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CRON, CGC Sink Ahead of Earnings: What To Watch From These Pot Stocks

Recreational marijuana is now legal in Canada as well as a number of states in the U.S. Companies have raced to get in on the multibillion-dollar a year industry, so let's see how two of the bigger pure-play pot stocks, Cronos Group CRON and Canopy Growth CGC , are projected to perform Tuesday.

The Canadian government voted to legalize recreational marijuana use in June, becoming only the second country in the world to legalize the drug nationwide. Meanwhile, nine U.S. states and the District of Columbia currently allow legalized recreational marijuana use, with 30 states giving the okay for medical use.

The growing legalization has led to a major influx of companies in the quickly expanding legal marijuana industry. There are now multiple ETFs tracking pot stocks, as well as large companies, including Scotts Miracle-Gro Company SMG , Molson Coors TAP , and others that have plans to inch into the marijuana business. But these companies have microscopic exposure to the pot industry at the moment.

Cronos Group

Cronos Group became the first pure-play medical marijuana company to list on an American exchange when it debuted on the Nasdaq in late February. The firm invests in companies that are licensed to produce and sell medical-grade pot. Unfortunately for investors, shares of CRON have plummeted over 36% since going public. Cronos stock also closed regular trading down 2.18% to $5.83 share on Monday.

The company is projected to see its quarterly revenues soar 460% to $2.69 million, based on our current Zacks Consensus Estimate. Meanwhile, its full-year revenues are expected to skyrocket nearly 650% to $23.87 million. However, the company is projected to post an adjusted quarterly loss of $0.01 per share for both the quarter and its current fiscal year-which is hardly surprising for a company operating in a relatively new industry.

Cronos is scheduled to announce its second quarter financial results before the opening bell Tuesday.

Canopy Growth

Moving on, Canopy offers dry cannabis and oil products primarily under its Tweed brands. The company is expected to cash in on the first recreational marijuana shops that are set to open in Canada in October. Plus, Canopy landed a massive partnership last year with alcoholic-beverage maker Constellation Brands STZ that will see the companies launch cannabis-infused beverages down the line. Furthermore, Constellation bought a roughly 10% stake in the firm.

Canopy is projected to see its quarterly revenues soar over 78% to hit $21.04 million, based on our current estimate. Looking further ahead, CGC's full-year revenues are projected to skyrocket by 385% to $295.72 million.

However, at the bottom end of the income statement, the company is expected to post an adjusted quarterly loss of $0.12 per share, which would mark a 140% decline. Canopy is also projected to report a full-year loss, but it is projected to be less than its loss in the year-ago period.

Shares of CGC sunk 5.38% during regular trading Monday to hit $26.73 per share. Canopy is scheduled to report its quarterly financial results after market close on Tuesday.

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Constellation Brands Inc (STZ): Free Stock Analysis Report

Molson Coors Brewing Company (TAP): Free Stock Analysis Report

Scotts Miracle-Gro Company (The) (SMG): Free Stock Analysis Report

Canopy Growth Corporation (CGC): Free Stock Analysis Report

Cronos Group Inc. (CRON): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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