American Cannabis Operator Stocks Bounce in April

After twelve consecutive monthly declines, the American Cannabis Operator Index extended its rally of off its all-time low set in March, increasing  6.3% to 22.42:

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 48.2% in 2020. After posting an all-time closing low on March 18th at 14.50, the index has now bounced by 54.6%:

During April, the index included 15 companies, including 12 multi-state operators (MSOs) and 3 focused solely on CBD extracted from industrial hemp. Several MSOs are pursuing CBD strategies apart from their state-licensed cannabis businesses, giving the index additional exposure to that market beyond the pure-plays. Seven companies posted double-digit percentage gains, while three posted double-digit percentage losses:

The four best performing stocks were all MSOs, including Harvest Health and Recreation (CSE: HARV) (OTC: HRVSF), Cresco Labs (CSE: CL) (OTC: CRLBF), Green Thumb Industries (CSE: GTII) (OTC: GTBIF) and TerrAscend (CSE: TER) (OTC: TRSSF). Harvest, which lost more than 60% in March when it announced a capital raise and the abandonment of the pending acquisition of Verano Holdings, recovered some of its losses. The company inked a deal to sell up to 13 California dispensaries for up to $80 million, mainly in stock, to Hightimes Holding Corp, which seems to have sparked the stock. Early in the month, the company reported its Q4 financials. Cresco Labs, which along with GTI, is one of the major operators in both Illinois and Pennsylvania, reported its financials late in the month and provided revenue guidance on its conference call for Q1 at $61 million. It also abandoned the acquisition of Tryke. GTI rallied to recover all of its February losses, posting no major news releases during the month. TerrAscend reported solid growth in its MSO operations and challenges in its Canadian LP operations during Q4 and hosted its first quarterly conference call ever with new CEO Jason Ackerman. The company also pre-announced strong revenue growth in Q1.

The four worst performing stocks included some of the better performing ones in March. Two companies backed by Gotham Green Partners posted the worst performance, including iAnthus Capital (CSE: IAN) (OTC: ITHUF), which defaulted on its debt and saw its CEO exit, and MedMen (CSE: MMEN) (OTC: MMNFF), which was a top relative performer in March. CV Sciences (OTC: CVSI), also one of the best performers in March, reported favorable news regarding a patent it had filed. It also disclosed that it received a Paycheck Protection Program loan. Acreage Holdings (CSE: ACRG) (OTC: ACRGF) was one of the worst performers for the second month in a row and has declined 62% this year. Due to the COVID-19 crisis, the company has delayed filing its audited 2019 financials. Early in the month, it announced management changes and a retrenchment across multiple markets.

For May, the number of names in the index will will decrease to 14 with the departures of iAnthus and Medmen, both of which fell below the minimum price required for inclusion, and the return of TILT Holdings (CSE: TILT) (OTC: TLTFF).

In the next monthly review, we will summarize the performance for May 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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