Every month I slice and dice the performance of six categories within the overall cannabis market to unveil the strengths and weaknesses of its components. December saw the spread in the returns of those categories range from +10.1% to -15.9% versus +1.0% for the overall marijuana market. That's a dramatic spread and one worth understanding if you are considering positioning yourself in this fledgling market sector.

The 6 baskets of marijuana stocks/ETFs consist of:

1. The Marijuana & Marijuana-related ETFs Category

This category consists of 15 ETFs of which two are US-centric (HMUS; USMJ), 2 are leveraged plays (HMJU; HMJI), two are marijuana/marijuana-related plays (ACT; MJ) and the remaining nine are more broadly based and six of the 15 are passively managed and nine are actively managed.

Seven ETFs have been added over the course of 2019 making historical performance comparatives for all periods impossible but some interesting results are noted:

The total basket of ETFs, on average:

• declined 2.75% in December (excluding the leveraged ETFs) following on the heels of a
  • 7.3% decline in November,
  • 8.4% decline in October,
  • a 13.3% decline in September and
  • an 11.9% decline in August.

2. The CBD/THC Extraction Stocks Category

This category consists of five companies (LABS, VGWCF, RTI, NEPT and OILFF) that function as the middle-men of sorts in the cannabis supply chain purchasing dried cannabis, extracting the oil-like substance containing THC or CBD from the plant, and selling it back to the same producers, or to other producers that have requested cannabis extract. The category has received a lot of hype with the suggestion that its stocks are poised to capitalize on what could be the next big cannabis investing trend – extracted products - but it has been in decline since its peak back in March/April.

This basket of stocks, on average:

• increased 2.6% in December,
• declined 9.9% in November,
• increased 1.77% in October,
• declined 16.9% in September and 
• declined 17.3% in August

3. The Marijuana-infused Beverage Category

Established beverage companies, as well as entrepreneurs, are developing formulas and methods for infusing CBD or THC, or both, into beverages in hopes of becoming the next "monster" of the rapidly emerging cannabis beverage market but no company stands out, as yet, as the company to invest in.

This basket of 8 stocks (WTER, NBEV,BEV, ZBISF, TNYBF, SPR, DIXI.U and HRVOF), on average:

• declined 15.9% in December,
• declined 16.8% in November,
• declined 16.7% in October,
• declined 17.4% in September and
• declined 8.9% in August

4. Cannabis Companies Concentrating on Europe Category

The CBD industry will grow more than 400% through 2023 in Europe making it the largest legal cannabis market in the world and the following companies consider this to be a great opportunity to enter and/or expand through Europe.

The basket of six stocks (STIL, ALEAF, ELXR, TGODF, AGFAF and RQB), on average:

• declined 8.8% in December,
• declined 23.5% in November,
• declined 32.2% in October,
• declined 29.9% in September and
• declined 2.4% in August

5. The Marijuana-related Consumer Products/Pharmaceutical Stock Category

This category consists of 14 consumer products (tobacco, alcohol, food) and pharmaceutical companies that are directly involved in the cannabis sector. 4 (ABBV, MO, CODI, TAP, IIPR) pay dividends ranging from 4.2% to 6.7%; 5 (BUD, IMBBY, NVS, SMG, ASBFY) pay dividends ranging from 2.1% to 3.7%,  two (STZ, HEINY) pay a dividends between 1% and 2% and two (PYX & ATD.A) don't pay any dividends.

This basket of 14 stocks, on average:

• increased 2.4% in December,
• increased 2.3% in November
• declined 5.3% in October,
• increased 1.0% in September and
• declined 7.0% in August

6. The Vaporizer Manufactures, Vape Extract Suppliers & Vape-related Stock Category 

There are three ways to play the cannabis vape market: choose to buy the vaporizer manufacturers and suppliers (KSHB; VPRB; GNLN; MCIG; OGI; WCIG), go after the recurring revenue provided by the extract suppliers (CRON; SPRWF; VEXTF) or invest in the less volatile vape-related big tobacco companies (MO; IMBBY; BTI; PYX; JAPAY; TPB; VGR).

The basket of 6 vaporizer manufacturers, on average:

• increased 2.0% in December,
• declined 6.4% in November,
• increased 11.76% in October,
• declined 41.3% in September and
• declined 25.9% in August

The basket of 3 extract suppliers, on average,

• increased 10.1% in December,
• increased 8.7% in November,
• declined 14.2% in October,
• declined 22.1% in September and 
• declined 16.8% in August

The basket of 7 vape-related tobacco companies, on average,

• increased 4.0% in December,
• increased 9.1% in November,
• declined 0.75% in October,
• declined 8.7% in September and
• declined 2.9% in August

Conclusion

Which approach you take to investing in the pot stock sector is up to you but I hope the above analyses help you decide which category is best for you.