Stocks of American Cannabis Operators Outpace Overall Market With 20.5% Gain in February

The American Cannabis Operator Index moved higher for the fifth consecutive month in February, advancing 20.5% to 93.70:

After gaining 45.7% in 2020, when it ended at 63.05, the index is up 48.6% in 2021 and has rebounded 546.2% from an all-time closing low on March 18th at 14.50:

The index, which launched at the end of October 2018 with a value of 100, reached a closing high of 124.16 a week later before declining to 70.64 in late December 2018. It then rallied as high as 119.53 in early April 2019 before selling off over the balance of the year and into March 2020:

During February, the index included 34 companies, including 31 multi-state operators (MSOs) and 3 focused solely on CBD extracted from industrial hemp. Five companies posted returns in excess of 40%, while four declined during the month:

The four best performing stocks in January included Indus Holdings (CSE: INDS) (OTC: INDXF), Red White & Bloom Brands (CSE: RWB) (OTC: RWBYF), 4Front Ventures (CSE: FFNT) (OTC: FFNTF) and Terra Tech (OTC: TRTC). Indus Holdings, which will be changing its name shortly to Lowell Farms to reflect the acquisition, acquired California cannabis operator Lowell Herb Co. for $39 million. The stock, which had declined modestly in January, is now up 68.4% year-to-date. Red White & Bloom raised $6.1 million through a private placement convertible note and also raised $8 million through warrant exercises and $7 million through the sale of debentures with warrants to fund a pending acquisition in Illinois. The company expanded the Platinum brand to Arizona and also entered Florida with the pending acquisition of the operations of Acreage Holdings for $60 million. 4Front announced the departure of its CFO but had no news otherwise. Similarly, there were no news released by Terra Tech during the month.

The four worst performing stocks included Vext Science (CSE: VEXT) (OTC: VEXTF), Body and Mind (CSE: BAMM) (OTC: BMMJ) Cansortium (CSE: TIUM.U) (OTC: CNTMF) and Schwazze (OTC: SHWZ). Vext Science closed a C$20.7 million sale of units during the month. Body and Mind reported its fiscal Q1 financials, which showed strong growth, but the stock was hit perhaps by sales made by outside investor Australis Capital. Cansortium fell for the second consecutive month, perhaps a reflection of disappointment from investors after seeing some of its Florida competitors be acquired. The company amended it convertible notes, extending the maturity by almost two years but also sharply reducing the conversion price. Schwazze, which was one of the strongest performers in January, repriced all of its options lower during the month. It also acquired two additional Star Buds dispensaries in Colorado for $9.3 million in cash, debt and preferred shares.

For March, the index will continue to include 34 stocks, with Liberty Health Sciences exiting following its acquisition by Ayr Wellness (CSE: AYR.A) (OTC: AYRWF) and Medmen (CSE: MMEN) (OTC: MMNFF) rejoining.

In the next monthly review, we will summarize the performance for March and discuss any additions or deletions. Be sure to bookmark the page to stay current on American cannabis operators stock price movements within the day or from day-to-day.

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Exclusive article by Alan Brochstein, CFA
Alan Brochstein, CFA
Based in Houston, Alan leverages his experience as founder of online communities 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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