Buds & Duds: EnWave rises on Outperform rating while Supreme falls after announcing layoffs

Cannabis stocks shed weight on Wednesday in a sign that investors are still unsure about the industry’s long-term prospects. The North American Marijuana Index, which tracks the top cannabis stocks in the US and Canada, lost 1.5% at 97.1 points. Elsewhere, the Horizons Marijuana Life Sciences Index ETF fell 1.7% at C$8.25, while the OTCQX Cannabis index decreased by 1% to 402 points. Buds After getting an Outperform rating from Raymond James, EnWave Corp (CVE:ENW) (OTCMKTS:NWVXF) saw shares rise in Canada on Wednesday morning. Analyst Steve Hansen has put a C$2.50 share target (two cents above the consensus) on the stock, seeing the firm as "poised to demonstrate very robust revenue/EBITDA [earnings before interest, taxes, depreciation and amortization] growth throughout our forecast horizon". The share target reportedly represents a 72% return from Friday's closing share price. Last month, EnWave revealed it had inked a royalty-bearing commercial license agreement with a Colombian snack maker. Shares of EnWave rose 1.4% in Canada at C$1.48 and 1.4% over the counter at US$1.11. Duds The Supreme Cannabis Company Inc (TSE:FIRE) (OTCMKTS:SPRWF) becomes the latest cannabis firm to announce a round of layoffs. The Toronto-based company is letting go of around 15% of its 700 employees in a bid to focus on near-term revenue growth, the firm said Tuesday evening. Supreme is just one of many larger cannabis companies who have had to shed staff in an effort to reach profitability, following in the footsteps of Tilray, Aurora and Sundial Growers. Shares of the firm sank 10.1% in Toronto at C$0.40 and 5.3% over the counter at US$0.31 CannTrust Holdings Inc (TSE:TRST) (NYSE:CTST) was also down 3.4% at C$1.12 and 4.7% at US$0.85. Last week, the Ontario Supreme Court of Justice gave a consortium of law firms the go-ahead to move forward with a class-action lawsuit against the beleaguered licensed producer and its former executives stemming from its noncompliance scandal last year. Contact Angela at angela@proactiveinvestors.com Follow her on Twitter @AHarmantas