Cheap But Getting Cheaper

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The cannabis sector started the year strongly, but we pointed to two troubling issues that were concerning us: low trading volume and liquidations of a popular ETF after the first full week. The New Cannabis Ventures Global Cannabis Stock Index rallied more than 10% in January, but it ended the quarter down 12.5% after declining in both February and in March.

Trading volumes remain very low, reflecting a lack of buy interest in our view. In early January, we pointed out that only 7 names traded more than $5 million in trading value the first Friday of 2023, significantly lower than in 2021 and 2022. The last Friday of Q1 saw just five names hit this threshold. Our quarterly rebalancing of the index resulted in three of the largest MSOs being removed due to their failure to meet the minimum trading value. Now only the very largest 5 will be in there.

Speaking of MSOs, the ETF that concerned us because of the redemptions it was facing is focused on MSOs, AdvisorShares Pure US Cannabis ETF. We pointed out in early January that the number of shares had declined 8.9% from mid-December. It has now declined 13.2% to 59.665 million shares, down 5.2% year-to-date. The ETF has performed very poorly, closing at an all-time low and dropping 18.6% in Q1:

Despite the bargain price, trading volumes remain very low. The ETF remains highly exposed to the 5 largest MSOs, holding 78.8% of the fund in them. Further redemptions will lead to selling pressure on the largest holdings, particularly the top two, Green Thumb Industries and Curaleaf, which comprise over 44% of the ETF.

We remain optimistic about cannabis stocks longer-term, as we think the industry should advance and see the stocks as very attractively valued. The weak start to 2023, though, is troubling, especially in light of stocks in general rallying during Q1.

Most of the large cannabis companies have already reported their earnings, but there are still some who haven’t! Stay up to do date with how cannabis companies rank against each other with the most accurate revenue and income tracker specifically made for the industry. 

New Cannabis Ventures publishes curated articles as well as exclusive news. Here is some of the most interesting business content from this week:


Auxly revenue rose 13% year-over-year to $94.4 million in 2022, an increase of $10.6 million. For Q4, the company reported revenue of $24.7 million, approximately $4.6 million lower than the same period in 2021. However it was up $4.9 million or 24% sequentially. The company adapted its strategy in Q3 by focusing on the three largest Canadian product categories of dried flower, pre-rolls, and vapes and leveraging its large-scale facility in Leamington to deepen its competitive advantage and refine its cost structure. “Our efforts have yielded positive results, including our first significant wholesales of bulk dried flower from Auxly Leamington, improved net revenues and blended margins, and reductions in SG&A during the fourth quarter,” said CEO Hugo Alves.

Columbia Care Q4 revenue slipped 5% to $126.2 million sequentially. However, it was up 11% to $511.6 million from $460 million year-over-year. During the reporting period, the company opened two retail locations in Virginia, but also closed one unprofitable retail location in Colorado. “Our strategic position in the fastest growing markets in the country continues to drive revenue and earnings growth, as we see an increasing contribution from markets such as New Jersey and Virginia,” said CEO Nicholas Vita.

4Front Ventures Q4 GAAP revenue was $31.6 million, up 11% from Q4 2021 and down 3% compared to prior quarter. The company said it achieved positive operational cash flow as of March, driven by financial discipline, an optimized supply chain, strong cash flow management and operational achievements. “Despite the challenging and unpredictable operating environment for cannabis in 2022, I could not be prouder of our team for remaining focused on controlling what we could control,” said CEO Leo Gontmakher. “We left the year with a stronger balance sheet, a highly experienced management team, and enhanced operating assets to drive significant shareholder value over the next 12 months.”

Fire & Flower Q4 revenue was $30.5 million, down 30% sequentially. The shortfall was the result of a quarter that lasted just nine weeks, compared to the previous quarter which was 13 weeks. For the full fiscal year, the company reported revenue of $156 million, down from $175.5 million in the previous fiscal year, which included an additional two weeks. “2022 was a turnaround year for Fire & Flower, represented by three consecutive quarters of same store sales and gross margin growth. We look to 2023 as a transformative year where we anticipate achieving positive adjusted EBITDA during the first half of the fiscal year through a disciplined approach to our core retail business, driving top line revenue, gross profit dollars and reducing our overhead expenses,” said CEO Stéphane Trudel.

Jushi Holdings Q4 revenue was $76.8 million, an increase of 17% year-over-year and 5.5% sequentially. Full-year revenue was $284.3 million, an increase of 36% year-over-year. “Jushi experienced many bright spots over the course of the year, including rapidly growing our retail network across six markets and diversifying our house of brands and product suite,” said Chairman, Founder and CEO Jim Cacioppo. “Looking ahead, we have shifted our attention from rapidly expanding our operations to focusing our efforts on efficiency optimization and cost-saving initiatives across all facets of our business.”

Nova Cannabis attributed its disciplined pricing strategy and private label initiatives to its record Q4 revenue of $61.4 million, a 29% increase from the fourth quarter of 2021, and a 4% increase from the third quarter of 2022. For the full year, the company reported revenue of $226.4 million, a 69% increase from $134.4 million in 2021. “Our revenue growth is accompanied by gross margin growth, as we’ve started to adjust pricing in certain areas where the competitive pressures have waned,” said CEO Marcie Kiziak. “This, along with growing revenues from data analytics licensing and the successful launch of our private label products in partnership with SNDL, gives us levers to drive future gross margin growth as we capture greater market share, further validating our strategy.”

