Tracking Canadian Cannabis Licensed Producer Stock Performance

The market for publicly-traded Canadian licensed producers (LPs) of cannabis has become one of the most important ones for the global cannabis industry. 14 of the 28 companies collectively raised over C$1.2 billion in January alone, and the top three names in terms of market cap, Aphria (TSX: APH) (OTC: APHQF), Aurora Cannabis (TSX: ACB) (OTC: ACBFF) and Canopy Growth (TSX: WEED) (OTC: TWMJF) have seen combined daily trading value exceed C$1 billion several times in recent weeks.

Several of the companies are generating substantial revenue as shown in the Public Cannabis Company Revenue Tracker, and many are deeply involved in geographies outside of Canada, including Australia, Latin America, Germany and other European countries. New Cannabis Ventures, which has been providing extensive coverage of the Canadian cannabis industry since inception, recently introduced a family of indices designed to help our readers track this important market.

Canadian Cannabis LP Index

The Canadian Cannabis LP Index includes all publicly-traded LPs, with each member having an equal weight at the time of the index is rebalanced at the end of each month. The index data goes back to the beginning of 2016, and the current index value represents an 855% increase in just over two years:

We have also created three sub-indices to help readers dig a little deeper into the movements within the sector, as not all stocks move in unison. In January, for instance, the overall index was driven by three big gainers. The index rose 17.7%, but the median return was 5.7%:

Tier 1

The Canadian Cannabis LP Tier 1 Index is designed to track the market leaders and currently includes the 6 LPs that are generating sales in excess of $4 million per quarter.

Tier 2

The Canadian Cannabis LP Tier 2 Index is designed to capture the performance of those companies that are currently able to sell cannabis but that have sales that are below the level of the market leaders, a group that currently includes 14 LPs.

Tier 3

The remaining 8 LPs are included in the  Canadian Cannabis LP Tier 3 Index, which tracks companies newly approved for cultivation but not yet permitted to sell.

Readers are able to look at  performance on a 15-minute delay for the day or the past five days or to evaluate each of the indices over longer time-frames. Each index we publish includes the name and trading symbols of each constituent as well as the methodology for the index.

For those wishing to track the broader market, we continue to offer the renamed Global Cannabis Stock Index, which tracks now 75 companies that meet the criteria of having a significant exposure to the cannabis industry and other quantitative measures. This index is rebalanced quarterly, with the last update having taken place at year-end. At month-end, Canadian companies represented 56% of the index value, while Australian companies accounted for 6%. The remaining companies with primary listings in the United States accounted for 38% of the index.

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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