Medical marijuana update: Tweed takes off as industry lags behind it

Chris Parry Chris Parry, Stockhouse.com
3 Comments| April 7, 2014


While US marijuana stocks were hurting Monday, Canadian plays still managed to get their heads above water – the biggest being Tweed Marijuana (TSX:V.TWD, Stock Forum), which climbed a whopping 39%.
A host of investors appeared to have given new Canadian medical marijuana player Tweed a sidestep on opening day of its Venture listing, a smart move judging by the dip it experienced Friday.

But a new week and stable base has seen those same investors now ready to jump into sweeter waters and there doesn’t seem to be any shortage of new players.

Tweed jumped to $3.60 on 6m volume, and the price has been steadily increasing all day, leaving the company with a $126 million market cap on 35.1 million shares outstanding.

It hasn't all been peaches for Tweed however, as one of their shipments of product from formerly licensed growers to their facility was seized by Kelowna RCMP.
 
88 Capital (TSX:V.EEC, Stock Forum) has completed an 8-to-1 share consolidation. The new structure will see the company share price at $0.24, with 11.7 million shares outstanding for a $2.8 million market cap. The deal marks the first news release for the company since it announced it was going into the medical marijuana field.
 
UPPERS:
A report from Pinnacle Digest on Pacific North West Capital Corp (TSX:V.PFN, Stock Forum) that mentioned it owns a chunk of medical marijuana player Next Gen Metals (CSE:C.N, Stock Forum) has seen that stock boosted 53% in Monday trading on close to 1m volume.

That Next Gen connection appears to have been enough to get a medical marijuana-like share bump for PNWCC after many months of slumping. The company had lost 2/3 of its value since October of 2013 before a recent spike in interest.
 
Part of the reason behind the surge may be that interested US investors with access to the TSX can't necessarily access the CSE, making PWNCC a backdoor trading option for Next Gen stock.
 
Pan American Fertilizer (TSX:V.PFE, Stock Forum) is ‘full on ganj’, so says a piece in the Financial Post last Friday that announced an over-subscribed private placement of $775k and that the company will be looking to go full bore into the MMJ fertilizer game, both in Canada and Uruguay, where it engages currently. Uruguay has recently announced it has legalized cultivation, distribution and consumption of marijuana. Stock up 13.6%.

DOWNERS:
There’s a widespread range of down weed stocks in the ganjosphere today, led by Alchemist Mining (TSX:V.AMS, Stock Forum) and Enertopia (CSE:C.TOP, Stock Forum). Calyx Bio-Ventures (TSX:V.CYX, Stock Forum) also plunged, having yet to really grab the weed conversion tiger by the tail. Next Gen Metals dropped 17.6%, even while its investor, Pacific North West Capital Corp rocketed.

Satori Resources (TSX:V.BUD, Stock Forum) continued its slump, losing a cent to $0.07 on no news, and Maple Leaf Green World (TSX:V.MGW, Stock Forum) finally deflated some after a week of crazy 300% gains.
 
SHORT HITS:
Abatti Bioceuticals (CSE:C.ATT, Stock Forum) lost 6% on news it had hired IR firm TDM Financial.
GrowLife (OBB:PHOT, Stock Forum) lost 13% despite news it had acquired the exclusive rights to sell more product lines through its distribution chain.
Pew Research says 75% of Americans polled said cannabis will eventually become a legal business across the US.
Affinor Resources/Global Hemp Group (CSE:C.GHG, Stock Forum) announced after close of trading Friday that it has closed its first tranche of financing for $1m proceeds. Stock fell 4.3%.
Chlormet Technologies (TSX:V.CMT, Stock Forum) remains trade halted pending news.
 
