OrganiGram Spikes as Cannabis Stocks Continue Their Rally
OrganiGram Holdings (OGI) - Get Report was spiking Monday as cannabis stocks continued their ascent that started at the beginning of the year and surged last week.
Shares of the Canada-based OrganiGram Holdings were rising 35.5% to $3.16 in trading Monday.
The stock has been up four of the past five days, rising 122.64% year to date, according to Dow Jones.
The Horizons Marijuana Life Sciences exchange-traded fund, the main Canadian ETF tracking the Cannabis industry, was up 6.2% to $14.55 Monday.
The fund rose 22.3% to C$13.70, or US$10.75 during the past week.
Other cannabis companies rising Monday were Tilray (TLRY) - Get Report, up nearly 14%, Aurora Cannabis (ACB) - Get Report, up 9.6%, and Aphria (APHA) - Get Report was up 11.8%.
Cannabis stocks got a boost following news last week that Jazz Pharmaceuticals (JAZZ) - Get Report was buying GW Pharmaceuticals (GWPH) - Get Report for its treatments including cannabinoid-therapeutics for $7.2 billion in cash.
The acquisition will bolster the combined company’s efforts to develop, produce and commercialize regulator-approved therapeutics that address a range of diseases, including epilepsy-related seizures associated with Lennox-Gastaut syndrome, Dravet syndrome and tuberous sclerosis complex.
Investors have been bidding cannabis companies higher in hopes that federal legalization is possible. There also has been momentum in state-by-state legalization.
In addition, Canopy Growth (CGC) - Get Report, which is one of the companies in the Horizons Marijuana Life Sciences ETF, is scheduled to third-quarter results on Tuesday.
Last week, Piper Sandler analyst Michael Lavery downgraded Canopy Growth to neutral from overweight while keeping a price target of $27, according to the Fly.
Canopy shares are up 215% since October, Lavery said, likely driven by improving sentiment around cannabis and potential for U.S. legalization following the elections.
The analyst said that Canopy currently trades at 21 times estimated 2022 sales and he does not see further upside to valuation based on fundamentals. Lavery also noted that federal legalization of marijuana in the U.S. could still be two years away.
Analysts surveyed by FactSet expect the company to report a loss of 25 cents a share on sales $116.7 million.
Shares of Canopy Growth were up 2.38% to $43.95.
