Global Cannabis Stock Index Declines 26.7% in February

Cannabis stocks, as measured by the Global Cannabis Stock Index,  plunged in February, more than reversing out the 10.7% gains in January by falling 26.7% to 115.33:

The index, which went through its last quarterly rebalancing at the end of 2017 and has 75 members that were equally weighted at the time, declined 18.8% in the first two months of the year. Despite the losses, the index is still up almost 103% since late October.

We have previously discussed the weakness in Canadian licensed producers, which comprised approximately 27% of the index at month-end. Canadian stocks in aggregate represented almost 58% of the index, with Australian stocks representing almost 7%.

Only two stocks posted positive returns in February, including Cronos Group (TSXV: MJN) (NASDAQ: CRON), which rallied sharply late in the month following news it would be uplisting to the NASDAQ to post a 24.7% gain for the U.S. ticker.  Zelda Therapeutics (ASX: ZLD) (OTC: ZLDAF) gained 4%. 24 of the companies lost 1/3 or more of their value. Of these, ABcann Global (TSXV: ABCN) (OTC: ABCCF), GrowGeneration (OTC: GRWG), iAnthus Capital (CSE: IAN) (OTC: ITHUF), Kush Bottles (OTC: KSHB) and Maple Leaf Green World (TSXV: MGW) (OTC: MGWFF) were able to maintain a positive return so far in 2018.

Looking at the year-to-date performance, 13 names have posted positive returns, while 11 companies have lost more than half their value. The median return of the 75 names has been -27.1%.

Cannabis stocks ran into a wall early in the year after a big rally in advance of California legalizing when Attorney General Jeff Sessions rescinded the Cole Memorandum, throwing some uncertainty regarding potential federal enforcement of the Controlled Substances Act. The weakness in February coincided with the big decline in the broader market early in the month as well as the slight delay in the implementation of legal adult-use cannabis in Canada.

In the next monthly review, we will summarize the index performance and discuss the new additions and the stocks removed. You can learn more about the index members and the qualifications for inclusion by visiting the Global Cannabis Stock Index. Be sure to bookmark the page to stay current on cannabis 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

Get Our Sunday Newsletter