E Cannabis Central: YTD American MSOs Have Dramatically Outperformed Canadian LPs

The 25 stocks in the munKNEE Pure-Play Pot Stock Index are down 11.1%, on average, YTD, but the 13 American Multi-State Operators (MSOs) are UP 46.9%, on average, which compares extremely favorably with the 7 Canadian Licensed Producers (LPs) in the index which are DOWN 47.3%, on average, YTD.  9 of the MSOs are UP from the beginning of the year but only 1 of the 7 LPs is and this article identifies the extent to which each has done so. 

The 10 best performers since the beginning of 2020 (and as of October 30) are as follows, in descending order:

Licensed Producers

  1. Rubicon (ROMJF) 117.9%

Multi-State Operators

  1. TerrAscend (TRSSF) +164.4% 
  2. Trulieve (TCNNF) +98.8% 
  3. Jushi (JUSHF) +89.1%
  4. Planet 13 (PLNHF) +62.8% 
  5. Green Thumb (GTBIF) +61.4% 
  6. Ayr (AYRSF) +51.4%
  7. Curaleaf (CURLF) +48.7% 
  8. Columbia (CCHWF) +47.8%
  9. Cresco (CRLBF) +29.2%

The fact that the above stocks are up YTD suggests that the companies are well managed, well-financed, and executing their respective business plans in such a manner as to have the confidence of serious marijuana stock investors and, as such, they deserve your attention.

Conversely, and for the record,

  • 6 of the 9 Canadian LPs (including the 2 Extraction Category LPs) are DOWN by more than 30% YTD, namely:
    1. Aurora (ACB) -84.4%
    2. Tilray (TLRY) -66.7%
    3. Valens (VLNCF) -53.4%
    4. Organigram (OGI) -51.0%
    5. Cronos (CRON) -31.0% 
    6. Neptune (NEPT) -29.8%
  • 3 of the 15 American MSOs (including the 2 hemp-based MSOs) are DOWN by more than 30% YTD, namely:
    1. Charlotte's Web (CWBHF) -63.9%
    2. Medicine Man (SHWZ) -59.0%
    3. Harvest Health (HRVSF) -51.7%

While the 10 constituents that are UP over 30% suggest that management is executing their respective business plans admirably, the 9 that are DOWN over 30% suggest that, at best, the major adjustment in their share prices is behind them, making them excellent prospects going forward; or at worst, suggests that the companies are being poorly managed and have dismal prospects going forward. In either case, this shows why it is paramount that in depth due diligence be undertaken before investing in any such stocks.

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