Overcoming pressure on Canadian LPs and CBD companies with very strong performance from American cannabis operators, the Global Cannabis Stock Index extended July gains during August by increasing 2.1% in choppy trading to 32.74:
The index, which had 37 qualifying members during the month following the quarterly rebalancing at the end of June, declined 34.1% in 2019 to 42.20 and is now down 22.4% in 2020:
After posting an all-time closing low of 16.95 set on March 18th, the index has rallied sharply to end the month 93.2% higher but still down over 81% from its early 2018 closing high at 180.02:
The strongest 4 names in August increased by at least 19%:
- GrowGeneration (NASDAQ: GRWG): +89.1%
- Trulieve (CSE: TRUL) (OTC: TCNNF): +40.7%
- Planet 13 Holdings (CSE: PLTH) (OTC: PLNHF): +24.9%
- Cresco Labs (CSE: CL) (OTC: CLRBF): +19.7%
GrowGeneration, which sold $48 million of stock in a public offering at $5.60 in late June, soared to an all-time high of$22.88 before closing the month at $15.955. The company beat analyst forecasts for Q2 and provided strong guidance for the balance of the year and 2022. The stock, which trade over $1 billion in value on its most active day, nearly its market cap, was aided by two analyst initiations during the month and an appearance on Jim Cramer’s Mad Money. The weakness late in the month was spurred by a short-report from Hindenburg Research as well as disclosure of large sales of stock by insiders. GrowGen is up 293% in 2020. Trulieve also beat analyst forecasts and upped guidance, pushing the stock to close up 93% year-to-date. Rumors of a potential merger with another leading MSO appear to have boosted the stock as well.
Planet 13, one of the strongest performers in July, tacked on additional gains during August and is up 79% this year thus far. The company reported its Q2 financials after the close on August 31st . Planet 13 has been impacted by the reduction in Las Vegas tourism, but it has quickly adapted its business to serve locals. The company priced its second recent equity offering in late August. Cresco Labs, also one of the top performers in July, reported a stronger-than-expected Q2 in terms of revenue and adjusted EBITDA, supported by continued strength in Pennsylvania and Illinois, where it has been opening additional dispensaries. The company reported sequential growth in excess of 30% in all of its markets except Massachusetts, which was impacted by mandated closure for adult-use sales. Cresco is down 1% year-to-date.
The 4 weakest names fell by more than 21% in August:
- Sundial Growers (NASDAQ: SNDL): -41.8%
- 22nd Century Group (NYSE American: XXII): -25.5%
- cbdMD (NYSE American: YCBD): -25.2%
- Power REIT (NYSE: PW): -21.6%
Sundial moved to an all-time low following an aggressive equity offering and a public disclosure that it is seeking strategic alternatives. Its stock is down 89% in 2020. 22nd Century Group, which is down 46% year-to-date, is more leveraged to tobacco than cannabis, where it is focused on technologies to alter cannabinoid levels. cbdMD, one of last month’s strongest performers, gave up gains despite a strong financial report for its fiscal Q3. The stock is up 9% year-to-date. Power REIT also seemed to be suffering from profit-taking, as it remains up 126% this year.
We have also published separate reviews of the performance of the Canadian LP Index and the American Cannabis Operators Index:
- Canadian LPs Continue to Lag American Cannabis Stocks in August with 7% Decline
- MSO Strength Drives American Cannabis Operator Index 16% Higher in August
We will summarize the index performance again in a month. You can learn more about the index members and the qualifications for inclusion by visiting the Global Cannabis Stock Index. A more complete analysis of the index is available at 420Investor.com. Be sure to bookmark the page to stay current on cannabis stock price movements within the day or from day-to-day.
New Cannabis Ventures maintains six proprietary indices designed to help investors monitor the publicly-traded cannabis stocks, including the Global Cannabis Stock Index as well as the Canadian Cannabis LP Index and its three sub-indices. The sixth index, the American Cannabis Operator Index, was launched at the end of October 2018 and tracks the leading cultivators, processors and retailers of cannabis in the United States.