May Was Rough On All Cannabis Sectors

As we described in a previous article, the Global Cannabis Stock Index sank in May, falling 14.6%. It is now up 44.4% in 2024.

In this article, we summarize the performance of the other managed indices that New Cannabis Ventures offers to its readers. We discuss the performance of the American Cannabis Operator Index, Ancillary Cannabis Index and Canadian Cannabis LP Index. The index that had been the strongest since the DEA was asked by the Department of Health & Human Services in late August to reschedule cannabis has been very volatile since then. This month, two indices plunged and one fell modestly.

American Cannabis Stocks Index

The American Cannabis Operator Index was quite strong in January after declining in December, but it plunged in February and then rallied in March and April. In May, it fell 29.3% to 17.23 :

In 2023, the index rallied 7.6%  to 15.34 despite the overall weakness in cannabis stocks, and a late January close was the highest close in over a year, but the close in April was higher. In 2024, this index is now up 12.3%:

The index, which launched in October 2018, made an all-time low in August before soaring. It is still down a lot from when it launched:

The worst performing MSO in May was Cannabist (OTC: CBSTF) (NEO: CBST), which lost 40.3%. Cresco Labs (OTC: CRLBF) (CSE: CL) was the strongest stock falling 23.0%%.

In June, the index will have 13 members, with Grown Rogue (OTC: GRUSF) (CSE: GRIN) joining.

Ancillary Cannabis Index

The Ancillary Cannabis Index was very strong in March but fell slightly in April. In May, it declined 2.6% to 14.65:

After a massive loss of 76.6% in 2022, it declined 10.9% in 2023 to 13.38, which was better than the Global Cannabis Stock Index. It is up 9.5% in 2024:

The index is down over 85% since launching at the end of March in 2021:

The best performing stock in the index in May was Turning Point Brands (NYSE: TPB), gaining 13.8%. It was also the strongest in April. The worst stock was WM Technology (NASDAQ: MAPS), declining 21.8%.

In June, the index will have seven members as WM Technology departs.

Canadian Cannabis LP Index

The Canadian Cannabis LP Index exploded higher in April from an all-time low set at the end of March. In May, it plunged 19.9% to 65.91:

The index, which fell 62.8% in 2022, was down 16.2% in 2023 to 60.85, and it is up 8.3% in 2024:

The LP index is down a lot from its peak, which hit more than 5 years ago in early 2018. :

The Canadian LPs trade mainly below C$1, with just five of the stocks having a higher price at the end of May. 2 of the 10 stocks in the index closed below C$0.25. During May, Aurora Cannabis (TSX: ACB) (NASDAQ: ACB) dropped 33.4%. Canopy Growth (TSX: WEED) (NASDAQ: CGC) plunged 43.3%. Cronos Group (TSX: CRON) (NASDAQ: CRON) lost 12.6%. Organigram (TSX: OGI) (NASDAQ: OGI) fell 19.9%. Tilray Brands (TSX: TLRY) (NASDAQ: TLRY) experienced a 28.4% loss.

In June, the index will have nine members, as 1 name that traded below $0.10 on 5/29 has been removed.

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 third 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. Afterwards, 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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