Cannabis

Even with a gain of +$75 million on Tuesday, short sellers in the twenty most shorted cannabis stocks are down -$132 million, -4.0%, in net-of financing mark-to-market losses in December, bringing year-to-date P\L down to +$993 million. The biggest short-side losers for the month are shorts in Canopy Growth (CGC US, WEED CN), GW Pharma (GWPH US), Aphria Inc (APHA US, APHA CN) and Cronos Group (CRON US, CRON CN). The biggest short-side winners are Aurora Cannabis (ACB US, ACB CN); Charlottes Web (CWBHF US, CWEB CN) and Tilray Inc (TLRY US). In 2019, Aurora Cannabis (ACB US, ACB CN) and Cronos Group (CRON US, CRON CN) were the best performing shorts in the sector, with both shorts the only stocks with over $200 million of year-to-date mark-to-market profits.

Even with a gain of +$75 million on Tuesday, short sellers in the twenty most shorted cannabis stocks are down -$132 million, -4.0%, in net-of financing mark-to-market losses in December, bringing year-to-date P\L down to +$993 million. The biggest short-side losers for the month are shorts in Canopy Growth (CGC US, WEED CN), GW Pharma (GWPH US), Aphria Inc (APHA US, APHA CN) and Cronos Group (CRON US, CRON CN). The biggest short-side winners are Aurora Cannabis (ACB US, ACB CN); Charlottes Web (CWBHF US, CWEB CN) and Tilray Inc (TLRY US).

The twenty most shorted cannabis stocks are up +5.2% in morning trading as Canopy Growth (CGC US, WEED CN) named ex-Constellation Brand Inc’s (STZ US) CFO, David Klein, as its new CEO. Canopy Growth is up almost 12% on the news.

The twenty most shorted cannabis stocks are up over +9.6% in mid-day trading as BofA ML raised its rating on Canopy Growth (CGC US, WEED CN) to a buy; Green Organic Dutchman (TGODF US, TGOD CN) gained access to several additional provinces outside of Ontario; and Altria Group (MO US) increased its Cronos Group (CRON US, CRON CN) holding by 6.7 million shares to keep its 45% ownership level. In addition, the House Judiciary Committee approved H.R. 3884, a bill which would allow and tax cannabis sales federally by a vote of 24-10.

The twenty most shorted cannabis stocks were down over -3.00% on Thursday ahead of Canopy Growth’s (CGC US, WEED CN), Green Organic Dutchman (TGODF US, TGOD CN) and Cronos Group’s (CRON US, CRON CN) earnings next week.

The major shorts in the cannabis sector continue to slide this week and are down over -2% this morning after BofA analysts Carey and Lewandowski downgraded Canopy Growth (CGC US\WEED CN) from buy to neutral and cut their target price to $27 last week. They cite an expectation of a slowdown in near-term industry growth and the negative impact of vaping legislation. The top twenty shorts in the sector are up over $200 million in mark-to-market profits since Friday.

short int is $49 mm; 4.46 mm shs shorted; 11.54% of float; 18.93% borrow fee. Shs shorted up +200k, +4.70%, over last 30 days as price fell -14%. Short int up +196k last week as price fell -11%. Shorts up +$1.8 mm in mark-to-market profits today, down just -$232k in September. 

We are seeing the second consecutive day of price weakness in the Cannabis Sector after a mini-rally in the first week of September. Shorts in the top 20 most shorted Cannabis Stocks were up over +$100 million in mark-to-market profits yesterday and are up over +$44 million in mid-morning trading.