, which the Globe and Mail said "made the discount even more extreme."
According to the news outlet, hedge funds likely “saw value in the accompanying warrant,” leading to the rapid interest in the offering at first since the deal was upsized.
However, Aurora saw less favorable returns in the open market as the company hit a week low of C$1.94 in Toronto. The company had declined in value by over 11 percent as of the opening bell on Friday (June 3).
Also on Friday, the cannabis producer repurchased US$20 million worth of convertible senior notes.
Cannabis company news
- Fire & Flower Holdings (TSX:FAF,OTCQX:FFLWF)appointed Stéphane Trudel, an executive from partner Alimentation Couche-Tard (TSX:ADT), as the new CEO of the cannabis retailer. “Having worked closely with Stéphane over the past three years, I believe he is absolutely the right person to lead the company into this next exciting phase of its growth," departing CEO Trevor Fencott said.
- Ikänik Farms (CSE:IKNK.U)has undergone a name and stock ticker change in connection to a business and executive transition. Its new name and ticker, Pideka Group (CSE:PDKA), relate to its intentions to become a Colombia-focused medical cannabis producer.
- Akerna (NASDAQ:KERN)notified shareholders of layoffs in order to cut costs and focus on its small- and medium-sized business division. Akerna CEO Jessica Billingsley said the executive leadership team has also taken a 25 percent pay cut to aid the company’s finances.
- The Flowr Corporation (TSXV:FLWR,OTC Pink:FLWPF)confirmed its shares have been reinstated after the TSX Venture Exchange suspended the company due to a failure-to-file cease trade order issued in May. The firm shared its financial report with the market, reporting a year-on-year net loss reduction from C$6.1 million to C$2.2 million.
Don't forget to follow us @INN_Cannabis for real-time updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
- Is There a Buying Opportunity in Cannabis Stocks? ›
- Ways to Invest in Cannabis | INN ›
- Cannabis Analysts: Institutional Investors Still on the Sidelines | INN ›
- 3 Cannabis Investing Experts Explain US Legalization Hype | INN ›