Canadian cannabis stocks have gained 1% over the past month, as an index of 44 stocks with significant exposure to the cannabis sector gained $1.43 billion in market capitalization over the period.
In what was a rather sleepy month for the cannabis industry, there were several winners in the June 2017 session that are worth paying attention to. Among them is Beta Nutraceuticals (CSE: BTP), which was up 1.4% on the day (ex-News) for a gain of over $0.03. The stock has been on a tear over the last year, closing out June at a price of $0.04 and a market cap of $32 million.
Cannabis stocks gained 1% in June, mostly due to an increase in the value of the Canadian dollar.. Read more about latest aphria cannabis news and let us know what you think.The Canadian Cannabis LP Index broke a three-month losing streak in June and rose 1.2% to 359.27.
Theindex, which rose 22.1% in the fourth quarter but fell 30.1% in 2020, ends at 275.16, up 27.0% year-on-year and 30.6% in 2021 :
It remains well below its all-time closing high of 1314.33 in September 2018, just before legalization in Canada. In March 2020, it hit a new 52-week closing low of 196.10, not seen since late 2016, and closed 83.2% above that level at the end of June :
The Canadian Cannabis LP Index, which is rebalanced monthly, consisted of 39 eligible licensed producers trading on the open market in Canada at the end of May, with each share weighted equally. Note that two companies, Supreme Cannabis and Zenabis, were removed within a month of their acquisition. Each of the participants was also included in the sub-index: During the month, 4 participants were added to the Canadian Cannabis LP Tier 1 Index, 15 to the Canadian Cannabis LP Tier 2 Index and 20 to the Canadian Cannabis LP Tier 3 Index. At the end of June 2020, we amended the listing rules to require companies to have a share price of at least C$0.20 if they do not receive at least C$2.5 million per quarter from their cannabis business. Previously, shares trading below C$0.20 had to have earnings of more than C$1 million. Currently, there are about two dozen publicly traded LPs that do not qualify.
Tier 1, which includes LPs that generate at least C$25 million in cannabis-related revenue per quarter, fell 2.1% to 703.73 in April. Level 1, which fell 23.9% to 488.96 in 2020, is up 43.9% in 2021. Over time, we have increased the minimum income for admission. In early 2021, we increased it by C$20 million. In 2019 and the first half of 2020, companies had to generate more than C$10 million in revenue to be included in the program. In 2018, we used C$4 million as the threshold.
This group included Aurora Cannabis (TSX:ACB) (NASDAQ:ACB), Canopy Growth (TSX:WEED) (NASDAQ:CGC), HEXO Corp (TSX:HEXO) (NYSE:HEXO) and Tilray (TSX:TLRY) (NASDAQ:TLRY).
Among these largest LPs by revenue, HEXO Corp, last month’s topper, was the worst performer with a 16.4% loss, while Tilray gained 9.0%.
Tier 2, which includes LPs that generate between C$5 million and C$25 million in quarterly cannabis revenue, fell 5.1% to 559.67. In 2020 it loses 35.9% to close at 365.19, and in 2021 it rises 53.3%. By July 2020, businesses will have to earn more than CAD 2.5 million to be included in this scheme.
This group includes 48North (TSXV: NRTH) (OTC: NCNNF), Aleafia Health (TSX: AH) (OTC: ALEAF), Auxly (TSX: XLY) (OTC: CBWTF), Cronos Group (TSX: CRON) (NASDAQ: CRON), Decibel Cannabis (TSXV: DB) (OTC: DBCCF), Delta 9 (TSX: DN) (OTC: DLTNF), MediPharm Labs (TSX: LABS) (OTC: MEDIF), Organigram (TSX: OGI) (NASDAQ: OGI), Supreme Cannabis (TSX: FIRE) (OTC: SPRWF), The Green Organic Dutchman (CSE: TGOD) (OTC: TGODF), Valens Company (TSX: VLNS) (OTC: VLNCF), Village Farms (TSX: (NASDAQ: VFF), VIVO Cannabis (TSX: VIVO) (OTC: VVCIF), WeedMD (TSXV: WMD) (OTC: WDDMF) and Zenabis Global (TSX: ZENA) (OTC: ZBISF).
Decibel Cannabis was the best performing company for the second consecutive month, up 25.5%, while Village Farms posted an increase of nearly 15%. The worst performing company was Auxly, down 28.8%.
Tier 3, which includes 20 eligible venture capital firms with quarterly cannabis revenues of less than C$5 million, rose 6.1% and closed at 76.36. In 2020, it was 66.59, down 31.2%, and up 14.7% in 2021. Rapid Dose Therapeutics (CSE:DOSE) (OTC:RDTCF) was by far the best performer at 176.2%. BevCanna Enterprises (CSE:CNX) (OTC:BVNNF) did the worst with a 26.5% decline.
Returns within the sector varied widely, with four stocks rising by more than 20% and four falling by more than 20%. The median return for the entire group was -4.3%:
In July, the overall index will consist of 38 components and Heritage Cannabis (CSE:CANN) (OTC:HERTF) will be included in the third tier. HEXO Corp will move from Tier 1 to Tier 2 after its quarterly revenue falls below the minimum threshold of C$25 million to be included in Tier 1. Indiva (TSXV: NDVA) (OTC: NDVAF) will move from Level 3 to Level 2.
In next month’s review, we will summarize July’s accomplishments and discuss any additions or deletions. Be sure to bookmark these pages to stay up to date on LP stock price changes throughout the day or every day.
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Based in Houston, Alan draws on his experience as founder of the 420 Investor online community, the first and still largest due diligence platform focused on publicly traded stocks in the cannabis sector. Through his many connections in the cannabis community, Alan continues to find new ways to bring the industry together and promote sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Until early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent analyst and then for more than two decades in research and portfolio management. Alan is a prolific writer with over 650 articles published on Seeking Alpha since 2007, where he has 70,000 subscribers. He is a frequent speaker at industry conferences and appears regularly in the media, including the NY Times, Wall Street Journal, Fox Business and Bloomberg TV. Get in touch with Alan: Twitter | Facebook | LinkedIn | E-mail
In this section:
48North, ACB, AH, aleaf, Aleafia Health, Aurora Cannabis, auxly, Canopy Growth, cbwtf, CGC, CRON, Cronos Group, db, dbccf, decibel cannabis, Delta 9, dltnf, dn, dose, Green Organic Dutchman, Hexo, hexo corp, Labs, medif, MediPharm Labs, ncnnf, nrth, OGI, Organigram, rapid dose therapeutics, rdctf, TGOD, TGODF, Tilray, TLRY, Valens, VFF, Village Farms, vivo, vivo cannabis, vlncf, vlns, vvcif, WDDMF, WEED, weedmd, wmd, xly
The Valens Company signs contract for liquor and edibles with Gallery Brands, a leading cannabis retailer
What’s new in cannabis stocks for the week ending 25/6/21
Canopy Growth issues 9 million shares to complete acquisition of Supreme Cannabis
Australian cannabis producer buys Danish company Canopy Growth for $20 million
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