Cannabis stocks recovered some territory on Tuesday in the wake of one of Wall Street’s worst Mondays in a while.
The North American Marijuana Index, which tracks the top cannabis stocks in the US and Canada, ticked up 2% to 114 points. Elsewhere, the Horizons Marijuana Life Sciences Index ETF rose 3% to C$9.07, while the OTCQX Cannabis index climbed 2.6% to 463.5 points.
Buds
Corp () (OTCMKTS:PEMTF) shares traded higher after the company signed a licensing and royalty agreement with Phenome One Corporation, a private genetic and seed preservation company with over 350 cultivars and access to around 1,700 unique genetics in its seed bank.
Under the terms of the deal, Mota has the right to propagate, cultivate, harvest and process at least 10 selected cultivars from Phenome’s genetic library — the largest such library in Canada — and to sell anything it produces from the selections.
Its shares were trading at C$0.52 in Canada and US$0.40 over the counter on Tuesday morning.
(NYSE:CGC) got a boost from analysts at BMO Capital Markets. Tany Chen upgraded the firm’s rating of Canopy to Outperform from Market Perform, according to a report from Barron’s.
Chen also raised the company’s price target to C$40 from C$25.
“We believe the stock at current levels offers a better relative return profile considering that a number of other LPs with value-priced brands will likely continue to be at risk of requiring additional financings,” Chen wrote.
Canopy shares gained 6.4% to C$30.20 on Bay Street and 6.2% to US$22.89 on Wall Street.
Duds
On the other side of the coin, Hexo Corp () (TSE:HEXO) lost ground following a downgrade from MKM Partners.
The firm bumped Hexo down to Neutral from Buy after it was sued for breach of contract by MediPharm Labs Corp (TSE:LABS) (OTCMKTS:MEDIF), according to a MarketWatch report.
MediPharm says the pot producer failed to pay for millions of dollars’ worth of cannabis oil over a supply deal signed last year.
"The hairy just got hairier," analyst Bill Kirk wrote. “... [this lawsuit is] the straw that has broken our back."
MediPharm is suing Hexo for C$9.8 million related to unpaid shipments of marijuana, the MarketWatch report said.
Hexo stock dropped 1.5% to C$1.73 in Toronto and 1.5% to US$1.31 in New York.
MediPharm, however, jumped 7.6% in the morning in Canada and 7.1% over the counter.
Contact Andrew Kessel at [email protected]
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