Schwazze reported 2022 revenue of $159.4 million, up 47% compared to $108.4 million in 2021. For the fourth quarter, the company reported revenue of $40.1 million, an increase of 51% compared to $26.5 million in Q4 2021. Revenue fell 7% sequentially. In 2022, the company completed seven acquisitions and opened six additional stores not related to acquisitions, which increased the company’s retail presence from 18 dispensaries as of December 31, 2021 to 41 dispensaries as of December 31, 2022. The company now has five operating cultivation facilities and two manufacturing assets in Colorado and New Mexico. “Schwazze is well-positioned to play offense in this challenging environment. As market forces become more favorable, we believe Schwazze will emerge with a much stronger position which will reward shareholders. For now, we will keep executing our strategy and playbook,” said CEO Justin Dye.

The Parent Company Q4 revenue rose 2% sequentially to $20 million from $19.6 million. Revenue fell 19% from the same quarter last year. The company implemented numerous strategic initiatives to build a foundation for growth and accelerate its pathway to profitability, while preserving the strength of its balance sheet. “We operate in one of the most dynamic and exciting cannabis markets in the world and we must remain nimble and pivot where appropriate to create a more efficient and simplified business to remain competitive,” said CEO Troy Datcher.

Verano Q4 revenue increased 7% year-over-year to $226 million, but also slipped 1% compared to the prior quarter. For the full year, the company reported record revenue of $879 million, a 19% year-over-year increase. “Since the end of 2021, we grew our retail footprint by adding more than 30 dispensaries across multiple core markets, significantly expanded our brand portfolio by launching a number of differentiated products that cater to a variety of consumers, celebrated the launch of adult use sales across our East Coast footprint in New Jersey and Connecticut, refinanced debt in a rising rate environment to include optionality, and made strategic investments to drive greater efficiencies across the business,” said George Archos, founder, chairman and CEO.


Curaleaf Holdings entered into a definitive agreement to acquire Deseret Wellness, the largest cannabis retail operator in Utah, in a cash and stock transaction valued at approximately $20 million. The deal includes three retail dispensaries with a combined annualized revenue run rate of $14 million. At the close of the deal, Curaleaf’s retail footprint will increase to four dispensaries in Utah and 150 nationwide. “This deal represents the largest cannabis retail change of ownership in the state’s history and bolsters our strong position in the market with an attractive portfolio of retail assets,” said Executive Chairman Boris Jordan.


AYR Wellness is getting out of the cannabis business in Arizona. The company, which recently announced it was expanding its Florida footprint also said it’s divesting of its Arizona assets. AYR sold Blue Camo, LLC to AZ Goat AZ, LLC, a group consisting primarily of the former owners of Blue Camo, who sold the business to AYR in Q1 2021. The sale includes two licensed entities operating three Oasis-branded dispensaries, a 10,000 sq. ft. cultivation and processing facility, an 80,000 sq. ft. cultivation facility, and AYR’s majority interest in Willcox OC, LLC, a joint venture developing an outdoor cultivation facility. “This transaction strengthens our balance sheet by adding cash and reducing net debt and long-term operating leases by approximately $55 million, while improving our working capital position,” said President and CEO David Goubert.


Safe Harbor Financial entered into an agreement with Colorado Credit Union, the company’s largest stockholder, to resolve approximately $64.7 million in total payment obligations owed from the September 28, 2022 business combination in exchange for a 5-year, $14.5 million senior secured note bearing a 4.25% annual interest rate and issuance of 11.2 million shares of Class A common stock in the company. The company said the deal removes previous financial constraints on its business, enabling it to service its current portion of all its long-term debt while better positioning Safe Harbor to pursue a variety of growth opportunities. “We believe this agreement reflects our strategic partner’s confidence in our ability to execute our long-term growth plans and build shareholder value,” said CEO Sundie Seefried.

Greentank Technologies closed a $16.5 million Series B financing round, inclusive of a $14.5 million equity investment led by a strategic investor group with more than 15 years of manufacturing experience and Organigram Holdings Inc., a cannabis producer. An additional $2 million of debt financing was provided by existing shareholders. This latest round will fuel the commercialization of Greentank’s proprietary technology, which is expected to launch later this year and serve multiple markets beyond cannabis. “We have spent the last three years investing significantly in R&D and building out our talent and knowledge of material science, with a primary focus on creating a new generation of heating element,” said Co-founder and COO Corey Koffler.

To get real-time updates download our free mobile app for Android or Apple devices, like our Facebook page, or follow Alan on Twitter. Share and discover industry news with like-minded people on the largest cannabis investor and entrepreneur group on LinkedIn.

Use the suite of professionally managed NCV Cannabis Stock Indices to monitor the performance of publicly-traded cannabis companies within the day or over longer time-frames. In addition to the comprehensive Global Cannabis Stock Index, we offer a family of indices to track Canadian licensed producers as well as the American Cannabis Operator Index and the Ancillary Cannabis Index.

View the Public Cannabis Company Revenue & Income Tracker, which ranks the top revenue producing cannabis stocks.

Stay on top of some of the most important communications from public companies by viewing upcoming cannabis investor earnings conference calls.

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Alan & Joel

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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