Marijuana stocks were broadly lower Thursday, with a key sector tracker falling into correction territory, but MedMen Enterprises Inc. was a standout gainer after the company announced a $682 million acquisition of U.S.-based medical cannabis dispensary PharmaCann LLC.
Shares of MedMen MMNFF, +4.74% the Culver City, Calif.-based cannabis company, rallied 6.9% in afternoon trade. The company said buying Oak Park, Ill., headquartered PharmaCann would give the combined company cannabis licenses in 12 states, operating 79 cannabis facilities.
“This is a transformative acquisition that will create the largest U.S. cannabis company in the world’s largest cannabis market,” said MedMen Chief Executive Adam Bierman.
The stock’s rally comes while the ETFMG Alternative Harvest exchange-traded fund MJ, -1.83% lost 0.8%, with 25 of 37 components losing ground, putting the pot-sector tracker in danger of a third-straight decline. The ETF has now lost 12% since the Sept. 20 record close of $43.01. Coincidentally, the S&P 500 index SPX, -2.19% record close was also on Sept. 20, and the broad-market tracker has lost 5.5% since then.
Many market watchers believe a decline of at least 10% to up to 20% on a closing basis from a bull-market peak defines a correction, while a selloff of 20% or more is a bear market.
Elsewhere, Tilray Inc.s’ Class 2 shares TLRY, -3.74% lost 2.2%, and have plunged 37% since closing at a record $214.06 on Sept. 19. The company said late Wednesday it closed on its $450 million debt offering, convertible into Class 2 common stock, in a private placement to “qualified” institutional buyers in the U.S. and Canada.
Shares of Aphria Inc. APHQF, +0.66% APH, +0.15% edged up 0.7%, holding ground after Wednesday’s 14% surge on the back of a Globe and Mail report that Marlboro cigarette maker Altria Group Inc. MO, -2.96% was in talks to buy an equity stake the Canada-based cannabis producer.
The stock was down as much as 6.7% earlier in the session, before bouncing, after the company said late Wednesday that while it “engages in discussions with potential strategic partners and/or investors from time to time, the company notes that there is no agreement in place with a potential investor at this time.”
Among other more-active marijuana stocks, New Age Beverages Corp. NBEV, -3.99% slumped 4.5%, India Globalization Capital Inc. (known as IGC) IGC, -12.75% tumbled 13%, Cronos Group Inc. CRON, -5.68% CRON, -4.92% gave up 4.5%, Aurora Cannabis Inc. ACBFF, -2.05% ACB, -2.51% lost 3.0% and Canopy Growth Corp. CGC, -1.53% WEED, -1.16% slipped 0.4%.