Ancillary Cannabis Index Declines 7% in December

Following up on our discussion earlier this year about how cannabis investors have embraced publicly traded ancillary companies, New Cannabis Ventures launched its seventh proprietary index, the Ancillary Cannabis Index, at the end of March.

The index has outpaced the overall market since the launch, and in December it fell less than than the New Cannabis Ventures Global Cannabis Stock Index, declining 6.7% to 64.27, much better than the 11.6% decline in the Global Cannabis Stock Index:

The index has declined 35.7% since its introduction at the end of March compared to the decline of 44.5% in the Global Cannabis Stock Index:

The Ancillary Cannabis Index includes companies that provide goods and services to cannabis operators. Initially, each qualifying company was required to trade at a minimum of $0.50 per share with a minimum average daily trading value of $500K at the time the index is rebalanced each month. At the end of October, we raised the minimum average daily trading value to $1 million. Additionally, members of the index must generate at least $1 million per quarter from its ancillary operations.

During December, the index included 12 members, with 2 posting double-digit gains and 2 declining by more than 20%, with a median return of -7.4%:

The three strongest stocks included Power REIT (NYSE American: PW), which was also the strongest last month, Scotts Miracle-Gro (NYSE: SMG) and urban-gro (NASDAQ: UGRO). Power REIT was up 156% in 2021, while urban-gro gained 73%. Scotts Miracle-Gro dropped 19%.

The three weakest names during November included Agrify (NASDAQ: AGFY), Akerna (NASDAQ: KERN) and GrowGeneration (NASDAQ: GRWG), which was among the worst performers in November as well. Agrify ended 8% below its IPO price from earlier this year. GrowGeneration fell 68% this year, while Akerna dropped 46%.

For January, we have added Chicago Atlantic Real Estate Finance (NASDAQ: REFI) and iPower (NASDAQ: IPW), expanding the index to 14 members.

In the next monthly review, we will summarize the performance for January and discuss any additions or deletions. Be sure to bookmark the page to stay current on ancillary cannabis company 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 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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