7 Reasons Aurora, Canopy, Cronos, and HEXO Are All At or Near 6-Month Lows

华尔街对于未来10年大麻行业预期过分乐观,供货不足、股权稀释等问题不容忽视

2019-07-18 08:30:00 Motley Fool

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For years, the marijuana industry has been "kicking bud" and taking names. Between 2014 and 2018, the duo of Arcview Market Research and BDS Analytics finds that global licensed cannabis sales have grown from $3.4 billion to $10.9 billion, which gives validity that certain pie-in-the-sky sales projections offered up by Wall Street over the next 10 years are very possible. This growth has also played a big role in pushing pot stock valuations considerably higher. But the luster of the green rush has worn off in a big way since the first quarter ended. Following a blistering increase of at least 70% for more than a dozen popular marijuana stocks in the first quarter, 25 pot stocks hit the skids and lost at least 20% in the second quarter. Since July began, this weakness has continued to persist. Last week, the four most popular marijuana stocks on the planet -- Aurora Cannabis (NYSE: ACB), Cronos Group (NASDAQ: CRON), Canopy Growth (NYSE: CGC), and HEXO (NYSEMKT: HEXO) -- all either hit levels last seen in January 2019 or came very close to doing so. Despite these four pot stocks being perceived as industry leaders, there are a handful of catalysts holding them and the industry back. Let's run down the current problems, one by one. For anyone who has followed the launch of recreational cannabis in Canada since mid-October, you're likely well aware of the country's persistent supply problems. Much of this can be traced back to Health Canada and the arduous (and slow) process it undertakes when reviewing cultivation, processing, and sales licensing applications. Through this past weekend, Health Canada had approved fewer than 200 total licenses since 2013, yet it had more than 800 applications on its desk for review, as of the end of 2018. The good news here is that Health Canada has introduced new rules to help reduce its application backlog. However, it's still going to be many months, if not multiple quarters, before the regulatory agency is able to completely work through its backlog and give more growers and processors the green light. Health Canada is also to blame for the delay in rolling out high-margin derivative cannabis products. Derivatives are nontraditional dried flower products, such as edibles, vapes, cannabis-infused beverages, concentrates, tinctures, and topicals. With the industry long expecting a mid-October 2019 launch, at the latest, Health Canada recently announced that derivatives are unlikely to reach dispensary shelves until mid-December and that the rollout would be staggered, much in the same way the launch of dried flower went last year. Although we're only talking about a relatively short-term delay in the grand scheme of things, it's nevertheless big news when you're dealing with pot stocks that sport premium valuations. Cronos Group, for instance, expects to be reliant on vape sales and commercial cannabinoid production, whereas HEXO has more than 600,000 square feet of facilities set aside for