You’re reading 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. We no longer send these by email as we did in the past, but we post this and all of the newsletters on our website here.
Friends,
By many measures, cannabis stocks are extremely cheap. Even with the big rally in April, the New Cannabis Ventures Global Cannabis Stock Index has declined 18.5% in 2025. Some companies are repurchasing shares, which is usually a good sign for outside investors to consider getting on board.
In December, Ascend Wellness repurchased 11 million shares for $2.75 million. This represented 5% of its shares outstanding. Later that same month, it authorized a new share buyback program. The company reports on 5/12 and perhaps we will learn that it repurchased more. I follow the company closely and do not include any in my model portfolio at 420 Investor at this time, though the stock seems very cheap to me. What troubles me is that the balance sheet is very strained, with lots of debt and negative tangible equity.
Green Thumb Industries started earlier than Ascend, and it repurchased 3.97 million shares in 2024, paying as high as $12.71 in March and as low at $7.66 in December. The average purchase price was $10.85. Despite the huge rally yesterday, the stock trades at a 39% discount to the purchase price that totaled $43 million. GTI has a stronger balance sheet than its large peers, but it still has net debt, and MSOS owns a lot of its shares. My model portfolio, which is very light in MSOs, does not include any of them.
Today, SNDL, a company that I don’t follow closely at this time, announced that it paid $1.79 during Q1 for 5.8 million shares. This was about C$15 million and represented over 2% of the shares outstanding. While SNDL has a stronger balance sheet than the two MSOs (C$221 million in cash and no debt), it is making a choice between further acquisitions or its own stock. SNDL closed 17% below the level where it repurchased its shares.
The three stocks I discussed have had mixed performances, with one up and only one down more than the Global Cannabis Stock Index:
Most cannabis companies are in no position to repurchase shares due to their balance sheets. Of course, if 280E taxation goes away, things will change. The markets got very excited yesterday by the statement from the incoming DEA Administrator Terry Cole. Tom Angell’s Marijuana Moment ran an article that properly questioned exactly what Cole’s words meant.
I am all for cannabis legalization, but that’s not happening in the near-term here in the U.S. Investors need to be careful about sensing positives from companies that repurchase their shares in my view.
Sincerely,
Alan
New Cannabis Ventures publishes curated articles as well as exclusive news. Here is what we published this past week:
Exclusives
Big Cannabis Companies Are Set to Report Q1 Financials
Cannabis Stocks Bounce Higher in April
Financial Reports
Hawthorne Gardening Revenue Plunges
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