Beyond the Bong

Aphria Delivers Big on Earnings

Both Canadian and American pot stocks made big moves higher last week. This was the start of the turnaround we’ve been waiting for.

And looking ahead to next week, we see there’s likely even more in store.

But first, take a gander at the North American Marijuana Index’s performance. It eked out a small 0.25% gain for the week.

Investors probably didn’t see anything to be too excited about… But inside that meager number, there were some truly exceptional performances.

Chart - North American Marijuana Index

For instance, our top pot stock to watch last week was Aphria (NYSE: APHA).

For weeks, shares of Canadian licensed producers have been battered by scandals and mounting losses.

But we were looking for Aphria to possibly buck the trend when it reported fourth quarter earnings… and boy did it deliver!

Shares rocketed 37% higher on Friday as it crushed expectations. Revenue surged to CA$128.6 million, and the company actually produced a profit.

Investors cheered, and shorts were pummeled!

Just as important from my perspective, Aphria revealed that adult-use revenue jumped 158% from the previous quarter to CA$18.5 million.

The beat from Aphria helped elevate the entire Canadian segment. In turn, we saw big jumps in Aurora Cannabis (NYSE: ACB), Canopy Growth Corp. (NYSE: CGC), The Green Organic Dutchman (OTC: TGODF) and others.

Friday made the week for the index thanks to the big moves from those Canadian pot stocks.

But it was a strong week for American pot stocks as well!

The U.S. Marijuana Index surged 4%…

Chart - U.S. Marijuana Index

Like its Canadian brethren, the U.S. index reflects some remarkable moves.

For instance, shares of CBD maker Charlotte’s Web Holdings (OTC: CWBHF) blasted off, gaining 47% last week.

The charge began as it signed the largest distribution deal in its history!

The company’s products will now be available in 1,350 Kroger (NYSE: KR) stores across 22 states. This makes Kroger the single biggest avenue for the CBD maker. And takes its current retail footprint to more than 8,000 locations.

These are the big moves pot stocks are prone to. And we can expect more in the coming days…

The High Five

Below are this week’s High Five, where – each Monday – I cover the five pot stocks I believe will make major moves – up or down – in the week ahead.

With earnings on the horizon, not much has changed from last week’s High Five.

1) Cronos Group (Nasdaq: CRON) will report second quarter earnings on Thursday.

Expectations are for revenue to increase 118% to CA$5.67 million. But its per-share loss is expected to expand to CA$0.02.

Like Aphria, Aurora Cannabis and Canopy, Cronos is a big market mover. So all eyes are going to be on those results. And there are high expectations after seeing such strong reports from Aphria and OrganiGram Holdings (Nasdaq: OGI) recently.

Cronos also acquired the U.S. CBD business from Redwood Holding Group last week, including its high-end Lord Jones brand. This is about expanding its U.S. footprint.

2) GW Pharmaceuticals (Nasdaq: GWPH) will report results tomorrow after the closing bell. Expectations are for revenue to soar 1,261% to $47.05 million. And we’re also looking for the Epidiolex maker to see earnings jump to $1.34 from a loss of $1.26 a year ago.

3) Innovative Industrial Properties (NYSE: IIPR) shares have been hammered the last two weeks, even dipping below $100. The only dividend-paying pure cannabis play and real estate investment trust (REIT) will report second quarter results after the bell on Wednesday.

Analysts are looking for revenue to soar 151.7% to $8.34 million with earnings per share (EPS) of $0.29.

The REIT also bought a property in Holyoke, Massachusetts, last week for $3.5 million. Then it instantly turned around and leased it for 10 years to Trulieve Cannabis Corp. (OTC: TCNNF).

4) CV Sciences (OTC: CVSI) will report second quarter results tomorrow after the closing bell.

Similar to Charlotte’s Web, CV Sciences inked an expanded partnership with Kroger for its PlusCBD brand to be available in 1,350 stores.

Wall Street wants to see CV Sciences report $17.45 million in revenue with EPS of $0.02.

5) Columbia Care (OTC: CCHWF) will also make sure tomorrow evening is a busy one for cannabis investors. The medical cannabis company will report second quarter earnings after the bell.

As always, we’re going to compare the performance of our High Five with the benchmark Horizons Marijuana Life Sciences Index ETF (OTC: HMLSF).

First, we can see the big spike from Friday. Second, as has been the norm, the picture is mixed…

Chart - The High Five

Columbia Care and CV Sciences have been out in front of the ETF. Both are in the green over the past month.

GW Pharmaceuticals is right in line with the ETF. Meanwhile, Cronos and Innovative Industrial have lagged.

It’s interesting, in a week where there was no real earth-shattering cannabis sector news, pot stocks performed well. There were no headlines for sellers and shorts to latch onto and amplify the pressure. Instead, we saw positive moves on better-than-expected earnings – which I predict we’ll see more of. And we saw shares jump-started by deals.

Pot stocks are prone to big moves.

That’s easily been proven over the past few weeks. Thankfully, the last several sessions, the move was up, not down. That’s the streak we want to see continue.

If you have a pot stock in mind that you’d like me to discuss here, leave a comment below.

Here’s to high returns,

Matthew