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Cannabis compounds prevented Covid infection, what's next?

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Technical DNA wrote a column · Jan 13, 2022 15:21
Cannabis compounds prevented the virus that causes Covid-19 from penetrating healthy human cells, according to a laboratory published in the Journal of Nature Products.
New research found cannabis compounds, cannabigerolic acid (CBGA) and cannabidiolic acid (CBDA), can block the ceullar entry of COVID-19 and emerging variants from infecting human cells.
Cannabis compounds prevented Covid infection, what's next?
These compounds can be taken orally and have a long history of safe use in humans. They have the potential to prevent as well as treat infection by SARS-CoV-2.”
—— said Richard van Breemen, a researcher with Oregon State's Global Hemp Innovation Center.
And the findings were published in the Journal of Natural Products on Monday. 
With that in mind, let's look at some cheap cannabis stocks that are noteworthy.
No. 1 cannabis stock to track: Tilray
$Tilray Brands (TLRY.US)$ reported its financial results on Monday for the second fiscal quarter ended November 30, 2021, with net revenue of $155 million - up by around 20% year-over-year and down from $168 million in the first fiscal quarter. Net income increased to $6 million from a net loss of $89 million in the previous year quarter.
Tilray plans to build its business in the U.S. around its Manitoba Harvest hemp operations now that hemp is legal within the food industry. Tilray's CEO Simon disclosed Tilray's plans to infuse food and drinks with hemp and CBD, as an important part of its long-term strategy in the United States.
In terms of Europe, Tilray has already established a strong base in the EU – having established a distribution business in medical products that sells to 13 000 drugstores as well as two grow facilities that sell products to 20 different countries.
Cannabis compounds prevented Covid infection, what's next?
From Tilray's chart we can see that shares reclaimed the 10-day moving average and cleared downtrend resistance, although the stock faded hard from Monday's high. If Tilray stock can clear those marks, then the 50-day moving average and $10 level are in play.
No. 2 cannabis stock to track: Canopy Growth
Shares of Canada-based cannabis company $Canopy Growth (CGC.US)$ have declined significantly in price over the past few months. However, given that the company has recently introduced new products, is it wise to scoop up its shares now?
CGC said on Nov. 5, 2021, that its revenue is expected to accelerate in the second half of its fiscal 2022, but that the "magnitude and pace of improvement is expected to be more modest than previously anticipated."
It postponed meeting its positive adjusted EBITDA target due to market share challenges in the Canadian recreational business and a slower-than-expected ramp-up of U.S. distribution for BioSteel. 
Furthermore, Piper Sandler analyst Michael Lavery has downgraded the stock's rating to 'Underweight' from 'Neutral' and lowered the price target to $7 from $11. So, its near-term prospects look bleak.
Cannabis compounds prevented Covid infection, what's next?
However, CGC's price is down to the level of record low, let's see if the stock could rebound to the $10 level, along with the 50-day moving average.
No. 3 cannabis stock to track: Sundial Growers
Apart from Tilray, $SNDL Inc (SNDL.US)$ is another popular cannabis stock that has significantly underperformed the markets in the last three years. However, investors that are optimistic that U.S. federal legalization is on the horizon, may want to look at buying the dip. 
In 2020 Sundial reported sales of $60.9 million which were significantly lower compared to sales of $75.9 million in 2019. The decline in top-line is expected to continue as analysts expect sales to range around $49 million in 2021. In Q3 of 2021, Sundial reported revenue of $14.36 million, an increase of over 15% compared to year-ago sales that stood at $12.86 million.
Last year, Sundial explained it will focus on the sale of high-margin cannabis products to improve its profit margins. It also entered the cannabis financing business to provide debt as well as equity capital to pot producers. While Sundial is diversifying its revenue base, it reported negative investment sales of $4.8 million which show it has reported unrealized losses in this vertical.
Further, Sundial has diluted shareholder wealth at a rapid pace over the last two years. In fact, the total number of outstanding SNDL shares has surpassed two billion, up from just 105 million at the end of Q2 of 2020. In its most recent quarter, Sundial reported an operating loss of $18.8 million. 
But, the constant capital raise allowed Sundial to ensure its balance sheet is debt-free and provide it with the flexibility to make big-ticket investments in the cannabis sector. Sundial’s cash balance stood at $753 million at the end of Q3.
Source: Benzinga, Bloomberg, ZeroHedge, Stocknews
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