Cannabis Stocks Jump 9% in July to Extend Q2 Gains

Cannabis stocks recovered nearly all of the losses from June during July, with the Global Cannabis Stock Index increasing 9.0% to 32.07:

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 24.0% 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 89.2% higher but still down over 82% from its early 2018 closing high at 180.02:

The strongest 4 names in July increased by at least 38%:

Planet 13 and cbdMD were the two best performers in June as well, with both moving well into the green year-to-date during July. Planet 13 has gained more than 43% in 2020. During July, it extended its self-manufactured production and also announced a deal to acquire an additional cultivation and production facility in Las Vegas. cbdMD is up 46% in 2020, and there was little material news during July, when it substantially outperformed other CBD marketers. Curaleaf, which is up almost 34% this year, closed the Grassroots Cannabis acquisition during the month and also completed an upsized private placement of its stock. Cresco Labs, which has outperformed the index in 2020 but is still down 17%, opened its largest retail store to date in Illinois, located close to the Wisconsin border in South Beloit.

The 4 weakest names fell by more than 21% in July:

  • Mydecine Innovations Group (CSE: MYCO) (OTC: MYCOF): -28.7%
  • Sundial Growers (NASDAQ: SNDL): -26.9%
  • Akerna (NASDAQ: KERN): -25.8%
  • Organigram (TSX: OGI) (NASDAQ: OGI): -21.2%

Mydecine, which was previously New Age Farm, then New Age Brands and, most recently, NewLeaf Brands, ran up prior to July, when it qualified to join the index after pivoting into psychedelics. The company, which has maintained its CBD business, generated only C$4575 in revenue in Q1, ending the quarter with a cash balance of less than C$8K. Sundial Growers, like several of the larger LPs, was under pressure during the month, but it provided no news updates. In June, it sold a non-cannabis asset and restructured its credit agreements. Sundial has dropped more than 80% in 2020 and more than 95% since its $13 IPO a year ago. Akerna had performed well in the first half of the year but sold off sharply in July. Early in the month, it replaced its CTO. It also closed the acquisition of Ample Organics and exercised its option to acquire the balance of solo sciences. The stock, while down 22.5% in 2020, has slightly outperformed the index. Organigram’s fiscal Q3 report disappointed investors as revenue slipped and the company wrote down inventory and the value of some of its production facility. The stock is down nearly 50% in 2020.

We have also published separate reviews of the performance of the Canadian LP Index and the American Cannabis Operators Index:

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.

Get ahead of the crowd by signing up for 420 Investor, the largest & most comprehensive premium subscription service for cannabis traders and investors since 2013.

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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