Buds & Duds: CannTrust shares perk up amidst scandal but broker Mackie terminates coverage

Monday was a fresh start for cannabis stocks, which saw slight gains across North American on the back of a challenging few weeks.

The North American Marijuana Index, which tracks the top cannabis stocks in the US and Canada, was up 1.2% to 219.1 points on Monday. The Horizons Marijuana Life Sciences Index ETF was up 2% to C$16.92. The OTCQX Cannabis Index inched up 1% at 683.4 points.

Buds 

CannTrust Holdings Inc (TSE:TRST) (OTCMKTS:CNTTF) shares were on the rise Monday, after a tumultous week that saw double-digit losses after the company was dinged by Health Canada for growing cannabis in grow rooms that didn’t have a licence to operate at its Pelham, Ontario facility.

Shares were up 15.6% at C$3.86 in Toronto, up 14.7% at US$2.96 in New York on Friday. 

Last week, the firm put a voluntary hold on the sale and shipment of all cannabis products as a precaution while Health Canada visits and reviews its Vaughan, Ontario manufacturing facility.

In a rare move, Mackie Research terminated coverage of CannTrust. In a report titled “Can’t Trust Management,” the fim said it had already lowered CannTrust to a Market Perform rating on April 2, 2019. 

“However, given the uncertainty surrounding the company’s Health Canada Audit we have lost faith in management and as a result we are terminating research coverage,” wrote analyst Greg McLeish. 

READ: Harvest One subsidiary inks supply agreement with Stevens Green

Other gainers Monday included Harvest One Cannabis Inc (CVE:HVT) (OTCMKTS:HRVOF) subsidiary United Greeneries Ltd has entered a supply agreement in which 9869247 Canada Limited will cultivate and harvest its cannabis genetics.

The company, known as Stevens Green, will grow at least 2,000 kilograms of United Greeneries cannabis at its facility in Ontario for an initial term of three years.

Shares of Harvest One jumped, up 7.3% at C$0.59 in Toronto, up 2.2% at US$0.45 in New York. 

Other stocks on the rise included Canopy Growth Corporation (TSE:WEED) (NYSE:CGC), which was up 3.4% at C$46.08 in Toronto, up 3.2% at US$35.32. 

It’s been more than a week since Bruce Linton, former co-CEO, told media he was fired from the Canadian cannabis company he founded in 2013.

READ: Ex-Canopy Growth co-CEO Bruce Linton reflects on his termination and where he’s now focusing his efforts

Other gainers Monday were Cannabis One Holdings Inc (CSE:CBIS) (OTCMKTS:CAAOF) after it announced last week that through its wholly owned subsidiary, it has executed a share purchase agreement to acquire all the securities of Green Lady IP Inc. 

Shares were up 3.4% at US$0.52 in New York.

READ: Cannabis One Holdings to acquire Green Lady IP to enlarge Pacific Northwest footprint

Duds

Laggards Monday included Isodiol International (CSE:ISOL) (OTCMKTS:ISOLF), which was down 12% at US$0.57 in New York on no news. The firm produces hemp derivatives in bulk quantities, white label formulas, and a branded line of finished goods.

Other stocks lagging Monday included Terra Tech Corp (OTCMKTS:TRTC), with shares down 2.9% at US$0.59 in New York. The firm recently announced it was poisted to open a CBD only retail location called Blüm CBD in downtown Las Vegas at its retail location on 121 North 4th Street.

Contact Katie Lewis at [email protected]

Story by ProactiveInvestors