E Cannabis Central Weekly Recap: From Green To Red

In my previous article I said "Last week [w/e Jan. 17] was one of the best in a long time for pot stocks doing business on both sides of the border but, despite the 11.7% rally, investors shouldn't mistake it as a sign that the downturn is over. After all,  a 1-week reversal - even 1-month of positive returns - does not a trend reversal make" and last week's results [w/e Jan. 24] proved just that, declining 6.9% on average. (Source

The cannabis market consists of 319 publicly-traded companies of which the vast majority trade for less than $1/share so even small changes in the price can have a very large affect on the percentage change that represents so this analysis primarily emphasizes those stocks that trade above $1/share. (Source of data below)

Performance w/e Jan. 24

Canada

The U.S. and International

Performance w/e Jan. 17

Canada

The U.S. and International

Cash and liquidity will become one of the most important factors in determining how most marijuana stocks will perform this year as most companies are running out of money.

It is crucial for companies to secure funding in order to weather short-term market volatility and achieve a critical scale so it is imperative that investors identify companies that demonstrate long-term viability and access to capital markets. Below are a couple of examples from the past week in that regard:

  • Aphria (TSX: APHA; NYSE: APHA) issued C$100 million in equity to an unnamed institutional investor. The stock price remained unchanged for the past week.
  • Cresco Labs (CSE: CL; OTCQX: CRLBF) announced a senior secured term loan, with an initial drawdown of C$100 million, with the option for another C$100 million. The stock price only declined 4%.

This article discusses small-, micro- and nano-cap stocks so do your own careful due diligence. Visit munKNEE.com  (A ...

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