Thursday , 18 August 2022

The 5 Cannabis Stock Categories ALL Declined Last Week

The cannabis/marijuana/pot/weed sector, call it what you will, consists of 5 distinct categories – LPs, MSOs, psychedelics, auxiliary (i.e. goods and service suppliers) and major company investors – and they each perform quite differently from each other.

By Lorimer Wilson, Founder and Managing Editor of munKNEE.com – Your Key to making money!

#$$4$  Below are the 5 categories that are tracked by my proprietary indices, the constituents in each index with their low/average/high market capitalizations and low/average/high stock price performances, and each category’s average stock performance over the past week, month-to-date, YTD and from their peaks in 2021:

  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 range from a low of US$458M (Organigram) to a high of US$2,340.0M (Tilray) with an average of US$1,360M.
      • The stock prices range from a low of US$1.46 (Organigram) to US$5.57 (Canopy) with an average of US$3.68/share as of today.
    •  The Index was DOWN -14.7% for the week ending April 22nd this past week and is now DOWN -26.2% so far in April, DOWN -31.5% YTD and DOWN -88.3% from its peak in February 2021. 
  2. 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 range from a low of US$227M (Goodness Growth) to a high of US$4,580M (Curaleaf) with an average of US$1,466M.
      • The stock prices range from a low of US$1.78 (Goodness Growth) to US$16.80 (Trulieve) with an average of US$6.32/share as of the end of trading on April 22nd.
    • The Index went DOWN -7.2% for the week ending April 22nd, is DOWN -17.7% so far in April and is now DOWN -30.3% YTD and DOWN -67.9% from its peak in February 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$115M.
      • The market capitalization of the above stocks range from a low of US$116.1M (Forian) to a high of US$5,790M (Scotts Miracle-Gro) with an average of US$1,717.6M.
      • The stock prices range from a low of US$3.56 (Forian) to US$155.00 (Innovative) with an average of US$46.87/share as of the end of trading on April 22nd. All but one (Turning Point) are now BELOW their 52-week lows!
    •  The Index went DOWN -8.1% for the week ending April 22nd, and is now DOWN -17.8% so far in April,  DOWN -38.7% YTD and DOWN -59.0% from its peak in 2021. 
  4. 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 range from a low of US$11.66B (Molson Coors) to a high of US$103.03B (Anheuser-Busch) with an average of US$63.48B.
      • The stock prices range from a low of US$22.05 (Imperial Brands) to US$250.96 (Constellation) with an average of US$80.76/share as of Friday, April 22nd.
      • All 7 constituents pay dividends with yields ranging from just 0.9% for Anheuser Busch to 11.4% for Imperial Brands.
    • The Index went DOWN -0.2% for the week ending April 22nd, but is UP +5.4% so far in April, UP +4.3% YTD but is still DOWN -3.5% from its peak in 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$70M.
      • The market capitalization of the above stocks range from a low of US$63.3M (Zynerba) to a high of US$118.6M (Cybin) with an average of US$81.7M.
      • The stock prices range from a low of US$0.37 (Numinus) to US$1.49 (Zynerba’s 52-week low) with an average of US$091/share as of the market close on Friday, April 22nd.
    • The Index went DOWN -9.6% for the week ending April 22nd, and is now DOWN -16.3% so far in April, DOWN -47.5% YTD and DOWN -80.8% from its peak in 2021. 

Four other companies with market caps in excess of US$400M 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 range from a low of US$368M (Mind Medicine) to a high of US$884M (GH Resources) with an average of US$637.7M.
    • The stock prices range from a low of US$0.87 (Mind Medicine) to US$17.11 (GH Resources) with an average of US$8.84/share as of the market close 0n Friday, April 22nd.
    •  These 4 stocks went DOWN -7.7% for the week ending April 22nd, and are now collectively DOWN -5.7% so far in April, DOWN -35.0% YTD and DOWN -65.1% from its peak in 2021. 

In Summary

Below is a summary as to how the 5 cannabis categories performed for the week ending April 22nd, in descending order:

  1. The Conservative Pot Stocks Index
    • went DOWN -0.2% this week, and is now
    • UP +5.4% so far in April and
    • UP +4.3% YTD and is now
    • DOWN -3.3% from its peak in 2021.
  2. The Pure-Play American MSO Pot Stock Index
    • went DOWN -7.2% this week, and is now
    • DOWN -17.7% so far in April,
    • DOWN -30.3% YTD and
    • DOWN -67.9% from its peak in February 2021.
  3. The Ancillary Pot Stock Index
    • went DOWN -8.1% this week, and is now
    • DOWN -17.8% so far in April,
    • DOWN -38.7% YTD and
    • DOWN -59.0% from its peak in 2021.
  4. The Pure-Play Psychedelic Compounds-Based Stocks Index 
    • went DOWN -9.6% this week, and is now
    • DOWN -16.3% so far in April,
    • DOWN -47.5% YTD and
    • DOWN -80.8% from its peak in 2021.
  5. The Pure-Play Canadian LP Pot Stock Index
    • went DOWN -14.7% this week, and is now
    • DOWN -26.2% so far in April,
    • DOWN -31.5% YTD and
    • DOWN -88.3% from its peak in February 2021.

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