You’re reading a copy of this week’s edition of the New Cannabis Ventures weekly newsletter, which we have been publishing since October 2015. The newsletter includes unique insight to help our readers stay ahead of the curve as well as links to the week’s most important news.
After the horrible year the cannabis sector had in 2022, many had hoped for a better 2023. Well, it has been better, but it has not been good at all. The New Cannabis Ventures Global Cannabis Stock Index is down 20.5% year-to-date after the bigger decline in 2022. Since the bear market began in early 2021, the index has dropped 91.6%:
Today, we want to review the big decliners that are in the index currently. Of the 28 names that qualified at the end of September for inclusion, 8 are down more than 40%:
While not all of these should be bought by investors right now in our view, several are included in my model portfolio at 420 Investor. I have written on Seeking Alpha about each of these stocks, including Cannabist, Hydrofarm, Organigram and Village Farms. We have already warned not to buy the Canopy Growth dip.
What’s nice about this is that each of the major sub-sectors of the cannabis industry is represented in this list of big decliners, with 4 Canadian LPs, an ancillary company and an MSO. Be aware that the NASDAQ minimum price of $1 could be a problem for all of these stocks except for CBSTF, which trades on the OTC.
The bear market in cannabis stocks has been deep and has lasted for a long time. Four of the stocks that are down a lot more than the market this year look attractive to us. Remember in early March, when we shared “Down But Not Out“, Ayr Wellness was leading the way down, falling 38.4%. It is now up 79.2% in 2023. We don’t believe that stocks should be bought just because they are down, but some of these, all of which are down more than the worst return year-to-date in early March, look very appealing.
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Alan & Joel