American Cannabis Operator Index Advances 32% in Q3 Despite September Pullback

After two back-to-back monthly gains of nearly 30%, the American Cannabis Operator Index retreated in September, falling 10.2% to 36.02:

The index, which launched at the end of October 2018 with a value of 100, reached a closing high of 124.16 a week later before declining to 70.64 in late December 2018. It then rallied as high as 119.53 in early April 2019 before selling off over the balance of the year, ending 2019 at 43.27. The index has now dropped 16.8% in 2020. After posting an all-time closing low on March 18th at 14.50, the index has now rebounded by 148.4%:

During September, the index included 17 companies, including 14 multi-state operators (MSOs) and 3 focused solely on CBD extracted from industrial hemp. Late in the month, Acreage Holdings was removed due to a corporate action which divided its shares into two new classes of stock. Two companies posted double-digit percentage gains, while most of the others fell more than 10%. Two names fell more than 20%:

The four best performing stocks included Vireo Health (CSE: VREO) (OTC: VREOF), Jushi Holdings (CSE: JUSH) (OTC: JUSHF), AYR Strategies (CSE: AYR.A) (OTC: AYRSF) and CV Sciences (OTC: CVSI). Vireo, which has declined 3% in 2020, detailed the time-line of the doubling of its Minnesota dispensaries, which are being rebranded as Green Goods, with all four new locations expected to open by year-end. Additionally, CEO Kyle Kingsley disclosed the purchase of 82,563 shares. Jushi, which is up 77% in 2020, extended its rally from mid-July. AYR Strategies, one of the strongest stocks in August after it announced an expansion into Pennsylvania, held on to most of its gains during September and is up 34% this year. CV Sciences rebounded from very weak performance in August and remains down 46% year-to-date.

The four worst performing stocks included Charlotte’s Web (TSX: CWEB)(OTC: CWBHF), 4Front Ventures (CSE: FFNT) (OTC: FFNTF), cbdMD (NYSE American: YCBD) and Trulieve (CSE: TRUL) (OTC: TCNNF). Charlotte’s Web reported its Q2 during the month and lowered its outlook. The stock has been one of the weakest stocks for each of the past four months and is down 69% in 2020. 4Front exited Maryland through the sale of three dispensaries. The stock has gained 27% year-to-date. cbdMD, one of the weakest names in August as well, signed a distribution agreement with Life Time. It has far outpaced its peers in the CBD space, falling just 7% thus far in 2020. Trulieve, one of the strongest stocks in August and still up 56% year-to-date, announced an expansion into Pennsylvania through acquisition and also sold 4.7 million in an underwritten offering.

For October, the number of names in the index will remain at 16.

In the next monthly review, we will summarize the performance for October and discuss any additions or deletions. Be sure to bookmark the page to stay current on American cannabis operators stock price movements within the day or from day-to-day.

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Exclusive article by Alan Brochstein, CFA
Alan Brochstein, CFA
Based in Houston, Alan leverages his experience as founder of online communities 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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