Canada's Major Marijuana LPs Continued To Decline In September

The munKNEE pure-play Canadian LPs Pot Stocks Index consists of the 5 largest vertically integrated (i.e. seed-to-sale) Canadian Licensed Producers (LPs). Below are the performances of its constituents for this week, in September, in descending order, and so far this year (YTD) with the latest in analysis and commentary on each of the companies to be found here:

  1. Cronos (CRON): DOWN 1.4% this week; DOWN 5.1% in September; DOWN 28.1% YTD
    • The Altria Group (MO) has a 45% stake in Cronos.
  2. Organigram (OGI): DOWN 1.1% this week; DOWN 14.6% in September; DOWN 49.7% YTD
    • British American Tobacco (BTI) has a C$221M investment and product development partnership with Organigram
  3. Tilray (TLRY): UP 1.5% this week; DOWN 17.9% in September; DOWN 60.7% YTD
    • Anheuser-Busch (BUD) has a $100 million joint venture with Tilray.
  4. Aurora (ACB): UP 2.5% this week; DOWN 18.5% in September; DOWN 77.3% YTD
    Canopy Growth (CGC): DOWN 3.9% this week; DOWN 21.1% in September; DOWN 68.7% YTD
    • Constellation Brands (STZ) has a 39% stake in Canopy Growth.

In total, the munKNEE Canadian Pot Stocks Index overall was DOWN 0.1% this week, was DOWN 15.5% in September and is now DOWN 61.2% YTD.

As I mentioned in my recent article on marijuana ETFs (see here), if you are interested in investing in the Canadian LP category the ETFs with the largest percentage of such stocks is the Global X Cannabis ETF (POTX) which, for comparison purposes, was DOWN 1.0% this week, was DOWN 15.3% in September but is "only" DOWN 60.9% YTD.)

If you believe that the category has more or less bottomed and is setting the stage to surge upwards then you might want to consider investing in one of the bull ETFs mentioned below::

  1. ETFMG 2x Daily Bull Alternative Harvest ETF (MJXL)
  2. Horizons 2x Bull Marijuana Companies ETF (HMJU)

Conversely, if you think the category is going to decline further you might want to consider investing in one of the following inversely leveraged ETFs:

  1. ETFMG 2x Daily Inverse Alternative Harvest ETF (MJIN)
  2. BetaPro 2x Inverse Canadian Marijuana Companies ETF (HMJI)

Incidentally, the 13 stocks that make up the munKNEE American MSOs Pot Stocks Index are performing even worse than the Canadian LPs, going DOWN 6.2% this week, DOWN 33.0% in September and DOWN 65.1% YTD. Details by constituents will follow in my next article.

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