You are reading an issue of New Cannabis Ventures’ weekly newsletter, which we have been publishing since October 2015. The newsletter contains unique insights to help our readers stay up to date, as well as links to the week’s most important news.
Every Friday, we evaluate the performance of dozen of cannabis stocks by comparing similar companies for subscribers to our premium subscription service 420 Investor. We discussed this process a little over a year ago, describing the different subsectors that make up the entire cannabis sector.
Today we are breaking down the market a little differently, including 4 levels of multi-state operators, 3 levels of subsidiary companies, 3 levels of Canadian licensed manufacturers, Canadian retailers, CBD companies, international operators and biotech companies, for a total of 14 different subsectors .
In the past, cannabis stocks have tended to move in unison for the most part, but we suggested last June that we expect returns to increasingly diverge, and this will certainly be the case through 2021.
Since the beginning of the second quarter, the New Cannabis Ventures Global Cannabis Stock Index has fallen 15.8%, following a rally of 41% in the first quarter. While the largest MSOs have returned a similar amount on average since late March, returns have varied widely, with Green Thumb Industries dropping just 0.5% and Trulieve 28%:
Similarly, returns on revenue fluctuated significantly in the second tier of MSOs, with Harvest benefiting from the Trulieve acquisition:
Returns on the largest Canadian LPs have fluctuated significantly, with Canopy Growth declining almost twice as much as Cronos Group:
A particularly stark contrast is in the ancillary financial sector, where Innovative Industrial Properties rose 19% while Power REIT fell 18%:
While Power REIT has lagged the index slightly and its competitors more clearly, it far outperformed even the best-performing CBD company:
We have only shared a few subsectors and only over a single period of time, but the variability in returns is pretty obvious beyond our examples. The year-to-date rating for the largest cannabis companies by market capitalization further illustrates this. Of the 14 companies with a market capitalization of $ 2.4 billion or more, only three outperformed the 18.7% return on the Global Cannabis Stock Index. Of the remaining 11, 7 have positive returns but lag behind the index, and 4 have even declined:
These 14 largest companies lagged the overall market as they averaged 11% return since the start of the year, another sign that investors need to focus on stock picking rather than just betting on the biggest companies. Smaller companies averaged higher returns in 2021, but picking the right stocks was important. Getting hold of stocks like GW Pharma and Harvest Health & Recreation prior to the announcement of their takeover bids certainly helped generate outperforming returns.
The fundamentals and dynamics of the subsectors and the stocks they contain vary more than ever. Unsurprisingly, we see volatility in equity returns. In our view, cannabis investors are well served to spend time analyzing individual stocks rather than taking a more passive approach such as picking the largest stocks.
Cannabis stock research, news and model portfolios
Get the facts and be ready for major milestones and catalysts with a subscription to Alan Brochstein’s 420 Investor, the longest running due diligence platform that cannabis investors have trusted for over 7 years. 420 Investor’s primary goal is to provide professional, real-time, objective information on the top cannabis companies in the market to help investors benefit from Cannabis ™.
New Cannabis Ventures publishes curated articles as well as exclusive news. Here is some of the most interesting business content this week:
For real-time updates, download our free mobile app for Android or Apple devices, e.g. E.g. our Facebook page or follow Alan on Twitter. Share and discover industry news with like-minded people in the largest cannabis investor and entrepreneur group on LinkedIn.
Be Ahead of the Crowd! If you are a cannabis investor and find value in our Sunday newsletters, subscribe to 420 Investor, Alan’s comprehensive stock due diligence platform since 2013. Get instant access to detailed, real-time and market intelligence on the publicly traded cannabis market. Sector, including daily videos, weekly chats, model portfolios, a community forum and much more.
Use the suite of professionally managed NCV cannabis stock indices to monitor the performance of publicly traded cannabis companies in a day or over a period of time. In addition to the comprehensive Global Cannabis Stock Index, we offer a number of indices for tracking Canadian licensed producers as well as the American Cannabis Operator Index and the Ancillary Cannabis Index.
Check out the Public Cannabis Company Revenue & Income Tracker, which lists the top-selling cannabis stocks with industry revenue of more than $ 12.5 million per quarter.
Stay up to date on some of the key announcements from publicly traded companies by watching upcoming conference calls on cannabis investor earnings.
Discover upcoming new listings with the curated Cannabis Stock IPOs and New Issues Tracker.
Alan & Joel
Alan is based in Houston and leverages his experience as the founder of the online community 420 Investor, the first and still largest due diligence platform focused on publicly traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and enable its sustainable growth. At New Cannabis Ventures he is responsible for content development and strategic alliances. Before Alan, who began his career on Wall Street in 1986, switched his focus to the cannabis industry, he worked as an independent research analyst after over two decades in research and portfolio management. A prolific writer with over 650 articles published on Seeking Alpha since 2007, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source for the media including the NY Times, the Wall Street Journal, Fox Business , and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | E-mail
Get our Sunday newsletter
In this article:
gnln, greenlane, Lowell Farms, LOWL, LOWLF, Tilray, TLRY, Verano, VRNO, vrnof, Wana brands