extraction and manufacturing. This delay really hurts the margin prospects for both companies in the near term. In case you haven't noticed, earnings reports actually matter now for marijuana stocks. Even though Canadian weed stocks have been suffering with the aforementioned supply shortage, Wall Street hasn't exactly been forgiving of widening losses and sequential quarterly sales declines. Canopy Growth and Aurora Cannabis, which have both been busy expanding their international presence, are expected to lose money in fiscal 2020, while Cronos and HEXO have seen Wall Street's consensus profit projections decline considerably for 2020 over the past three months. Sure, there's still plenty of sales growth potential in the quarters that lie ahead, but none of the most popular marijuana stocks are expected to be significantly profitable anytime soon. Another persistent problem throughout much of the industry is share-based dilution. Despite Canadian cannabis stocks now having access to traditional forms of financing from banks, many are still leaning on share issuances to generate capital for organic projects or to fund joint ventures and acquisitions. Aurora Cannabis, as an example, has made 15 acquisitions in just shy of three years. But over the past five years has seen its outstanding share count increase by a not-so-subtle 1 billion. Even with the added value of the businesses Aurora has acquired, it's difficult for longtime shareholders to absorb so many stock issuances without there being adverse impacts. If and when Aurora does push toward profitability, this sea of shares could really constrain its earnings-per-share potential. These popular cannabis stocks have also fallen victim to trust issues in the marijuana space. Most recently, CannTrust Holdings (NYSE: CTST) announced that it was noncompliant with Canadian cannabis regulations and was growing pot in five unlicensed rooms between October and March. Since the announcement of this wrongdoing, CannTrust has seen 12,700 kilos of inventory placed on hold, and operations have partially ceased while the investigation by Health Canada is ongoing. The admission that CannTrust, a projected top-five grower, had skirted growing regulations likely means that there are other companies out there failing to follow the rules. While that doesn't absolve CannTrust of its blatant blunder, it does raise trust issues throughout the entire industry. Image source: Getty Images. Despite strong public favorability toward legalization in the United States, it's looking increasingly unlikely that cannabis will be de-scheduled by the federal government anytime soon. Republican Senate Majority Leader Mitch McConnell (R-Ky.) hasn't allowed riders or stand-alone cannabis bills to reach the Senate floor for vote, which likely means no chance of reform until well into 2021. That's bad news for all four of these popular pot stocks, as they all have plans to enter a U.S. market that would dwarf Canada in terms of total legal weed sales. Canopy Growth and HEXO have already announced their entrance into the U.S hemp market, with Aurora and Cronos expected to lay out their plans to do the same over