Cannabis Stocks: It's Déjà Vu All Over Again


Q: Is it déjà vu all over again?

Cannabis stocks jumped almost 13% during the first week of May following the reintroduction of the Secure and Fair Enforcement (SAFE) Banking Act which would provide crucial banking and financial services to legitimate marijuana businesses while also protecting banks that collaborate with them from federal backlash. Enthusiasts suggested that passage of the reintroduced bill would  provide a clear route for the SAFE Banking Act to make its way through the Senate Banking Committee and, ultimately. to be voted on in the Senate. A week later, however, the optimism for such an eventuality had faded with the average cannabis stock price falling 11% to end up marginally below their prices at the end of April.

At the end of August, the U.S. Department of Health & Human Services recommended to the Drug Enforcement Administration that they reclassify marijuana's drug status to that of a Schedule III (i.e. lower-risk) substance based on a recent Food and Drug Administration review. If implemented it would substantially ease banking requirements for American MSO companies, allow major U.S. stock exchanges to list MSOs on their exchanges and potentially allow Canadian cannabis LPs (as well as other foreign domiciled companies) to begin selling their products in the United States. Investors responded enthusiastically with a 23% jump in the industry's average stock price by September 15th. That enthusiasm weakened this past week, however, down 15%, on average, to end up only 4% above their prices at the end of August.

A: Yes, unfortunately, it is it déjà vu all over again

Below are the performances of the 5 stocks in munKNEE's Canadian Cannabis LPs Index and in the 7 stocks in munKNEE's American Cannabis MSOs Index for this week, in descending order, and month-to-date (MTD):

munKNEE's Canadian Cannabis LPs Index

  1. Cronos Group (CRON): DOWN 13.0% this week; UP 1.5% MTD
  2. Organigram Holdings (OGI): DOWN 17.6% this week; DOWN 8.5% MTD 
  3. Tilray Brands (TLRY): DOWN 18.1% this week; DOWN 18.9% MTD
  4. Aurora Cannabis (ACB): DOWN 23.5% this week; UP 74.4% MTD
  5. Canopy Growth (CGC): DOWN 37.8% this week; UP 47.4% MTD

Average: DOWN 20.1% this week; DOWN 1.7% MTD

munKNEE's American Cannabis MSOs Index

  1. TerrAscend Corp. (TSNDF): DOWN 0.9% this week; UP 2.9% MTD
  2. Verano Holdings (VRNOF): DOWN 8.7% this week; UP 33.5% MTD
  3. Green Thumb (GTBIF): DOWN 10.0% this week; UP 12.7% MTD
  4. Columbia Care: (CCHWF): DOWN 10.4% this week; UP 63.5% MTD
  5. Cresco Labs (CRLBF): DOWN 15.0% this week; UP 32.3% MTD
  6. Trulieve Cannabis (TCNNF): DOWN 16.9% this week; UP 8.8% MTD
  7. Curaleaf Holdings (CURLF): DOWN 19.9% this week; UP 13.2% MTD

Average: DOWN 12.6% this week; UP 16.9% MTD

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