Cannabis Central: Wednesday Saw A Reversal In Performance For The NPSI

TM editors' note: This article discusses small-, mid- and micro-cap stocks. Such stocks are easily manipulated; do your own careful due diligence.

Only 25 pure-play pot stocks trade above US$1/share and they make up the constituents of the Non-penny Pot Stock Index (NPSI). They did poorly on Wednesday down 2.9% compared to a 6.6% gain on Tuesday with 16 of the constituents declining as well as 2 of the 3 associated sector categories. The details are as follows:

Biggest Winners

2 constituents went UP in excess of 5%, namely:
1. cbdMD (YCBD) +10.5%
2. Greenlane (GNLN) +9.4%

7 other constituents went UP by less than 5%.

Biggest Losers

Aphria (APHA) -19.2% (see Q4 Financial Report here)
Aurora (ACB) -8.6%
Tilray (TLRY) -7.3%
Charlotte's Web (CWBHF) -6.2%
Canopy Growth (CGC) -5.1%

11 other constituents went UP by less than 5%.

Harvest Health (HRVSF) and IMCannabis (IMCNF) are on the verge of being included in munKNEE.com's NPSI but have not yet been able to consistently stay above US$1/share. If they can do so between now and the end of the month they will be added to the index.

Further details regarding the equal-weighted index are as follows:

4 constituents trade between US$10 and US$20/share,
6 trade between US$5 and US$10/share and
15 trade between US$1 and US$5/share.
- The official definition of a "penny" stock is one that trades below US$5/share but, when it comes to pot stocks, that is where 92% of the total universe trades, so the more literal definition of stocks that trade for less than US$1/share is used.

The market capitalization makeup of the NPSI is as follows:

Large-Cap (+US$10B): 0
Mid-Cap (US$2B to US$10B): 4
Small-Cap (US$300M to US$2B): 9
Micro-Cap (US$50M to US$300M): 11
Nano-Cap (<US50M) 1
Average Market Cap: US$963M

In addition, the constituents operate in 3 categories based on their primary area of focus in the cannabis industry and the constituents within each category are identified below with how each of the categories did:

The Vertically Integrated (i.e. Seed-to-Sale) Category consists of 22 companies that grow, process, and sell cannabis and hemp flower and related products and it declined 3.3% compared to an advance of 6.8% on Tuesday.
- the 8 constituents that are Canadian Licensed Producers (LPs) declined 7.0% after having advanced 6.8%, on average, on Tuesday and 4.1%, on average, on Monday.
  - ACB; APHA; CGC; CRON; OGI; ROMJF; TLRY and VFF
- the 11 constituents that are U.S. Multi-State Operators (MSOs) declined 0.4%, on average, on Wednesday compared to a 4.9% increase, on average, on Tuesday and a 4.5% increase, on average, on Monday.
  - ACRGF; AYRSF; CCHWF; CRLBF ; CURLF; GTBIF; JUSHF; PLNHF; SHWZ; TRSSF and TCNNF
- the 3 constituents that are only involved in the seed-to-sale of CBD from hemp advanced 1.3%, on average, on Wednesday vs. a 1.7% increase, on average, on Tuesday and a 2.9% increase, on average, on Monday.
  - AVCNF; CWBHF and YCBD
The Extraction Category consists of companies focused on the extraction of cannabis compounds and their infusion into consumer products and it declined a further 1.3%, on average, on Wednesday vs. a decline of 0.7%, on average, on Tuesday and a 0.9% advance, on average, on Monday.
- the 2 constituents in this category are NEPT and VLNCF
The Consumption Devices Category consists of companies focused on developing and selling personal consumption devices for cannabis consumers such as vape pens and inhalers. It advanced 9.4% on Wednesday on the heels of a 9.0% advance on Tuesday and a 4.9% advance on Monday.
- the 1 constituent in this category is GNLN

You have shown a serious interest in the cannabis sector by reading this article to the very end so don't stop here. Check out the following exclusive articles posted recently on TalkMarkets for more information on the marijuana market that is not to be found anywhere else, namely:

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