the next year. While it's still a positive that these companies are getting processing infrastructure in place on U.S. soil, as well as building U.S. business relationships, real cannabis reform in the U.S. is still years away. Finally, it's important for investors to recognize the nature of "next-big-thing investments." As potentially the fastest-growing industry over the next five to 10 years, marijuana very much qualifies as a next-big-thing investment. And this is why cannabis stock valuations have skyrocketed in recent years. But investor expectations have a way of always outpacing actual results, at least in the early going for these up-and-coming fast-paced industries. The cannabis industry is going to need time to mature, and that probably means more bumps than investors in this space have been accustomed to in recent years.
多年来,大麻产业一直在“踢芽”并取名。2014年至2018年,Arcview Market Research 和 BDS Analytics 的两家公司发现,全球许可大麻销售额已从34亿美元增长至109亿美元,这使得华尔街在未来10年提出的某些天派销售预测成为可能。这一增长也在推动股市大幅走高方面发挥了重要作用。 但自第一季度结束以来,这股绿色热潮的光彩已大幅减弱。今年第一季度,十几只受欢迎的大麻类股票上涨了至少70%,25只大麻类股票暴跌,第二季度至少下跌了20%。自7月开始以来,这种疲软持续存在。 上周,全球最受欢迎的四只大麻股票——奥罗拉(Aurora) Cannabis ( NYSE : ACB )、 Cronos Group ( NASDAQ : CRON )、 Canopy Growth ( NYSE : CGC )和 HEXO ( NYSEMKT : HEXO )——要么达到了2019年1月的水平,要么达到了非常接近的水平。 尽管这四只股票被认为是行业领先者,但仍有少数几家催化剂支撑着它们,而该行业又回来了。让我们逐一了解当前的问题。 对于任何从10月中旬开始在加拿大推出休闲大麻的人来说,你都很可能意识到该国持续存在的供应问题。这在很大程度上可以追溯到加拿大卫生部,以及在审查种植、加工和销售许可申请时所进行的艰难(和缓慢)过程。截至上周末,加拿大卫生部自2013年以来共批准了不到200个许可证,但截至2018年底,已有800多个申请在其办公桌上接受审查。 这里的好消息是加拿大卫生部引入了新的规则来帮助减少其应用程序的积压。然而,在监管机构能够完全解决积压问题并给更多的种植者和加工者绿灯之前,这还需要很多个月,如果不是几个季度的话。 加拿大卫生部也要对延迟推出高利润率的衍生大麻产品负责。衍生物是非传统的干花制品,如食用品、蚕豆、大麻精饮料、浓缩液、酊剂和外用。鉴于制药业一直期待2019年10月中旬上市,加拿大卫生部( Health Canada )最近宣布,衍生品在12月中旬之前不太可能进入药房货架,而且推出将是错开的,与去年干花上市的方式大致相同。 虽然我们只是在谈论一个相对短期的延迟,在大计划的事情,但这是一个重大的新闻,当你处理的壶股票,体育溢价估值。例如, Cronos Group 预计将依赖于 vape 销售和商业大麻生产,而 HEXO 拥有600,000多平方英尺的提取和制造设施。这种延迟确实在短期内损害了两家公司的利润率前景。 如果你没有注意到,现在大麻股票的收益报告其实很重要。尽管上述供应短缺令加拿大野草类股遭受重创,但华尔街并未完全原谅不断扩大的亏损和连续的季度销售下滑。 Canopy Growth 和奥罗拉(Aurora) Cannabis 两家公司都在忙于扩大国际业务,预计在2020财政年度将出现亏损,而 Cronos 和 HEXO 则认为,过去三个月里,华尔街对2020年利润的普遍预期大幅下降。当然,未来几个季度仍有很大的销售增长潜力,但预计最受欢迎的大麻库存短期内都不会有显著盈利。 整个行业的另一个持续存在的问题是基于股票的稀释。尽管加拿大大麻公司的股票现在可以从银行获得传统形式的融资,但许多公司仍然依靠股票发行为有机项目筹集资本或为合资企业和收购提供资金。 例如,奥罗拉•坎纳比斯(奥罗拉(Aurora) Cannabis )在不到三年的时间里完成了15笔收购。但在过去五年中,它的流通股数量增加了不那么微不足道的10亿股。即使加上奥罗拉(Aurora)收购的企业的附加值,长期股东很难在不产生不利影响的情况下吸收如此多的股票发行。如果奥罗拉(Aurora)确实在推动盈利,那么这股股票之海可能真的会限制其每股收益的潜力。 这些受欢迎的大麻库存也成为大麻领域信任问题的受害者。最近, CannTrust Holdings ( NYSE : CTST )宣布,该公司不遵守加拿大大麻法规,并在10月至3月期间在五个无许可证的房间里种植大麻。自从宣布这一不当行为以来, CannTrust 发现有12700公斤的库存被搁置,在加拿大卫生部正在进行调查的同时,运营部分停止。 该公司承认,预计前五名种植者 CannTrust 绕过了不断增长的监管规定,这可能意味着还有其他公司未能遵守相关规定。尽管这并不能免除 CannTrust 明显的错误,但它的确在整个行业引发了信任问题。 尽管公众强烈倾向于在美国合法化,但大麻似乎越来越不可能在短期内被联邦政府取消。共和党参议院多数党领袖麦康奈尔( R-Ky )一直不允许骑手或独立大麻法案进入参议院投票,这可能意味着直到2021年才有可能进行改革。 这对这四只热门股来说都是个坏消息,因为它们都计划进入美国市场,这将使加拿大在合法大麻销售总额方面相形见绌。Canopy Growth 和 HEXO 已经宣布进入美国.美国大麻市场,奥罗拉(Aurora)和 Cronos 预计将制定他们的计划,在明年做同样的事情。尽管这些公司在美国本土获得处理基础设施以及建立美国业务关系仍是积极的,但美国真正的大麻改革仍需数年时间。 最后,投资者必须认识到“下一件大事投资”的本质。 作为未来五到十年内增长最快的行业,大麻很有可能成为下一个重大投资。这就是为什么大麻的股票估值近年来飙升的原因。 但投资者的预期总有一种超越实际业绩的方式,至少在这些新兴的快节奏行业的早期。大麻产业需要时间才能成熟,这可能意味着这一领域的投资者近年来已经习惯了更多的颠簸。

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