E Cannabis Central: Non-Penny Pot Stocks Flat (+0.3%) On Monday With Only 1 Major Outlier

 

The NPSI declined 0.3% on Monday with 10 of the revised 25 constituents going UP, 11 going DOWN and 4 having no change in price. In addition, all 3 sector categories advanced. The details are below.

(Over the past weekend I revamped the Index to more accurately reflect the true health of the cannabis sector by concentrating exclusively on pot stocks that, in addition to trading above US$1/share, are also seen as "pure plays". To that end, the NPSI now excludes non-penny bio-pharmaceutical (GW Pharma & XPhyto), real estate investment trust (Innovative Industrial Properties) and product research & development companies (New Age Beverages) from the list of constituents. In doing so, the index has been reduced from 29 to 25 constituents.)  

On Monday:

  • only 4 constituents increased more than 5%, namely Medicine Man (SHWZ) +20.7%; Village Farms (VFF) +6.3%: Charlotte's Web (CWBHF) +5.6% and Aphria (APHA) +5.4% and
  • no constituent declined by 5% or more. 

Interestingly, the 8 Canadian Licensed Producers ( LPs) in the index advanced by 1.1% while the 11 American Multi-State Operators (MSOs) declined by 0.2% and the 3 hemp MSOs advanced by 3.0%.

Given the above mentioned changes the equally-weighted index now includes:

  • 4 constituents that trade between US$10 and US$20/share,
  • 4 trade between US$5 and US$10/share and
  • 17 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 90% 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 (calculated by multiplying the number of a company's shares outstanding by its stock price per share) now consists of:

  • Large-Cap (+US$10B): 0
  • Mid-Cap (US$2B to US$10B): 2
  • Small-Cap (US$300M to US$2B): 9
  • Micro-Cap (US$50M to US$300M): 14
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Adam Reynolds 11 months ago Member's comment

Thanks Lorimer Wilson, out of curiosity, what percentage of #potstocks are penny stocks?

Lorimer Wilson 11 months ago Author's comment

Believe it or not, the number is 87% to 92% depending on the type of supposed pot stocks counted. My NPSI is a true pure play index of just 25 stocks out of a total of 298 (i.e. just 8%) that trade actively. If you include the other 14 ancillary "cannabis" stocks that many analysts include, such as GW Pharma, the Innovative Industrial Properties REIT, that percentage increases to 13% of the total universe.