Tuesday , 21 September 2021

Pure-Play Pot Stocks: Which Outperformed Last Week – LPs or MSOs?

At last count there were 225 cannabis and cannabis-related companies trading on the various North American stock exchanges of which only 23 meet the criteria* for inclusion in the munKNEE  Pure-Play “Seed-to-Sale” Pot Stocks Index. In turn, said Index is divided into the munKNEE Canadian Pure-Play Licensed Producers (LPs) Pot Stock Index and the munKNEE Pure-Play American Multi-State Operators (MSOs) Pot Stock Index. Did the LP or MSO constituents perform better last week, so far in July and YTD? This article has the answers.

By Lorimer Wilson, Managing Editor of munKNEE.com, Your KEY To Making Money!

*The criteria for inclusion in the munKNEE marijuana indices are vertically-integrated (Seed-to-Sale) companies that derive 100% of their revenue from the sector, have a market capitalization in excess of US$300 and trade for at least US$1/share. 6 of the Canadian LP stocks and 17 of the American MSO stocks meet those criteria.

In total, the munKNEE Pure-Play “Seed-to-Sale” Pot Stocks Index

  • was -1.7% last week,
  • has declined -11.4% so far in July (MTD) and
  • is now +7.1% YTD.

The sub-category munKNEE Canadian Pure-Play Licensed Producers Pot Stock Index

  • was -1.0% last week,
  • has declined -17.8% MTD and
  • is now +1.7% YTD.
    • Its constituents are: Canopy (CGC), Tilray (TLRY), Cronos (CRON),   Aurora (ACB), Organigram (OGI) and Hexo (HEXO).
      • only Hexo shares (-5.0%) changed price by 5% or more last week and they are now -25.2% so far in July and +13.0% YTD.

The sub-index munKNEE American Pure-Play Multi-State Operators Pot Stock Sub-Category Index

  • was -1.9% last week,
  • has declined -9.3% MTD, and
  • is now +9.1% YTD.
    • Its constituents are: Curaleaf (CURLF), Green Thumb (GTBIF), Trulieve (TRSSF), Verano (VRNOF), Cresco (CRLBF), TerrAscend (TRSSF), Columbia (CCHWF), Harvest Health (HRVSF), Ascend Wellness (AAWH), Planet 13 (PLNHF), Ayr (AYRWF), Jushi  (JUSHF), 4 Front (FFNTF), Charlotte’s Web (CWBHF), Gage (GAGE), Goodness Growth (GDNSF) and Acreage (ACRDF & ACRHF).
      • Ascend Wellness advanced the most last week (+4.9%) and is now -2.3% MTD.
        • announced that it had commenced trading on the OTCQX® Best Market, under the new symbol “AAWH.”
      • Harvest Health declined the most last week (-7.8%), has declined -12.5% MTD but remains +68.5% YTD.
        • announced that it had completed the divestiture of its cultivation and processing operations in Utah an immaterial amount of cash.
      • Jushi declined -6.3% last week, has declined 8.2% MTD and is now -13.5% YTD.
        • announced that its financial statements and financial data had to be presented subject to SEC reporting requirements applicable to U.S. domestic companies, effective January 1st, 2022, since more than 50% of the Company’s issued and outstanding subordinate voting shares were directly or indirectly owned by shareholders of record domiciled in the United States on June 30, 2021, and, therefore, no longer met the definition of a “foreign private issuer” under United States securities laws and, as a result, the Company will be deemed a U.S. domestic issuer under United States securities laws.
      • TerrAscend also declined -6.3%  last week , has declined -24.7% MTD and is now -14.6% YTD.

In Conclusion:

  • the munKNEE Canadian Pure-Play Licensed Producers Pot Stock Index of 6 stocks was:
    • -1.0% last week, is -17.8% MTD and is now +1.7% YTD.
  • the munKNEE American Pure-Play Multi-State Operators Pot Stock Sub-Category Index of 17 stocks was:
    • -1.9% last week, is -9.3% MTD, and is now +9.1% YTD and, in total,
  • the munKNEE Pure-Play “Seed-to-Sale” Pot Stocks Index was:
    • -1.7% last week, is -11.4% MTD and is now +7.1% YTD.

In reply to the opening questions as to which of the munKNEE LP and MSO indices perform better last week, MTD and YTD the answers are:

  • the LP index outperformed the MSO index marginally last week at -1.0% vs. -1.9%,
  • the MSO index has outperformed the LP index -9.3% to -17.8% MTD and
  • the MSO index has also outperformed the LP index at +9.1% vs. +1.7% YTD.

The above non-tradable indices replicate the performance of a portfolio investing an equal amount of money in each company in the cannabis categories, with daily rebalancing to maintain equal weight.