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.
A year ago, we wrote about the cannabis market having a great week. In early October, President Biden had surprised the world with his pardoning of cannabis consumers in federal prison and by suggesting that he would order a review of the DEA scheduling of cannabis. The NCV Global Cannabis Stock Index rose 12.2% during the week off an all-time low. We said then that this could mean little for the industry, or that it could allow for uplisting to major exchanges by American cannabis companies or the end of 280E taxation. We ended that newsletter by expressing hope for the industry.
A year later, we are still in a bear market. The Global Cannabis Stock Index ended Q2 at 7.50, down 40.6% from the level where it was at the end of the first week in October a year ago of 12.63. Even now, despite the big rally since the end of Q2, it is still down 32.8% from a year ago. What a year it has been:
The two things that we think could happen and that would catalyze the market, if so, are still potentially happening: the end of 280E and the potential uplisting to the NASDAQ or NYSE by American cannabis companies. We have been monitoring the DEA potentially rescheduling cannabis, which could be very good, but we have warned that it could take a while and may not play out exactly like many seem to expect. As we said in early September, cannabis stocks may escape from hell.
And hell it has been! Cannabis stocks are now down 90.8% from the February 2021 peak. We see a lot of potential value in the sector, but the MSOs generally have a lot of risk if 280E does not go away. In late August, we suggested that investors should start to look at tangible book value as a metric for the sector during the bear market. Things changed dramatically, though, at the end of the month and into September for the MSOs.
We continue to hope that things get better, but we are not sure that they will real soon. If 280E does not vanish, the American operators will struggle. Already capital raises are crushing the issuers, and it’s just beginning. Hopefully, taxation changes and investors regain the optimism from late 2020. Just because we want the bear market to be over doesn’t make it end.
Like this newsletter? Sign up, and you will receive a free copy by email each Sunday morning. Each week, we share the top stories and write an original perspective as well.
New Cannabis Ventures publishes curated articles as well as exclusive news. Here is some of the most interesting business content from this week:
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 the Canadian Cannabis LP Index, 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.
Discover upcoming new listings with the curated Cannabis Stock IPOs and New Issues Tracker.
Alan & Joel