INSIDE DIRT:
Coverage posted by BrokerBank Securities and Small Cap Street is the subject of considerable online consternation after the websites posted negative statements about medical marijuana player Fortitude Group (OTO:FRTD, Stock Forum), causing the stock to plunge early Monday.
Fortitude stock plummeted from $0.075 to $0.041 before 11am Eastern, but has quickly climbed back to the open in subsequent hours following allegations BrokerBank and Small Cap Street are behind a shorting blitz on the company.
The CEO of FRTD has reportedly requested an investigation from federal regulators and has discussed the issue with attorneys.
Among things said in the release, the details of which you can only access if you give an email address, is:
There are just too many red flags for investors to ignore at this point.
  • No financial data has been made available since 9-30-13.
  • The company has renamed itself five times since 2007.
  • 20% of the company’s quarterly expenses for the quarter ended 9-30-14 were for Investor Relations and the other 80% was for salaries.
  • The company has no revenue as at 9-30-13.
  • The company website fortitudegroupinc.com is “under construction”.
  • The company seems to be making any deal that it can to see what sticks to the wall.
The incident is just the latest in a PR war between a loose online investor buying group calling itself #Wolfpack, and self-promoting short player Timothy Sykes.
Wolfpack investment targets such as AvWorks Aviation Corp (OTO:SPLI, Stock Forum) and Minerco Resources (OTCQB:MINE, Stock Forum) have already suffered large stock losses as a result of continued shorting over the last week, and FRTD was its most recent pick.
Marijuana stocks are generally down today, with the US Marijuana Index dropping 4.7% to $17.97 on 483m volume.
 
NEW PLAYERS:
Papuan Precious Metals (TSX:V.PAU, Stock Forum) wants in on marijuana or, as it’s referring to it, “agricultural projects.” I don’t expect them to be raising chickens. A share consolidation may be considered which, at $0.025, is a case of ‘no kidding.’

Spearmint Resources (TSX:V.SRJ, Stock Forum) has also entered the MJ fray. Hat tip to reader Fraser for the heads up.

And then there's the threat that it might not get legalized at all: The Trailer Park Boys are lobbying Ottawa to not legalize marijuana. In theatres soon.


 
The Mercenary Geologist, Mickey Fulp, has an interesting take on the weed bubble: He thinks it's much ado about nothing. An interesting read.

THE MOVERS:
V.PFN   0.100 +0.035 +53.85% 983.07k
V.TWD   3.590 +1.000 +38.61% 6.46m
V.TFR   0.025 +0.005 +25.00% 215k
V.WPO   0.070 +0.010 +16.67% 20k
V.PFE   0.125 +0.015 +13.64% 50.52k
V.SL   0.055 +0.005 +10.00% 3.42m
RAGO   0.103 +0.003 +3.00% 560.75k
V.THC   0.125 0.000 0.00% 815.1k
C.SOU   0.420 0.000 0.00% 0
V.SNR   0.150 0.000 0.00% 0
V.CVN   0.045 0.000 0.00% 233.1k
V.WER   0.045 0.000 0.00% 814.75k
V.CMT   0.465 0.000 0.00% 0
V.CL   1.210 0.000 0.00% 5.65k
V.JOR   0.040 0.000 0.00% 589.02k
V.SEW   0.250 -0.005 -1.96% 34.4k
V.WIF   0.135 -0.005 -3.57% 13k
C.GHG   0.110 -0.005 -4.35% 404.15k
V.MJX   0.085 -0.005 -5.56% 71.91k
V.BHS   0.145 -0.010 -6.45% 136.5k
C.ATT   1.520 -0.130 -7.88% 744.87k
C.AFI   0.345 -0.030 -8.00% 1.2m
V.NSP   0.315 -0.030 -8.70% 37.32k
V.MSC.H   0.290 -0.035 -10.77% 645.04k
PHOT   0.505 -0.065 -11.42% 30.6m
EAPH   0.037 -0.005 -11.93% 12.03m
PMXO   0.021 -0.003 -11.93% 156k
V.BUD   0.070 -0.010 -12.50% 725.68k
NGMC   0.040 -0.006 -13.04% 1.66m
C.TOP   0.490 -0.080 -14.04% 215k
V.PXR   0.030 -0.005 -14.29% 90k
ROSV   0.076 -0.014 -15.56% 493.19k
MDRM   0.156 -0.029 -15.89% 834.02k
V.ACP   0.050 -0.010 -16.67% 389.5k
C.N   0.280 -0.060 -17.65% 213.69k
V.CYX   0.090 -0.020 -18.18% 817.39k
V.MGW   0.065 -0.015 -18.75% 879.85k
V.AMS   0.145 -0.035 -19.44% 90k
 
Check back daily for the latest news in this sector.

For more stories on this sector, see our Medical Marijuana section.

Follow me on Twitter at @ChrisParry

Send tips, news, suggestions to chris(dot)parry(at)stockhouse(dot)com


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