Canadian Cannabis Stocks Bounce Sharply From Mid-May Lows As Canada moves closer to full legalization of marijuana in July 2018, some Canadian companies are seeing sharp increases in their stock prices. Here is a look at five marijuana stocks that are on the upswing.
Thought you couldn’t get much more excited about Canadian Cannabis stocks? Well think again, as after a month-long slump, the sector is back on track.
Canadian medical marijuana stocks have experienced a dramatic rebound after the recent decline. By the end of the trading day on May 20, the three biggest stocks in the cannabis sector had shed between 60% and 80% of their value.
The Canadian Cannabis LP Index fell for the third consecutive month in May, losing 3.9% to 354.97. But it also rose 9.3% after rising on the 13th. May closed at 324.84, the lowest level since early January: , which is in index 4. The stock rose 22.1% in the third quarter but fell 30.1% in 2020, finishing at 275.16: It remains well below its all-time closing high of 1314.33 in September 2018, just before legalization in Canada. It hit a new 52-week closing low of 196.10 in March 2020, not seen since late 2016, and closed 81.0% above that level in late May : The Canadian Cannabis LP Index, rebalanced monthly, consisted of 39 eligible licensed producers trading on the open market in Canada at the end of April, with each share equally weighted. Each of the participants was also included in the sub-index: During the month, 3 companies were added to the Canadian Cannabis LP Tier 1 Index, 15 to the Canadian Cannabis LP Tier 2 Index and 21 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 0.5% to 718.73 in April. Level 1, which decreased by 23.9% to 488.96 in 2020, increases by 47.0% 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) and HEXO Corp (TSX:HEXO) (NYSE:HEXO). Of these largest LPs by revenue, HEXO Corp was the best performer, up 4.6%, while Canopy Growth fell 8.7%.
Tier 2, which includes LPs with quarterly cannabis revenues between C$5 million and C$25 million, rose 2.3% to C$589.61. In 2020, it loses 35.9% and closes at 365.19, and in 2021, it goes up 61.5%. Prior to July 2020, companies had to have a turnover of more than CAD 2.5 million to be included in this tier. 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), TerrAscend (CSE: TER) (OTC: TRSSF), 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 performed best with an increase of 45.7%, while Zenabis increased more than 20%. Aleafia lost 17.3%.
Tier 3, which includes 21 eligible venture capital firms with quarterly cannabis revenues of less than C$5 million, fell 8.9% and closed at 72.00. It ended 2020 at 66.59, down 31.2%, and will rise 8.1% in 2021. The Green Organic Dutchman (TSX:TGOD) (OTC:TGODF) was the strongest name among Tier 3 companies, up 35.4%. Within the sector, returns varied widely, with 3 stocks gaining more than 20% and 5 stocks declining by more than 20%. The median result for the entire group was -5.1%: In June, the overall index will again consist of 39 constituents, with Tilray (TSX:TLRY) (NASDAQ:TLRY) in the lead. Discovery Wellness was removed after the price fell below the minimum. In addition, TerrAscend moves from Level 2 to Level 3 and The Green Organic Dutchman (TSX:TGOD) (OTC:TGODF) moves from Level 3 to Level 2. In next month’s review, we will summarize the June results 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. Stay ahead of the crowd by subscribing to 420 Investor, the largest and most comprehensive subscription service for cannabis dealers and investors since 2013. 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, Canopy Growth, CGC, CRON, Cronos Group, db, dbccf, decibel cannabis, Delta 9, dltnf, dn, fire, Green Organic Dutchman, Hexo, hexo corp, Labs, medif, MediPharm Labs, ncnnf, nrth, OGI, Organigram, SPRWF, supreme cannabis, TER, Terrascend, TGOD, TGODF, TRSSF, Valens, VFF, Village Farms, vivo, vivo cannabis, vlncf, vlns, vvcif, WDDMF, WEED, weedmd, wmd, zbisf, zena, Zenabis Global
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Despite weak economic indicators and a new government, Canadian Cannabis Stocks Bounce Sharply From Mid-May Lows The Canadian cannabis market’s downward spiral may be coming to an end.. Read more about new cannabis ventures aphria and let us know what you think.
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