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Aug. 16, 2019, 7:24 a.m. EDT

Canopy Growth slides 14% to drag broader cannabis sector lower as earnings disappoint

Canopy lost more than a billion Canadian dollars in its latest quarter to deal yet another blow to the troubled cannabis sector

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By Ciara Linnane, MarketWatch

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Elsewhere in the sector, shares of Aurora Cannabis /zigman2/quotes/210559470/composite ACB -2.85% /zigman2/quotes/203734337/delayed CA:ACB -2.08% , the most widely held of the Canadian licensed producers, were down 2.9% after the company said it has increased the size of a credit facility to C$360 million from C$200 million.

Just last month, a BofA Merrill Lynch analyst downgraded Aurora in a note that questioned the rate at which it was burning cash. Analyst Christopher Carey said the company would likely need funding some time in the next few quarters, noting it has C$230 million of convertible debt that matures in the first quarter of 2020, and that may need to paid in cash, if the stock fails to rally sharply between now and then.

Also: Aphria’s $70 million cash windfall is a product of its still-unexplained past

Tilray shares /zigman2/quotes/209129655/composite TLRY -0.56%  fell another 10%, in a continued response to earnings released Tuesday, that showed losses that were wider than expected but revenue that was greater than expected. Alliance Global Partners said they still expect top-line and margin improvement in 2020 as new form factors come on line and international sales and CBD become bigger contributors to sales.

“While we believe management’s long-term outlook on the market and profitability is appropriate given aspirations to be a global leader in the space, we believe the stock’s premium multiple reflects leadership position and as a result, we maintain our neutral rating and $50 price target,” analyst Aaron Grey wrote in a note.

Elsewhere in the sector, Cronos /zigman2/quotes/206842762/composite CRON -2.04%   /zigman2/quotes/202715342/delayed CA:CRON -1.65%  was down 5.4%, OrganiGram Holdings’s stock /zigman2/quotes/209289540/lastsale OGI -4.31% was down 2.8%. and Aphria /zigman2/quotes/207425803/composite APHA -2.63%   /zigman2/quotes/205566616/delayed CA:APHA -2.88%  was down 1.9%.

Hexo /zigman2/quotes/206508254/composite HEXO -8.39%  was down 4.8%. Aleafia /zigman2/quotes/203485112/delayed ALEAF -0.62%   /zigman2/quotes/200214885/delayed CA:ALEF 0.00%  was down 2.2%.

CannTrust /zigman2/quotes/201332942/composite CTST -4.86% /zigman2/quotes/206800806/delayed CA:TRST -1.73%  fell another 2%, days after revealing regulatory issues with a second of its Ontario facilities.

Read now: KPMG withdraws audits for CannTrust’s 2018 and March quarter after illegal grow scandal

The Horizons Marijuana Life Sciences ETF /zigman2/quotes/208856346/delayed CA:HMMJ -0.75% was down 4%, with 46 of its 54 member stocks declining. The ETFMG Alternative Harvest ETF /zigman2/quotes/204332491/composite MJ -1.58%  was down 3%, with 23 of its 36 members falling.

The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.07% and the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.40%  were traded lower Wednesday.

Read now: Cannabis industry’s lobbying on track to hit a record

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US : U.S.: NYSE
$ 3.58
-0.10 -2.85%
Volume: 3.92M
Oct. 21, 2019 10:12a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$3.79 billion
Rev. per Employee
$94,401
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/zigman2/quotes/203734337/delayed
CA : Canada: Toronto
$ 4.71
-0.10 -2.08%
Volume: 1.31M
Oct. 21, 2019 9:57a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$4.95 billion
Rev. per Employee
$123,163
loading...
/zigman2/quotes/209129655/composite
US : U.S.: Nasdaq
$ 21.25
-0.12 -0.56%
Volume: 131,577
Oct. 21, 2019 10:11a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$2.09 billion
Rev. per Employee
$62,689
loading...
/zigman2/quotes/206842762/composite
US : U.S.: Nasdaq
$ 8.15
-0.17 -2.04%
Volume: 1.45M
Oct. 21, 2019 10:12a
P/E Ratio
18.43
Dividend Yield
N/A
Market Cap
$2.84 billion
Rev. per Employee
$55,248
loading...
/zigman2/quotes/202715342/delayed
CA : Canada: Toronto
$ 10.75
-0.18 -1.65%
Volume: 158,453
Oct. 21, 2019 9:57a
P/E Ratio
18.17
Dividend Yield
N/A
Market Cap
$3.73 billion
Rev. per Employee
$70,780
loading...
/zigman2/quotes/209289540/lastsale
US : U.S.: Nasdaq
$ 3.45
-0.16 -4.31%
Volume: 441,152
Oct. 21, 2019 10:12a
P/E Ratio
20.61
Dividend Yield
N/A
Market Cap
$562.26 million
Rev. per Employee
$49,972
loading...
/zigman2/quotes/207425803/composite
US : U.S.: NYSE
$ 4.63
-0.13 -2.63%
Volume: 1.36M
Oct. 21, 2019 10:12a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$1.19 billion
Rev. per Employee
$147,410
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/zigman2/quotes/205566616/delayed
CA : Canada: Toronto
$ 6.06
-0.18 -2.88%
Volume: 559,625
Oct. 21, 2019 9:57a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$1.57 billion
Rev. per Employee
$190,843
loading...
/zigman2/quotes/206508254/composite
US : U.S.: NYSE
$ 2.51
-0.23 -8.39%
Volume: 1.73M
Oct. 21, 2019 10:12a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$703.54 million
Rev. per Employee
N/A
loading...
/zigman2/quotes/203485112/delayed
US : U.S.: OTC
$ 0.64
-0.0040 -0.62%
Volume: 27,234
Oct. 21, 2019 9:52a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$175.38 million
Rev. per Employee
N/A
loading...
/zigman2/quotes/200214885/delayed
CA : Canada: Toronto
$ 0.83
0.00 0.00%
Volume: 102,373
Oct. 21, 2019 9:55a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$225.72 million
Rev. per Employee
N/A
loading...
/zigman2/quotes/201332942/composite
US : U.S.: NYSE
$ 1.26
-0.06 -4.86%
Volume: 578,394
Oct. 21, 2019 10:12a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$186.76 million
Rev. per Employee
$133,643
loading...
/zigman2/quotes/206800806/delayed
CA : Canada: Toronto
$ 1.70
-0.03 -1.73%
Volume: 130,658
Oct. 21, 2019 9:55a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$244.76 million
Rev. per Employee
$171,989
loading...
/zigman2/quotes/208856346/delayed
CA : Canada: Toronto
$ 10.52
-0.08 -0.75%
Volume: 52,758
Oct. 21, 2019 9:57a
loading...
/zigman2/quotes/204332491/composite
US : U.S.: NYSE Arca
$ 19.30
-0.31 -1.58%
Volume: 100,009
Oct. 21, 2019 10:12a
loading...
/zigman2/quotes/210598065/realtime
US : Dow Jones Global
26,788.06
+17.86 +0.07%
Volume: 41.57M
Oct. 21, 2019 10:12a
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
2,998.23
+12.03 +0.40%
Volume: 271.79M
Oct. 21, 2019 10:12a
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Ciara Linnane is MarketWatch's investing- and corporate-news editor. She is based in New York.

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