American Cannabis Operator Stocks Gain 29% in Q2

After soaring nearly 35% in May, the American Cannabis Operator Index pulled back in June, decreasing 9.8% to 27.25:

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, which gained 29.2% during Q2, has now dropped 37.0% in 2020. After posting an all-time closing low on March 18th at 14.50, the index has now bounced by 87.9%:

During June, the index included 18 companies, including 15 multi-state operators (MSOs) and 3 focused solely on CBD extracted from industrial hemp. Two companies posted double-digit percentage gains, while eight declined by more than 10% during the month:

The four best performing stocks included cbdMD (NYSE American: YCBD), Planet 13 Holdings (CSE: PLTH) (OTC: PLNHF), Curaleaf Holdings (CSE: CURA) (OTC: CURLF) and 4Front (CSE: FFNT) (OTC: FFNTF). cbdMD was among the strongest performers for the second month in a row and is now down 16.8% year-to-date. The company had disclosed an acquisition bid during May, and during May its President left without explanation. Planet 13 reported Q1 financials in early June, reopened its superstore in Las Vegas and priced a $10 million equity offering. Curaleaf Holdings amended its pending acquisition of Grassroots Cannabis. 4Front reported its Q4 revenue, which grew sharply from the prior quarter.

The four worst performing stocks included iAnthus Capital (CSE: IAN) (OTC: ITHUF), Harvest Health and Recreation (CSE: HARV) (OTC: HRVSF), CV Sciences (OTC: CVSI), and Charlotte’s Web (TSX: CWEB)(OTC: CWBHF). iAnthus continued to face mounting pressure after defaulting on its debt. Harvest filed a prospectus to sell up to $300 million in securities, replaced its CFO and moved forward with an asset sale, with the company taking almost entirely stock in exchange for California cannabis dispensary licenses. CV Sciences saw its shareholders vote down a potential reverse-split that would could have enabled the company to uplist on a higher exchange. Charlotte’s Web closed its acquisition of Abacus Health Products and priced a C$77.6 million equity offering.

For July, the number of names in the index will will decrease to 16 with the removals of 4Front, which failed to meet the minimum volume requirement, and iAnthus Capital and MedMen (CSE: MMEN) (OTC: MMNFF), both of which fell below the minimum price, and the return of Vireo Health (CSE: VREO) (OTC: VREOF).

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.

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

Get Our Sunday Newsletter