Global Cannabis Stock Index Rallies in December

Cannabis stocks, as measured by the Global Cannabis Stock Index,  exploded higher in late August on news that the Department of Health and Human Services had recommended to the DEA that it move cannabis from Schedule 1 to Schedule 3, and the move continued into September. October wiped out the entire rally, and November saw the market recover some of the losses. In December, the rally continued as the index rose 4.5% to 8.11:

The end of 2022 was challenging, with the index falling 23.7% in Q3 and 13.8% in Q4, which contributed to a 70.4% decline for the full year.  In 2023, Q1 saw a 12.5% decline, and the index dropped 11.8% in Q2. The 22.3% gain in Q3 was the first positive quarter since Q1 of 2021, and Q4 saw it lose 11.6%. With the December gain, the index ended the year down 16.5%:

Since the peak in February 2021, the Global Cannabis Stock Index has dropped 91.2% from the 92.48 closing high:

The strongest 4 names in December all rose by more than 20%:

The best performing names were from a variety of sub-sectors, including an MSO, a Canadian LP and two ancillaries. One of the worst stocks in November reversed in December, with Cannabist ending the year down 40.0%. Tilray ended 2023 down 14.5%. Innovative Industrial Properties and NewLake Capital, both REITs, were little changed in price during the year.

The 4 weakest names in December all fell by more than 10%:

The worst performing stock was again 22nd Century Group, which has exited the cannabis business and was down 98.7% in 2023. Cresco Labs, one of the strongest in November, ended the year down 23.8%. WM Technology was again one of the worst performers and ended the year down 28.7%.  Planet 13 rose 4.9% during 2023 despite the decline in December.

In Q1, the index will have fewer members at 21, down from 28 this past quarter. Joining it will be AYR Wellness (OTC: AYRWF) (CSE: AYR.A) and Ispire Technologies (NASDAQ: ISPR), a 2023 IPO ancillary company. Leaving, though, will be Aurora Cannabis (NASDAQ: ACB) (TSX: ACB), Akanda (NASDAQ: AKAN), Cannabist (OTC: CBSTF) (NEO: CBST), High Tide (NASDAQ: HITI) (TSXV: HITI), Hydrofarm (NASDAQ: HYFM), WM Technology (NASDAQ: MAPS), Planet 13 (OTC: PLNH) (CSE: PLTH), Village Farms (NASDAQ: VFF) and 22nd Century Group (NASDAQ: XXII), which is no longer a cannabis company but also didn’t qualify for price and volume inadequacies. All of the other removals had too low of volume except Aurora, which failed to meet the minimum price.

We will summarize the index performance again in a month and also provide the quarterly revisions to the constituents. 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.

New Cannabis Ventures maintains four 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. 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. More recently, we introduced the Ancillary Cannabis Index at the end of March 2021, reflecting the increasing number of publicly-traded companies providing goods or services to cannabis operators.

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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