Canadian Weed Stocks Will Double Again
Subsequently retreating virtually 27% in Q3, the Canadian Cannabis LP Index extended its losing streak to five months equally it savage once more in November, declining five.5.% to 225.26:
The alphabetize, which fell 30.1% in 2020 to end at 275.16, is downwardly 22% over the by twelvemonth and downward 18.1% year-to-date in 2021:
It remains substantially below the all-time closing high of 1314.33 in September 2018, just ahead of Canadian adult-employ legalization. In March 2020, it posted a new 52-week closing low of 196.10, a level not seen since late 2016, and it airtight 14.ix% above that level at the terminate of Nov:
The Canadian Cannabis LP Alphabetize, which is rebalanced monthly, included 39 qualifying publicly traded licensed producers that traded in Canada at the stop of October, with equal weighting for each stock. During the month, Citizen Stash was removed when information technology was acquired. Each of the members was too included in a sub-alphabetize, with iv in the Canadian Cannabis LP Tier 1 Index, 15 in the Canadian Cannabis LP Tier 2 Alphabetize and 20 in the Canadian Cannabis LP Tier 3 Index during the month. At the end of June 2020, we revised the rules for inclusion, requiring companies to have a price of at to the lowest degree C$0.20 unless they are generating at least C$two.5 million quarterly from their cannabis product operation. Previously, nosotros required acquirement in excess of C$1 million for stocks trading beneath C$0.xx. In that location are currently more than than a dozen publicly traded LPs that fail to qualify.
Tier 1
Tier i, which included the LPs that are generating cannabis-related sales of at to the lowest degree C$25 million per quarter, fell5.1% to 402.42 in November. Tier 1, which dropped 23.9% in 2020 when information technology ended at 488.96, has declined 17.7% in 2021. We have increased the minimum revenue required to be included over time. At the beginning of 2021, we raised it from C$20 meg. During 2019 and the first half of 2020, companies needed to generate revenue in excess of C$10 million for inclusion. In 2018, we used C$four million every bit the hurdle.
This group included Aurora Cannabis (TSX: ACB) (NASDAQ: ACB), Canopy Growth (TSX: WEED) (NASDAQ: CGC), Tilray (TSX: TLRY) (NASDAQ: TLRY) and Hamlet Farms (TSX: VFF) (NASDAQ: VFF).
Amongst these largest LPs past revenue, Tilray was the best performer at +1.5%, while Canopy Growth was the worst for the second straight month at -12.3%.
Tier 2
Tier 2, which included the LPs that generate cannabis-related quarterly sales betwixt C$5 one thousand thousand and C$25 meg, cruel 15.0% to 302.79. In 2020, information technology lost 35.9% in 2020, endmost at 365.19, and it is down 17.1% in 2021. Prior to July 2020, companies needed revenue in backlog of C$2.5 million to be included in this tier.
This group included Aleafia Health (TSX: AH) (OTC: ALEAF), Auxly (TSX: XLY) (OTC: CBWTF), Cannara Biotech (TSXV: Honey) (OTC: LOVFF), Cronos Group (TSX: CRON) (NASDAQ: CRON), Decibel Cannabis (TSXV: DB) (OTC: DBCCF), Delta 9 (TSX: DN) (OTC: DLTNF), Entourage Health (TSXV: ENTG) (OTC: ETRGF), HEXO Corp (TSX: HEXO) (NASDAQ: HEXO), Indiva (TSXV: NDVA) (OTC: NDVAF) MediPharm Labs (TSX: LABS) (OTC: MEDIF), Organigram (TSX: OGI) (NASDAQ: OGI), TerrAscend (CSE: TER) (OTC: TRSSF), The Greenish Organic Dutchman (CSE: TGOD) (OTC: TGODF), Valens Company (TSX: VLNS) (OTC: VLNCF) and VIVO Cannabis (TSX: VIVO) (OTC: VVCIF).
TerrAscend and Auxly performed the best, upwards five.1% and iv.7%, respectively, while the weakest names were Entourage Health, downwardly 43.8%, and Aleafia Wellness, down 40.0%.
Tier three
Tier 3, which included the 20 qualifying LPs that generate cannabis-related quarterly sales less than C$5 million, rose 0.4% as it closed at 53.35. It ended at 66.59 in 2020, declining 31.2%, and is down 19.ix% in 2021. Two names helped boost Tier 3, including Greenway Greenhouse Cannabis (CSE: GWAY), which rallied 126.iii%, and IM Cannabis (CSE: IMCC) (NASDAQ: IMCC), which gained 59.viii%.
The returns for the overall sector varied greatly, with four names posting double-digit gains and 11 declining past more than than 20%. The entire group posted a median return of -ten.6%:
For Dec, the overall alphabetize volition have 25 constituents after a change in the minimum qualifications. Going frontwards, we take revised the Tier 1 minimum quarterly revenue through LP operations to be C$30 million. Tier 2 volition include companies with revenue between C$7.5 million and C$30 million, while Tier 3 now requires minimum revenue of C$2.5 million. HEXO has moved to Tier 1 from Tier 2, while several names take moved from Tier 2 to Tier 3. xiii companies no longer qualify for inclusion due to bereft revenue.
In the next monthly review, we will summarize the performance for Dec and talk over any additions or deletions. Be sure to bookmark the pages to stay current on LP stock price movements inside the day or from day-to-twenty-four hours.
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Based in Houston, Alan leverages his experience as founder of online customs 420 Investor, the commencement and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his all-encompassing 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 evolution and strategic alliances. Earlier shifting his focus to the cannabis industry in early on 2013, Alan, who began his career on Wall Street in 1986, worked as an independent enquiry 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 lxx,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
Source: https://www.newcannabisventures.com/canadian-cannabis-stocks-drop-5-5-in-november/
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