Aleafia Health could become the latest company to join the growing list of marijuana stocks, while PepsiCo (PEP) said it has “no plans at this point” to make cannabis beverages but would still look into it.
Aleafia Stock Nasdaq Listing
The Canadian company submitted an application to list on the Nasdaq, saying that a listing on a big U.S. exchange would allow it to “rapidly accelerate” its business plans.
It would also expand its shareholder base, make it more attractive to institutional investors, and “provide unparalleled liquidity and place Aleafia among a small handful of Canadian cannabis companies.”
The company, which is already listed in Toronto, said it would submit registration papers to the Securities and Exchange Commission this week. The listing still needs to get the nod from the Nasdaq and SEC.
Aleafia said it will reach “fully funded” growing capacity — or how much cannabis its existing funds allow it to grow — of 38,000 kilograms of buds next year.
Marijuana Stocks Slip
Canopy Growth (CGC) listed on the New York Stock Exchange in May. Aurora Cannabis also said it plans to list on a big U.S. exchange.
Cronos Group fell 2.8% in the stock market today. Canopy Growth lost 3%. Tilray slid 4.6%.
Cronos Group last month said it had joined forces with Aleafia to study insomnia treatment.
No Weed Pepsi Yet
As more beverage and marijuana companies court one another, one company that’s staying cannabis-free, for now, is Pepsi, which sounded more cautious on marijuana than rival Coca-Cola (KO).
When asked about how it was approaching cannabis beverages, particularly nonpsycohactive cannabis ingredients, Pepsi management said they had no plans to move in.
“I think its fair to say we look at everything,” CFO Hugh Johnston said on PepsiCo’s earnings call on Tuesday. “But I think that the difficulties in investing in that category, particularly in the U.S., where federally these things are still not legal, are quite a considerable challenge.”
“We look at everything,” he said, “but certainly no plans at this point to do anything.”
Later, however, Johnston told CNBC that “I think we’ll look at it very critically, but I’m not prepared to share any plans that we may have in the space right now.”
CNBC’s Jim Cramer then asked: “Edibles or liquid?” Johnston laughed and replied: “I’ve already gone farther than I plan to.”
Pepsi fell 1.1% on Tuesday. The stock was drifting further from a 118.54 handle buy point.
Coca-Cola said last month that it was “closely watching the growth of nonpsychoactive CBD as an ingredient in functional wellness beverages around the world.” CBD, or cannabidiol, is advertised as having anxiety- and pain-reducing qualities.
Coca-Cola was said to be in talks with Aurora Cannabis over the possibility of producing cannabis-infused drinks. Coca-Cola said “no decisions have been made at this time” but notably didn’t mention the legal obstacles that Pepsi highlighted.
Coca-Cola crept 0.5% higher Tuesday. The stock was finding support at its 50-day line. Shares were trying to clear a 46.97 buy point.
India Globalization Capital Stock Jumps
Shares of India Globalization Capital (IGC) swept 60% higher in early-afternoon trading to $14.43. The gains accelerated after short seller Citron Research tweeted that the company was “all hype.” Citron also said the company was “the poster child of a cannabis bubble.”
In August, the stock was trading at lows of 36 cents.
IGC’s most recent launch higher began late last month after the company announced plans to the hemp-and-CBD drinks business. Share volume has surged over that time.
India Globalization Capital has two businesses. One, IGC’s legacy business, consists of commodities trading and heavy-equipment rental. The other is the medical cannabis business. IGC pulled in around $1.48 million in revenue last quarter. The legacy business drove all of those sales, the company said.
Tuesday’s rise gave the company a market value of around $446 million, according to IBD data.
IGC on Monday entered into an agreement in which the Benchmark Co. and ViewTrade Securities will help the company with plans to offer up to $15 million more of its common stock from time to time. But the company has warned that its stock has been volatile. It also warned that future sales of its stock could sink the price and dilute shareholders’ ownership.
Shares of IGC spiked in December after the company said it would use blockchain, the shared record-keeping technology behind Bitcoin, to address problems in the medical cannabis industry.
Shares, after doing little in the months that followed, rumbled higher in August. At one point, they more than doubled in value to $1.52 on Aug. 27.
The Maryland-based company, in press releases this year, has been marketing a product called Hyalolex. IGC describes it as a “cannabis-based supplement for treating and managing Alzheimer’s patients.”
IGC in mid-August said it had been “actively meeting” with manufacturers and distributors in California to bring Hyalolex to the state. California is set to be the world’s largest legal cannabis market. The company announced plans to enter the hemp and CBD energy drink market in September.
New Age Beverage (NBEV), which plans to unveil new CBD drinks this month, tumbled 6%, after stabbing lower during the morning.
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