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Happy Friday everyone,
The only constant in cannabis right now is that things move quickly — and what a week it’s been.
There was a slew of earnings this week, including Kush Bottles, a maker of cannabis packaging, and Innovative Industrial Properties (IIPR), a cannabis-focused real estate investment trust, or REIT.
Their earnings were two bright spots among a backdrop of slumping cannabis stocks, many of which have lost over 50% this year. IIPR operates on a sale-leaseback model, which in turn, helps cash-starved cannabis companies with capital. That’s a good business to be in right now — the stock gained over 10% after it reported Q3 earnings on Wednesday, and continues to climb.
For Kush Bottles, Cowen analyst Vivien Azer maintained her outperform rating, citing the company’s 186% revenue growth and growing CBD business. But Azer expects Kush Bottles’ vape business to decline by 20-25% next year, amid a spate of lung injuries linked to vaping.
Your favorite rapper and Toronto’s prodigal son — not me, Drake — entered into a partnership with Canopy Growth. Analysts were mostly positive about the move, but one Jefferies analyst said that while Drake’s star power is a good branding opportunity, celebrity brands “are not a key driver of shareholder value.”
Next week, we’ll be watching Canopy Growth and Cronos Group’s earnings. We’re also going to be reporting on some interesting new cannabis research findings, and we’ll be taking a pulled-back look at the cannabis sector slowdown.
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Here’s what we wrote about this week:
Some cannabis stocks now have the green light from US wealth managers like Morgan Stanley, Merrill Lynch, and Wells Fargo. We have details on firms’ policies.
The burgeoning legal cannabis industry has seen a surge in initial public offerings and dealmaking. But financial advisers at some of the largest US wealth managers hadn’t been permitted to allow their clients to buy and sell cannabis stocks — until recently.
Business Insider has learned that some of the biggest wealth-management firms in the US — including Morgan Stanley, Bank of America, and Wells Fargo — have set up processes to allow financial …read more
Source:: Business Insider