ETFs that track the budding cannabis industry led the charge on Wednesday as Organigram (NasdaqGS: OGI) surged on first-quarter revenue that more than doubled expectations.
Among the best performing non-leveraged ETFs of Wednesday, the ETFMG Alternative Harvest ETF (NYSEArca: MJ) advanced 5.4%, Cambria Cannabis ETF (TOKE) increased 5.7%, Global X Cannabis ETF (NASDAQ: POTX) surged 8.3%, AdvisorShares Pure Cannabis ETF (YOLO) gained 6.5%, Amplify Seymour Cannabis ETF (NYSEARCA: CNBS) rose 7.9% and The Cannabis ETF (NYSEARCA: THCX) jumped 7.1%.
Meanwhile, Organigram shares climbed 40.3% on Wednesday. OGI makes up 3.3% of CNBS, 2.8% of MJ, 2.0% of THCX, 3.2% of POTX, 3.6% of YOLO and 2.3% of TOKE.
“A return to the Organigram of old,” is how Jefferies analyst Owen Bennett described the fourth quarter results, MarketWatch reports.
“Given the high bar they had set themselves and two quarters of declining financials, this print should be a relief that headwinds were temporary and supports our confidence which sees OGI as one of our preferred picks in the cannabis industry,” Bennett said in a note.
Organigram revealed net revenue of C$25.2 million, or $19.3 million, for the quarter to end November, compared to C$12.4 million a year ago.
The company did not provide a net loss number, but said its net loss from continuing operations came to C$900,000, or $0.006 per share, compared to net income from continuing operations of C$29.5 million, or C$0.195 a share.
CIBC analysts argued the numbers were “surprisingly encouraging” despite a difficult operating environment.
“Our only concerns out of the quarter are a capital projects to-do list that should see spending remain stubbornly high, and questionable timing of equity financing,” analysts John Zamparo and Krishna Ruthnum said in a note.
Looking ahead, the company expects to introduce cannabis-infused chocolates in the second quarter, and it already has vapes on sale in some provinces, and will look to bulk sales to diversify revenue.
The industry was also looking to Capitol Hill, Wednesday, as the House Committee on Energy & Commerce holds a hearing on cannabis policies for the new decade.
For more information on the marijuana industry, visit our cannabis category.