Cannabis Stock Bull Market? – New Cannabis Ventures
You’re reading this week’s edition of the New Cannabis Ventures weekly newsletter, which we have been publishing since October 2015. The newsletter includes unique insight to help our readers stay ahead of the curve as well as links to the week’s most important news. We post this and all of the newsletters on our website here.
Friends,
The New Cannabis Ventures Global Cannabis Stock Index surged this month, and it is now up 26% in 2024 after the first quarter. This is a lot more than the performance of the rallying S&P 500, which is up just over 10%.
The index review, linked below, discusses the largest monthly movers. The index had 21 members in Q1, and 18 rallied. Only one stock fell sharply. Four stocks rose by more than 50%. Here is the complete set of returns sorted from best to worst:
Those stocks that outperformed the index by more than 20% are highlighted in green, while those that underperformed by more than 20% are in red.
Three of the top 5 winners were MSOs, while the other two were Canadian LPs. The five weakest names were mainly ancillary names, with one biotech company. Three of the four ancillary names were cannabis REITs. With dividends, their total returns would be higher than their price returns.
Focusing on the top 5, each of which has traded publicly the entire time since the peak in early 2021, the stocks are down at least 75% since 2/10/21:
Trulieve, after more than doubling this year, has performed better than the Global Cannabis Stock Index, which has dropped 89%. While Cresco Labs is now slightly better, the other three are worse.
We continue to view cannabis stocks are very cheap relative to their historic valuations. The big driver recently has been the potential rescheduling, which could terminate 280E taxation if cannabis becomes Schedule 3. While this would be very positive, it’s not yet a done deal. Cannabis investors have also been excited about Florida potentially having adult-use on the ballot in November. Again, even if the Florida Supreme Court allows this (stay tuned!), it’s not clear that the voters will approve it (60% must approve). The most recent potential bullish news is that Canada may change its taxation. Again, this is not a done deal.
So, while the index is up and a few names are very strong, it’s not clear to us that cannabis stocks are in a new bull market after a terrible bear market from early 2021. It seems, for now, like a bounce. Equity offerings have nailed the stocks of the companies that have taken this path. Hopefully, we get some good news regarding 280E!
New Cannabis Ventures publishes curated articles as well as exclusive news. Here is some of the most important content from this week:
Exclusive Articles
Global Cannabis Stock Index Soars In March
MSOs Trail Again
Capital Raising
AFC Gamma Finances Florida Cannabis Company
Organigram Sells Units to Raise C$25 MIllion
To get real-time updates download our free mobile app for Android or Apple devices, like our Facebook page, or follow Alan on Twitter. Share and discover industry news with like-minded people on the largest cannabis investor and entrepreneur group on LinkedIn.
Use the suite of professionally managed NCV Cannabis Stock Indices to monitor the performance of publicly-traded cannabis companies within the day or over longer time-frames. In addition to the comprehensive Global Cannabis Stock Index, we offer the Canadian Cannabis LP Index, the American Cannabis Operator Index and the Ancillary Cannabis Index.
View the Public Cannabis Company Revenue & Income Tracker, which ranks the top revenue producing cannabis stocks.
Stay on top of some of the most important communications from public companies by viewing upcoming cannabis investor earnings conference calls.
Discover upcoming new listings with the curated Cannabis Stock IPOs and New Issues Tracker.
Sincerely,
Alan
Based in Houston, Alan leverages his experience as founder of online community 420 Investor, the first and still largest due diligence platform focused on the 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 facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | Email
