Marijuana Index Tumbles Despite Solid Results from Marijuana Industry

    Author Siraj SarwarPosted on Categories CannabisTags , , , , , , , , , , , , , , , , , , , , , , , , ,
    Marijuana Index

    The Marijuana Index has been struggling to gain momentum over the last couple of days despite increasing activities and robust financial and operational performance from one of the largest cannabis companies. The adult use cannabis legalization across Canada didn’t offer support to the stock price performance of many marijuana companies.

    Source: seekingalpha.com

    The Marijuana Index has reported losses in the past five straight sessions. The index currently stands at around 244 points, the lowest level since May 8th. Traders are blaming lofty valuations for the bear-run in the Marijuana Index.

    Even still, the entire industry is showing solid growth prospects due to growing demand from all over the world. The majority of marijuana companies are actively working on expanding their production potential and market share; these companies are making acquisitions as well as investing in their facilities to capitalize on demand.

    Canopy Growth Reports First Quarter Results

    Canopy Growth (TSX:WEED), which is a major player in the marijuana industry, reported a sales growth of 95% in fiscal 2018. Besides revenue growth, the company has expanded its footprints in Canadian, African, European and Australian markets.

    Source: marijuanaindex.com

    Canopy Growth, for instance, secured multi-year supply agreements in Canadian recreational markets – with the commitment to supply totaling 25,000 kg per year. The company also received online cannabis retail licenses in Newfoundland & Labrador, Manitoba, and Saskatchewan.

    Bruce Linton, Chairman & Chief Executive Officer stated: “Canopy Growth is uniquely positioned to go beyond our current commitments to provincial agencies and cannabis retailers to successfully open the regulated recreational cannabis market in Canada as a producer of choice nationwide.”

    However, the report also indicated a net loss to shareholders of $61.5 million.

    Other Marijuana Companies Are Making Similar Moves

    Aurora Cannabis Inc. (TSX:ACB), Maricann Group Inc. (CSE:MARI), and CannaRoyalty Corp (CSE:CRZ) have also been expanding their market share in both the medical and recreational markets. Aurora Cannabis recently received a new $200 million debt facility with Bank of Montreal (NYSE:BMO).

    Cannabis legalization in several countries, including Canada, is making it somewhat easier for marijuana companies to get financing for their expansion plans.

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    Author Siraj Sarwar
    About the author: Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.