After two consecutive strong months, Cannabis stocks slipped in June, with the Global Cannabis Stock Index declining 9.6% to 29.41:
The index, which had 35 qualifying members during the month following the quarterly rebalancing at the end of March, declined 34.1% in 2019 to 42.20 and is now down 22.9% in 2020. For Q2, it rallied 24.7%:
After posting an all-time closing low of 16.95 set on March 18th, the index has rallied sharply to end the month 73.5% higher but still down almost 84% from its early 2018 closing high at 180.02:
The strongest 4 names in June increased by at least 16%:
- cbdMD (NYSE American: YCBD): +29.9%
- Planet 13 Holdings (CSE: PLTH) (OTC: PLNHF): +24.4%
- Power REIT (NYSE: PW): +23.0%
- HEXO Corp (TSX: HEXO) (NYSE:HEXO): +16.7%
cbdMD bucked the trend of weakness among its peers. Planet 13 reopened its Las Vegas Superstore. The company also sold C$10 million of stock. Power REIT, which has only partial exposure to the cannabis space, didn’t release news in June. HEXO continued to work on repairing its balance sheet during the month, converting debt to equity, selling C$34.5 million in stock and selling its Niagara facility. The company beat expectations when it reported revnue of C$22.1 million for its fiscal Q3.
The 4 weakest names fell by more than 35% in June:
- Pyxus International (OTC: PYXSQ): -83.3%
- iAnthus Capital (CSE: IAN) (OTC: ITHUF): -41.4%
- KushCo Holdings (OTC: KSHB): -40.6%
- Harvest Health & Recreation (CSE: HARV) (OTC: HRVSF): -35.9%
Pyxus entered bankruptcy during the month and lost its NYSE listing. iAnthus Capital, which earlier in the quarter defaulted on its debt, failed to file its 2019 financials and was suspended from trading in Canada. Its creditor, Gotham Green Partners, has demanded repayment. Harvest Health & Recreation, which was also one of the worst performers in May, filed a $300 million shelf registration and closed a deal with Hightimes Holdings to sell several California dispensary licenses for $60 million in stock and $1.5 million cash. KushCo Holdings rallied more than 71% in May and gave up those gains in June. The company announced the departure of its Chief Revenue Officer during the month.
The rebalancing process for Q3 resulted in the addition of six companies and the removal of four, leaving the index with 37 members. The criteria were adjusted such that the minimum daily trading value was raised from $300K to $500K.
The removed companies include AYR Strategies, which didn’t meet the dollar-volume requirement, iAnthus, which fell below the minimum price of $0.25, and CannTrust and Pyxus, both of which are no longer actually listed (and are in bankruptcy). Joining the index for the first time are Columbia Healthcare (CSE: CCHW) (NEO: CCHW) (OTC: CCHWF), FSD Pharma (CSE: HUGE) (NASDAQ: HUGE) and Mydecine Innovations Group (CSE: MYCO) (OTC: MYCOF). Rejoining are Greenlane Holdings (NASDAQ: GNLN), Green Organic Dutchman (TSX: TGOD) (OTD: TGODF) and TILT Holdings (CSE: TILT) (OTC: TLLTF).
We have also published separate reviews of the performance of the Canadian LP Index and the American Cannabis Operators Index:
- Canadian Cannabis Producer Stocks Pull Back 11% in June
- American Cannabis Operator Stocks Gain 29% in Q2
We will summarize the index performance again in a month. You can learn more about the index members and the qualifications for inclusion by visiting the Global Cannabis Stock Index. A more complete analysis of the index is available at 420Investor.com. Be sure to bookmark the page to stay current on cannabis stock price movements within the day or from day-to-day.
New Cannabis Ventures maintains six proprietary indices designed to help investors monitor the publicly-traded cannabis stocks, including the Global Cannabis Stock Index as well as the Canadian Cannabis LP Index and its three sub-indices. The sixth index, the American Cannabis Operator Index, was launched at the end of October last year and tracks the leading cultivators, processors and retailers of cannabis in the United States.
