American Cannabis Indices Rally in July

As we described in an earlier article, the Global Cannabis Stock Index had its first monthly gain in 17 months. The index rallied 4.3% off of the lowest close ever at the end of June. It is still down 53.1% in 2022.

In this exclusive article we will summarize the performance of the other managed indices that New Cannabis Ventures offers to its readers. We will discuss the performance of the American Cannabis Operator Index, Ancillary Cannabis Index and Canadian Cannabis LP Index as well as Canadian Cannabis LP index Tier 1, 2 and 3.

American Cannabis Stocks Index

The American Cannabis Operator Index rose dramatically in July, gaining 18.8% to 24.77:

For 2022, the index is now down 40.6%, which is much better than the Global Cannabis Stock Index:

This index, which launched at the end of October in 2018, still hasn’t taken out the March 2020 lows:

During July, the strongest performers were Planet 13 Holdings (OTC: PLNHF) (CSE: PLTH), up 61.7%, and MariMed (OTC: MRMD) (CSE: MRMD), up 54.3%, while the weakest name was the only decliner, Glass House Brands (CSE: GLAS.A.U) (OTC: GLASF), which fell 27.4% and is down 37.2% year-to-date.

For August, the index will include 15 names, with Ascend Wellness (OTC: AAWH) (CSE: AAWH) and Goodness Growth (OTC: GDNSF) (CSE: GDNS) both joining.

Ancillary Cannabis Index

The Ancillary Cannabis Index also gained more than the Global Cannabis Stock Index, increasing 7.3% to 27.27:

The year-to-date performance has been very weak, with the index down more than the overall market, falling 57.6%:

The index is down almost 73% since launching 16 months ago:

The best performing stock during July was GrowGeneration, up 35.1% but still down x% y-t-d. The worst performing stock was Innovative Industrial Properties (NYSE: IIPR), which disclosed an issue with a tenant in California. During the month, there were just 10 names that qualified for inclusion.  Joining for August is AgriFORCE (NASDAQ: AGRI).

The final part of the market for which we have a series of indices is the Canadian LP space. The Canadian Cannabis LP Index fell for the fourteenth consecutive month, declining 0.7% to 94.69 in July:

The index has declined 51.4% in 2022 from its year-end 2021 close of 194.95:

The index remains above its early-day lows, but it is down a lot from the peak:

During July, there were 5 double-digit percentage gainers and 4 double-digit percentage losers. The best Canadian Cannabis LP Index stock was The Valens Company (TSX: VLNS) (NASDAQ: VLNS), up 20.5%, while the worst was IM Cannabis (CSE: IMCC) (NASDAQ: IMCC). That stock’s NASDAQ listing is at risk due to the low price of the stock.

Many LPs don’t qualify to be in the index. At the end of the month, we removed Emerald Health (TSX: EMH) (OTC: EMHTF), which is selling its cannabis operations. We also moved Cannara Biotech (TSXV: LOVE) (OTC: LOVFF) from Tier 3 to Tier 2 due to the escalation in its revenue.

Canadian Cannabis LP Tier 1 Index

Tier 1 index fell 24.8% to 117.01 in June and increased 4.3% in July to 122.07. Tier 1, which is now down 61.2% in 2022, dropped 17.7% in 2021 when it ended at 314.28. Among Tier 1 companies, Tilray (TSX: TLRY) (NASDAQ: TLRY) and Organigram (TSX: OGI) (NASDAQ:OGI) were both up 17.0%, while HEXO Corp. (TSX: HEXO) (NASDAQ: HEXO) dropped 11.1%.

Canadian Cannabis LP Tier 2 Index

Tier 2 index rose 2.1% to 143.48 in June. In 2021, it lost 17.1%, closing at 267.36, and it is now down 46.3% in 2022. Among Tier 2 companies, there were two double-digit percentage gainers, including Valens at 20.5% and Cronos Group (TSX: CRON) (NASDAQ: CRON) at 13.1%.

Canadian Cannabis LP Tier 3 Index

Tier 3 index fell 4.5% to 23.35 in June. It ended at 47.42 in 2021, declining 19.9%, and is now down 50.8% in 2022.

New Cannabis Ventures maintains seven proprietary indices designed to help investors monitor the publicly-traded cannabis stocks, including the Global Cannabis Stock Index as well as the Canadian Cannabis LP Index and its three sub-indices. The sixth index, the American Cannabis Operator Index, was launched at the end of October 2018 and tracks the leading cultivators, processors and retailers of cannabis in the United States. Afterwards, we introduced the Ancillary Cannabis Index at the end of March 2021, reflecting the increasing number of publicly-traded companies providing goods or services to cannabis operators.

Exclusive article by Alan Brochstein, CFA
Alan Brochstein, CFA
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

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