Tuesday , 28 June 2022

Only 1 Cannabis Category Up YTD; 3 Others Down More Than 40%!

The cannabis sector consists of 5 distinct categories and they are performing quite differently from each other. 

By Lorimer Wilson, Founder & Managing Editor of munKNEE.com and a frequent contributor to eResearch.com, usfinancepost.com, bitgrum.com and talkmarkets.com.

This article summaries the stock performances of each category index during the second week of May, YTD and from their peaks in 2021, as follows, in descending order:

  1. The Pure-Play Canadian LP Pot Stock Index

    • 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$400M.
      • The market capitalization of the above stocks ranged from a low of US$420M (Organigram) to a high of US$2,350M (Canopy) with an average of US$1,319M.
      • The stock prices ranged from US$1.23 (Organigram) to US$5.92 (Canopy) with an average of US$3.56/share.
      • The performance of each of the Index constituents is outlined here.
    • The Index went UP 1.0% during the second week in May and is now DOWN 33.7% YTD and DOWN 88.6% from its peak in February 2021.
  2. The Conservative Pot Stocks Index

    • 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).
      • The market capitalization of the above stocks ranged from a low of US$11.5B (Molson Coors) to a high of US$102.4B (Altria) with an average of US$6.1B.
      • The stock prices ranged from a low of US$21.25 (Imperial Brands) to US$248.92 (Constellation) with an average of US$79.59/share
      • All 6 constituents pay dividends with yields ranging from just 1.0% for Anheuser Busch to 12.1% for Imperial Brands.
    • The Index went UP 0.7% during the second week of May, and is now UP 2.8% YTD but is still DOWN 4.9% from its peak in 2021.
  3. The Ancillary Pot Stock Index

    • The Index consists of the 7 largest companies providing goods and services to the cannabis sector, namely, AFC Gamma (AFCG); Forian (FORA); GrowGeneration  (GRWG); Hydrofarm (HYFM);  Innovative Industrial Properties (IIPR); Scotts Miracle-Gro Company (SMG) and Turning Point Brands (TPB) which trade for at least US$1/share on the Canadian and/or American stock exchanges and have a market cap of at least US$100M.
      • The market capitalization of the above stocks ranged from a low of US$102M (Forian) to a high of US$5,820M (Scotts Miracle-Gro) with an average of US$1,602M.
      • The stock prices ranged from a low of US$2.99 (Forian) to US$138.47 (Innovative) with an average of US$42.60/share.
    •  The Index went DOWN 0.6% during the second week of May and is now DOWN 44.2% YTD and DOWN 62.7% from its peak in 2021.
  4. The Pure-Play American MSO Pot Stock Index

    • The Index consists of the 13 largest American Multi-State Operators, namely, Acreage (ACRDF/ACRHF); Ascend Wellness  (AAWH); Ayr Wellness (AYRWF);  Columbia Care (CCHWF); Cresco  (CRLBF); Curaleaf (CURLF); Goodness Growth (GDNSF); Green Thumb (GTBIF); Jushi (JUSHF); Planet 13 (PLNHF);  TerrAscend  (TRSSF); Trulieve  (TCNNF) and Verano (VRNOF) which trade for at least US$1/share on the Canadian and/or American stock exchanges and have a market cap of at least US$200M.
      • The market capitalization of the above stocks ranged from a low of US$211M (Goodness Growth) to a high of US$4,160M (Curaleaf) with an average of US$1,295M.
      • The stock prices ranged from a low of US$1.61 (Goodness Growth) to US$14.77 (Trulieve) with an average of US$5.12/share.
      • The performance of each of the Index constituents is outlined here.
    • The Index went DOWN 3.1% during the second week of May and is now DOWN 43.5% YTD and DOWN 73.9% from its peak in February 2021.
  5. The Pure-Play Psychedelic Compounds-Based Stocks Index 

    • The Index consists of 6 psychedelic 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); Field Trip (FTRP); Numinus (NUMIF); Seelos  (SEEL) and Zynerba (ZYNE) which trade on the Canadian and/or American stock exchanges and have market caps of at least US$40M.
        • The market capitalization of the above stocks ranged from a low of US$40.9M (Zynerba) to a high of US$67.9M (Cybin) with an average of US$57.6M.
        • The stock prices ranged from a low of US$0.28 (Numinus) to US$0.94 (Field Trip) with an average of US$0.63/share.
        • The performance of each of the Index constituents is outlined here.
    • The Index went DOWN 11.5% during the second week of May, and is now DOWN 63.6% YTD and DOWN 86.7% from its peak in 2021.

Four other companies with market caps in excess of US$300M are followed but are not included in the Index due to their size, namely, Atai (ATAI);  Compass Pathways (CMPS); GH Resources (GHRS) and Mind Medicine  (MNMD).

  • The market capitalization of the above stocks ranged from a low of US$320M (Compass Pathway) to a high of US$580M (Atai) with an average of US$434M.
    • The stock prices ranged from a low of US$0.78 (Mind Medicine) to US$9.77 (GH Resources’ 52-week low) with an average of US$5.45/share.
    • These 4 stocks went DOWN 12.7% during the second week of May, and are now collectively DOWN 59.9% YTD and DOWN 78.5% from its peak in 2021.

In Summary

This is how the 5 cannabis categories performed during the second week of May, YTD, and from their peaks in 2021, in descending order:

  1. The Pure-Play Canadian LP Pot Stock Index
    • went UP 1.0% during the second week of Mayand is now
    • DOWN 33.7% YTD and
    • DOWN 88.6% from its peak in February 2021.
  2. The Conservative Pot Stocks Index
    • went UP 0.7% during the second week of May, and is now
    • UP 2.8% YTD but is still
    • DOWN 4.9% from its peak in 2021.
  3. The Pure-Play American MSO Pot Stock Index
    • went DOWN 3.1% during the second week of May, and is now
    • DOWN 43.5% YTD and
    • DOWN 73.9% from its peak in February 2021.
  4. The Ancillary Pot Stock Index
    • went DOWN 0.6% during the second week of May, and is now
    • DOWN 44.2% YTD and
    • DOWN 62.7% from its peak in 2021.
  5. The Pure-Play Psychedelic Compounds-Based Stocks Index 
    • went DOWN 11.5% during the second week of May, and is now
    • DOWN 63.6% YTD and
    • DOWN 86.7% from its peak in 2021.

Having the cannabis sector analyzed in such a fashion highlights the disparity between the 5 categories and provides you information necessary to decide which, if any, category to invest in.

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