The stock price of the average constituent in munKNEE's American Cannabis MSO Index  has jumped 34% in the 2 weeks since 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 MSO companies, allow major U.S. stock exchanges to list multi-state operators (MSOs) on their exchanges and potentially allow foreign companies to begin selling their products in the United States.

Below are the changes in the stock prices of the 7 constituents in the Index this week in descending order of performance, this week and MTD with their current price-to-sales ratios:

1. Columbia Care (CCHWF): up 17.4% this week; up 82.4% MTD
   • *Forward Price-to-Sales Ratio: 1.1
2. Trulieve Cannabis (TCNNF): up 15.5% this week; up 30.9% MTD
   • Forward Price-to-Sales Ratio: 1.2
3. Curaleaf Holdings (CURLF): up 12.1% this week; up 41.3% MTD
   • Forward Price-to-Sales Ratio: 2.8
4. Green Thumb (GTBIF): up 11.2% this week; up 26.5% MTD
   • Forward Price-to-Sales Ratio: 2.8
5. Verano Holdings (VRNOF): up 5.1% this week; up 46.3% MTD
   • Forward Price-to-Sales Ratio: 1.9
6. Cresco Labs (CRLBF): Unchanged this week; up 55.7% MTD
   • Forward Price-to-Sales Ratio: 1.0
7. TerrAscend Corp. (TSNDF): down 2.3% this week; up 3.9% MTD
   • Forward Price-to-Sales Ratio: 2.0

*The P/S ratio (PSR) describes how much someone must pay to buy one share of a company relative to how much that share generates in revenue for the company. and, as such, determines whether its stock is cheap or overpriced in comparison to its peers. While the ideal ratio depends on the company and industry, the ratio is typically good when the value falls between one (1)  and two (2) and a ratio of less than one (1`) is even better.

Conclusion

The munKNEE American Cannabis MSO Index was up 9.8% this week on top of a 19.5% increase last week and is now up 34.7% MTD. In comparison, the Canadian Cannabis LP Index (see this week's article here) was up 14.8% this week on top of a 9.7% increase last week and is now up 25.9% MTD. 

If you are interested in this category, consider the  AdvisorShares Pure US Cannabis ETF (MSOS) which was up 9.3% this week and is now up 34.4% MTD.

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