Cannabis stocks had a terrible fourth quarter as the broader market selloff took cannabis stocks along for the ride into red territory. The Green Market Report Cannabis Company Index fell by 33% in the fourth quarter after a scorching hot third quarter in which stocks jumped over 50%.
One of the most successful cannabis ETFs, The Horizons Marijuana Life Sciences Index ETF (HMLSF) (HMMJ: TSX) and its sister ETF Horizons Emerging Marijuana Growers Index ETF (HMJR:NEO) have rebalanced their portfolios adding new companies to the basket of stocks.
"This has been a difficult quarter for the Marijuana sector, and the slowdown in growth contributed to fewer names being added to HMMJ's portfolio" said Steve Hawkins, President and CEO of Horizons ETFs. "Long-term, we believe there are still quite a few drivers of growth for the sector, including the growth of global medical marijuana opportunity and continued liberalization of marijuana laws in the U.S. Both of these factors could help drive Marijuana stocks further in 2019".
The HMMJ added the following companies:
| Name | Ticker | Exchange |
| Khiron Life Sciences Corp. | KHRN | TSX Venture Exchange |
| MediPharm Labs Corp. | LABS | TSX Venture Exchange |
| Auxly Cannabis Group | XLY | TSX Venture Exchange |
Khiron Life Sciences Corp.
Back in September, Canaccord Genuity initiated coverage on Khiron Life Sciences with a speculative buy rating and a $3 price target. The stock was C$1.37 at that time and lately was trading near C$1.60. Analyst Kimberly Hedlin said, "In our view, Khiron Life Sciences is positioned to secure a sizeable market share given its first-mover advantage, low-cost operations, robust medical platform and strong management team. We believe the stock provides an attractive entry point with rare exposure to LATAM medical cannabis." Khiron operates in Columbia but is planning on expanding in the region and that could include Mexico. Hedlin went on to add, "We see further upside through international licensing agreements, the launch of branded CBD and THC products (expected in 12-18 months), and potential insurance coverage for cannabis prescriptions within the next two years (which could potentially double our value if prices and volumes rise as expected)."
Last month the company said that it completed its acquisition of the Latin American Institute of Neurology and the Nervous System. The company said that the ILANS network represents 100,000 patients in Colombia and will position Khiron with approximately C$10.5 Million in gross revenue. Khiron also said that the acquisition will provide a secure and scalable revenue stream and opportunity to enhance profitability from introducing medical cannabis to ILANS patients.
MediPharm Labs
MediPharm Labs Corp. (MLCPF) (LABS:TSXV) is fairly new to the public markets. It was founded in 2015 and was the first licensed producer of cannabis oil production in Canada. MediPharm has an extract supply agreement with Canopy Growth Corp. (CGC) which states that Canopy has committed to buying 450kg of cannabis extract from MediPharm over the next 18 months, with an option to buy another 450kg.
The company also just announced that it entered into an initial three-year extraction agreement for processing of dried cannabis to cannabis oil concentrates with TerrAscend Corp. (TRSSF) (TER:CSE). The agreement stated that TerrAscend will supply bulk quantities of dried cannabis to MediPharm for processing on a fee for service basis into bulk resin or other premium cannabis oil derivative products sold under TerrAscend brands. "We are off to a strong start in 2019 with the addition of TerrAscend to our portfolio of high-quality cannabis oil extraction partners," said Mr. Pat McCutcheon, President and CEO, MediPharm Labs. "This Agreement and others like the one we've signed with TerrAscend, provide steady operational throughput, increased efficiency and a solid revenue base as we scale our business to 250,000 KG of dried cannabis extraction capacity annually."
Auxly Cannabis
Auxly was once known as Cannabis Wheaton and is a group of entrepreneurs that invest strategically in cannabis companies. As of the third quarter the company had over $236 million in cash and cash equivalents. The company's platform is characterized by three different verticals: Upstream, Midstream and Downstream. The upstream segment acquires cultivation capacity. The midstream focus is on intellectual property and the downstream is centered on the distribution channel.
In the company's last quarterly report it said that it's cornerstone midstream asset Dosecann entered into a definitive international supply agreement with Aphria (APHA) . Auxly also said that its acquisition of KGK Science will bring clinical study and research study capabilities in-house to support the Dosecann product pipeline expected to launch in late 2019.
HMJR
The Emerging Marijuana Growers Index or HMJR is a basket of primarily North American publicly listed small-cap companies. It added the following names to its portfolio:
| Name | Ticker | Exchange |
| FSD Pharma Inc. | HUGE | Canadian Securities Exchange |
| Harvest Health & Recreation | HARV | Canadian Securities Exchange |
| Emerald Health Therapeutics | EMH | TSX Venture Exchange |
| Neptune Wellness Solutions | NEPT | Toronto Stock Exchange |
| Elixinol Global Ltd. | EXL | Australian Stock Exchange |
| Trulieve Cannabis Corp. | TRUL | Canadian Securities Exchange |
| Eve & Co. Inc. | EVE | TSX Venture Exchange |
| Rubicon Organics Inc. | ROMJ | Canadian Securities Exchange |
| Heritage Cannabis Holdings Corp. | CANN | Canadian Securities Exchange |
| Biome Grow Inc. | BIO | Canadian Securities Exchange |
| GTEC Holdings Ltd. | GTEC | TSX Venture Exchange |