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Hemp and Cannabis Stocks Gear Up for Election Day (APHA, TLRY, RLBD, ACB)

The green wave election year theme is back on the radar, with election day just a week away.

Naturally, the hype is already underway, and the cannabis, hemp, and CBD space has begun to react. But coming days and weeks could represent an interesting opportunity for stocks in the space given that the structural theme of legalization will be front and center.

In addition, polling numbers slant heavily in Biden’s favor and the Biden-Sanders “unity task force” put together a lengthy document of policy recommendations a couple months ago across a wide array of issues that is highly instructive on the pot stock election hype factor.

For example, among the issues that the task force considered was recreational cannabis legalization, calling for the decriminalization of marijuana using executive action. The task force also expressed support for the federal legalization of medical marijuana.

With that in mind, here’s a selection of some of the most active names in the space, including: Aphria Inc (NASDAQ:APHA), Tilray Inc (NASDAQ:TLRY), Real Brands Inc (OTCMKTS:RLBD), and Aurora Cannabis Inc (NYSE:ACB).

 

Aphria Inc (NASDAQ:APHA) is a leading global cannabis company driven by “an unrelenting commitment to our people, product quality and innovation.”

The company touts itself as one of Canada’s lowest cost producers, produces, supplies and sells medical cannabis. The company is truly powered by sunlight, allowing for the most natural growing conditions available. “We are committed to providing pharma-grade medical cannabis, superior patient care while balancing patient economics and returns to shareholders. We are the first public licensed producer to report positive cash flow from operations and the first to report positive earnings in consecutive quarters.”

Aphria Inc (NASDAQ:APHA) recently announced it has completed its first certified European Union Good Manufacturing Practices shipment of dried flower from its Aphria One EU GMP facility to its wholly-owned German subsidiary, CC Pharma GmbH, a leading distributor of pharmaceutical products to more than 13,000 pharmacies in Germany.

“Our first EU GMP shipment into Germany represents another significant milestone for Aphria Inc., one that strengthens our position as a leading cannabis company in Germany and in the European Union,” said Irwin D. Simon, Chief Executive Officer, Aphria Inc. “We are leveraging our strong medical platform and multi-faceted German strategy, which combines domestic cultivation, import licenses and large distribution infrastructure, to increase access to high-quality medical cannabis for patients worldwide. We remain excited about future milestones, including the completion of our cultivation facility in Neumünster, Germany, which we expect will be completed in Q2 FY2021.”

Even with that news, the action hasn’t really heated up in the stock, with shares moving net sideways over the past week. Shares of the stock have powered higher over the past month, rallying roughly 8% in that time on strong overall action.

Aphria Inc (NASDAQ:APHA) pulled in sales of $144.7M in its last reported quarterly financials, representing top line growth of 14.7%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($400M against $166M).

 

Tilray Inc (NASDAQ:TLRY) engages in the research, cultivation, processing, and distribution of medical cannabis. The company offers its products in Argentina, Australia, Canada, Chile, Croatia, Cyprus, the Czech Republic, Germany, New Zealand, and South Africa. Tilray, Inc. was incorporated in 2018 and is headquartered in Nanaimo, Canada.

One of its key subsidiaries is High Park, which was launched to produce and distribute world-class cannabis brands and products for the Canadian market. Based in Toronto and led by a team with deep experience in cannabis and global consumer brands, High Park has secured the exclusive rights to produce and distribute a broad-based portfolio of cannabis brands and products in Canada, subject to applicable laws and regulations.

Tilray Inc (NASDAQ:TLRY) recently announced that Australian researchers have published preliminary results finding that one of the company’s GMP-produced products is showing promise reducing nausea and vomiting for cancer patients undergoing chemotherapy in a world’s first clinical trial.

Results published in Annals of Oncology found a significant improvement in the control of chemotherapy-induced nausea and vomiting. A quarter of the patients taking medicinal cannabis experienced no vomiting and nausea, compared to 14 percent of people who took a placebo. The pilot phase of the study ran for two-and-a-half years with 81 participants enrolled. To be included in the study, patients had to have already experienced nausea and vomiting during chemotherapy despite having taken nausea prevention medication.

In total, over the past five days, shares of the stock have dropped by roughly -11% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities.

Tilray Inc (NASDAQ:TLRY) managed to rope in revenues totaling $50.4M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 9.8%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($137.2M against $163.7M, respectively).

 

Real Brands Inc (OTCMKTS:RLBD) frames itself as the result of a 2020 merger with Canadian American Standard Hemp Inc., which brought together industrial scale hemp CBD oil/isolate extraction and processing, CBD oil and isolate wholesaling, and the production and sale of numerous hemp-derived smokable, edible, and topical CBD consumer products.

The company’s “Halo 5” line represents a proprietary chromatography extraction technology utilizing a Simulated Moving Bed (SMB), providing mass production and precise pharmaceutical-grade molecular separation at dramatically reduced costs.

Real Brands Inc (OTCMKTS:RLBD) has completed a reverse merger to acquire Canadian American Standard Hemp Inc., (CASH) effective immediately. Real Brands’ name and trading symbol will be maintained, with CASH shareholders acquiring majority control of Real Brands. CASH will continue to operate as a wholly-owned subsidiary of Real Brands. Thomas Kidrin, CEO of CASH, has been named Chief Executive Officer (CEO) of Real Brands, replacing former Real Brands CEO Jerry Pearring.

“This strategic merger with Real Brands is designed to drive increased shareholder value and provide the public with an opportunity to participate in the growing global hemp-derived CBD market,” stated Thom Kidrin, new CEO of Real Brands. “With access to the capital markets now, we anticipate it will be easier and faster to fund our next phases of expected growth.”

The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 11% in that timeframe.

Real Brands Inc (OTCMKTS:RLBD) appears to be moving toward widespread commercial scale operations, particularly given its recent strategic activity and the company’s vision and stated plans going forward. That puts RLBD squarely on track for some interesting potential ahead. Given its cheap share pricing, this more speculative name could represent an interesting opportunity.

 

Aurora Cannabis Inc (NYSE:ACB) is one of the most widely diversified players in the cannabis space due to its powerful strategic investments. In addition, the company has demonstrated rapid organic growth and strong execution on strategic M&A, which to date includes at least 15 companies.

However, just drilling down into its core cannabis production operations, Aurora Cannabis Enterprises Inc, trumpets itself as “one of the world’s largest and leading cannabis companies” and a licensed producer of medical cannabis pursuant to ACMPR.

Aurora Cannabis Inc (NYSE:ACB) most recently announced it has completed the previously filed At-The-Market program. Because of this, the Company has filed a new preliminary short form base shelf prospectus with securities regulators in each of the provinces of Canada, except Quebec, and a corresponding shelf registration statement on Form F–10 with the United States Securities and Exchange Commission.

According to the release, the base shelf prospectus, when made final, will allow the Company to make offerings of up to U.S.$500 million of common shares, preferred shares, warrants, subscription receipts and debt securities, or any combination thereof during the 25-month period that the base shelf prospectus remains effective.

While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action ACB shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -12% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -15%.

Aurora Cannabis Inc (NYSE:ACB) pulled in sales of $72.1M in its last reported quarterly financials, representing top line growth of -27.1%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($169.2M against $272.8M, respectively).

 

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