TGOD, CannTrust Holdings Inc Rebound After Recent Losses

Green Organic Dutchman Holdings Ltd (TSE:TGOD) (MKTS:TGODF) (FRA: O1GA) and CannTrust Holdings Inc (TSE:TRST) (OTCMKTS: CNTTF) (FRA:C9S) were the eminent Tier-1 cannabis sector winners in today’s session. Trading activity was quiet, as a combination of pre-summer doldrums and a lack of catalysts subdued market activity.

There were some notable movers however—both of the rebound variety.

CannTrust Holdings was bid rather aggressively at the open on garden-variety technical buying. The stock started the session near its recent trading channel bottom, lifting rapidly from the opening bell. After declining ↓26.28%—peak-to-trough—over the past month, the path least resistance was up.

CannTrust rebounded $0.23 to $8.06/share (↑2.94%) on about average volume since the lead-up to the Aurora-MedReleaf merger announcement on May 14. The stock did pare gains into the afternoon, so for now, the stock seems content to oscillate within the downward-sloping trading channel.

The Green Organic Dutchman price action mimicked a similar dynamic. The stock broke out recently, running ↑101.95%, trough-to-peak, within a seven-day span between May 29-June 6. Originally, it was assumed technical buying was the cause, but TGOD later issued a press release stating, “The company is in advanced negotiations with multiple international companies”.

With news on the “negotiations” front subsiding in the days since the disclosure, investors have elected to book profits. That wave of selling sent TGOD shares down about ↓28.86% over the past five sessions. Much like CannTrust, investors decided ‘enough is enough’ this morning and aggressively bought shares at the lower channel boundary. Thus, today’s move looks to be mostly technically-driven in nature.

As the session advanced, buyers stepped away from the bid. TGOD lost about half its early gains, finishing up $0.31 to $6.42 (↑5.07%).

Miscellaneous Sector News

Canopy Growth Corp. pre-announced unaudited revenue guidance of between $22.5-23 million for the quarter ended March 31, 2018, compared to approximately $14.7 million for the same period last year. That works out to a ↑54.76% increase in revenues YoY, despite the fact legalization hasn’t yet materialized.

Also noteworthy was Canopy’s decision not to provide preliminary results in the future. Such proclamations have become more commonplace in recent years, as corporations attempt to temper expectations heading into earnings season. There’s simply little upside to providing public guidance and subjecting itself to the calamity missed numbers can bring. Analysts close to the company will possess well-telegraphed internal projections regardless.

The Hydropothecary Corp. announced the first two zones of its 250,000 sq. ft. greenhouse expansion has obtained licensing from Health Canada. The company has 6000 plants rooted and ready to be transferred into this newly licensed facility, with more on the way. Once the full expansion is complete, Hydropothecary will possess production capacity up to 1.3 million sq. ft., capable of producing 108,000 kgs of dried cannabis annually.

The stock finished flat today, up $0.04 to $5.02/share.

Midas Letter takes an in-depth look at Hydropothecary’s  state-of-the-art grow facility in Gatineau, Quebec

Green Thumb Industries Inc. has a solid post-IPO session today (CSE). Flying in somewhat under the radar, the national cannabis cultivator, processor and dispensary operator closed higher by $0.70 to $9.65/share (↑7.82%) on volume that uncommonly exceeded yesterday’s IPO listing total.

Without knowing the company in-depth, my big takeaway is the limited of number of shares issued.

According to the Management Information Circular filed May 17, Green Thumb only had 30,739,548 Common Shares issued and outstanding, with the public float holding considerably less (11,245,439 s/o, according to TMXMoney). This type of tight share structure could lead to outsized moves in either direction, should the cannabis sector experience above average volatility. So far however, the transition to the Canadian Securities Exchange has been a seamless one.

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Original article: TGOD, CannTrust Holdings Inc Rebound After Recent Losses

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