Weed industry scandals show why investors must be 'selective' about their buys, Jim Cramer says

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Stay away from companies that only have vague plans pending regulatory approval that are losing a lot of money, Jim Cramer says.

Shares of CannTrust, which first received its medical marijuana license year prior to cannabis legalization in Canada, peaked at $10.17 in March and has lost more than 75% of its value. Investors were buying into the company's potential to produce as much as 300,000 kilos of weed by the end of 2020, Cramer said. After missing Wall Street revenue and profit expectations in 2018, Canntrust turned a profit and beat estimates in its first-quarter report of 2019, according to Factset.

"As the scandal keeps blowing up, the pin action has been horrendous for the rest of the group. Some analysts are talking about a CannTrust contagion," Cramer said. Elsewhere, shares of Curaleaf are trading more than 30% under its $11.73 high in May. The U.S.-based medical cannabis company landed a partnership with CVS to sell cannabidiol products, but the country's Food and Drug Administration last week warned it was selling the products illegally with unsubstantiated treatment claims, CNBC

 

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I think HEXO will be a company whose cream rises to the top. Idk why Cramer keeps focusing on CGC and CRONOS, they've both had their share of hiccups and are burning through cash like shit thru a goose.

Start by not inviting Toni on your network. Bloop!

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