Ancillary Cannabis Stocks Drop 8% in October

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 continued to outpace the overall market in October, falling 8.0% to 77.05, slightly better than the 8.8% decline in the New Cannabis Ventures Global Cannabis Stock Index:

The index has declined 23.0% since its introduction at the end of March compared to the decline of 34.4% 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. Additionally, members of the index must generate at least $1 million per quarter from its ancillary operations.

During October, the index included 15 members, with 1 posting a double-digit gain and 8 declining by more than 10%, with a median return of -9.5%:

The three strongest stocks included REITs Innovative Industrial Properties (NYSE: IIPR), AFC Gamma (NASDAQ: AFCG) and NewLake Capital Partners (OTC: NLCP). IIPR is now up nearly 44% in 2021. Both AFC Gamma and NewLake Capital Partners trade above their IPO prices from earlier this year.

The three weakest names during October included Greenlane (NASDAQ: GNLN), Turning Point Brands (NYSE: TPB) and iPower (NASDAQ: IPW). Greenlane has lost 57% in 2021, while Turning Point Brands, which reported a disappointing Q3, has lost more than 14%. iPower ended the month 36% below its May $5 IPO price.

For November, we are raising the minimum daily trading volume from $500K to $1 million, which will leave the index at 12 after the removals of Forian (NASDAQ: FORA), iPower (NASDAQ: IPW) and Newlake Capital Partners.

In the next monthly review, we will summarize the performance for November 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.

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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