Sunday , 25 September 2022

An Overview of the 5 Cannabis Categories: Their Performances YTD

person holding white flower during sunset

Image Source: Unsplash

By Lorimer Wilson

Most investors incorrectly believe that cannabis stocks, regardless of their areas of concentration, all move in line with one another, but this is not the case. The cannabis sector consists of 5 distinctly different categories and they have each performed quite differently this past week, since the end of June and YTD, as outlined in this article:

  1. The Conservative Pot Stocks Index: -1.2% last week; +3.5% in the last 7 weeks; -0.1% YTD
    • The Index consists of 6 tobacco, beer, and liquor companies that have invested heavily in the cannabis industry, namely, Altria Group (MO); Anheuser-Busch  (BUD); British American Tobacco (BTI); Constellation Brands (STZ);  Imperial Brands (IMBBY) and Molson Coors Brewing Company (TAP) and they all pay dividends with yields ranging from just 1.0% for Anheuser Busch to 8.6% for Altria and average out at 3.2%.
  2. The Ancillary Pot Stock Index: -5.1% last week; -8.0% in the last 7 weeks; -58.2% YTD
    • The Index consists of the 7 largest companies providing goods and services to the cannabis sector, namely, AFC Gamma (AFCG); Forian (FORA);  Hydrofarm (HYFM); GrowGeneration (GRWG); Innovative Industrial Properties (IIPR); Scotts Miracle-Gro Company (SMG) and Turning Point Brands (TPB) which trade for at least US$3/share on the Canadian and/or American stock exchanges and have a market cap of at least US$100M.
  3. The Pure-Play American MSO Pot Stock Index: +11.7% last week; +24.1% in the last 7 weeks; -47.1% YTD
  4. The Pure-Play Canadian LP Pot Stock Index: +2.8% last week; +21.8% in the last 7 weeks; -50.0% YTD
    • The Index consists of the 5 largest Canadian Licensed Producers, namely: Aurora (ACB); Canopy Growth (CGC); Cronos (CRON); Organigram (OGI), and Tilray (TLRY) which trade for at least US$1/share on the Canadian and/or American stock exchanges and have a market cap in excess of US$250M.
    • Read Canadian Cannabis Stocks Rebounded This Week that details the performance of each of the constituents.
  5. The Pure-Play Psychedelic Compounds-Based Stocks Index: +9.8% last week; +49.5% in the last 7 weeks; -32.6% YTD
    • The Index consists of 8 psychedelic compound-based and marijuana (THC) drug companies in the clinical stages of research and development of treatments for a wide variety of mental illnesses, namely, Allied (ALID);  Cybin (CYBN); Atai (ATAI); Seelos (SEEL), Compass Pathway (CMPS); Mind Medicine (MNMD); GH Resources (GHRS) and Zynerba (ZYNE which trade on the Canadian and/or American stock exchanges and have market caps of at least US$50M.

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