Increased investor confidence in the future of cannabis is helping shares in Canadian cannabis producers to sustain their rally, This is true of both the medicinal and recreational-use markets. Additionally, the US's legalisation of hemp has opened up this market to a number of major Canadian producers who see significant changes in US legislation on the horizon.
There was even more good news for Cronos Group with industry heavyweight Altria Group (NYSE:MO) investing $1.8 billion in the company in return for a 45% stake.
Short-term market sentiment will be determined by the quarterly financial reports of Aurora Cannabis (TO:ACB), Cronos Group (NASDAQ:CRON) and Tilray (NASDAQ:TLRY), which are to be published within the next few weeks. Investors will be expecting these producers to report sharp sales growth as a result of the recent increase in market outlets. They will also want to hear about their respective 2019 strategies.
For these reasons, we can expect to see increased volatility in this sector and any remotely significant development could trigger a marked jump or abrupt drop in share prices.
Financial scouts are predicting unit share price rises for the major cannabis producers within the following ranges: Canopy Growth (CGC) - $50-50.5, Cronos Group (CRON) $24-25, and Aphria Inc. - $11-12. Meanwhile, they expect shares in Aurora Cannabis to hit the $8.5-9 mark, with Tilray rising as high as $84-85.
Ivan Marchena, Libertex Analyst