Largest Cannabis MSO Stocks Outpaced The S&P 500 Again This Week


Alan Brochstein, CFA and Editor of New Cannabis Ventures, said in a recent mailing to subscribers that, "The poor performance of so many companies in the industry financially and operationally weighs on the few companies that are legitimate...Be careful with companies that have high levels of debt and negative cash flow..." I second that.

Currently strongest in the sector seems to be the performance of Green Thumb Holdings, Inc. (GTBIF) which, according to an in-depth analysis by microaxis.com, is the ONLY cannabis company - MSO or LP - that has a positive operational cash flow and the company with the lowest chance (14%) of encountering financial stress and/or bankruptcy  in the next 2 years compared to its peers according to its Altman Z-Score (see my previous articles on the subject here and here). A market cap of $3 billion helps. [Of the dozen companies below, market caps range from Curaleaf's $3.87B down to Acreage Holdings at $123M. "Largest" does not necessarily mean large.]

Below are the performances of the 12 largest pure-play and vertically integrated constituents in the American Cannabis MSOs Index this week, since the end of September, and in the past 6 months. The latest in analysis and commentary on each of the companies is available here.

Performance Of Constituent In the Best Financial Health

  1. Green Thumb (GTBIF): UP 9.0% this week, UP 36.3% since the end of September, DOWN 13.1% in the past 6 months,
    • has a positive net operating cash flow (Source)
    • has only a 14% chance of encountering financial distress within the next 2 years (Source)
    • its quarterly EBITDA margin is 38.0% and its latest quarterly EBITDA grew by 11.5% (Source)
    • Read: Green Thumb Q3 Reports Record Revenue

1 Constituent Was UP +10%

  1. Jushi (JUSHF): UP 19.0% this week, UP 48.0% since the end of September, DOWN 22.2% in the past 6 months
    • has a negative net operating cash flow
    • has a 77% chance of encountering financial distress within the next 2 years
    • has a negative EBITDA but its latest quarterly EBITDA grew 11.5%

6 Constituents Were UP 5% to 10%

  1. Columbia Care (CCHWF): UP 9.5% this week, UP 30.6% since the end of September, DOWN 20.6% in the past 6 months
    • has a negative net operating cash flow
    • has a 73% chance of encountering financial distress within the next 2 years
    • has a negative EBITDA, its EBITDA margin is negative at -1.6% and its latest quarterly EBITDA growth declined 127.0%
  2. Acreage (ACRDF): UP 7.8% this week, UP 61.6% since the end of September, DOWN 10.3% in the past 6 months
    • has a negative net operating cash flow
    • has a 73% chance of encountering financial distress within the next 2 years
    • Has a positive EBITDA, its EBITDA margin is 13.5% and its latest quarterly EBITDA increased by 162.6%
  3. Ayr (AYRWF): UP 6.6% this week, UP 63.3% since the end of September, DOWN 46.8% in the past 6 months
    • has a negative net operating cash flow
    • has a 73% chance of encountering financial distress within the next 2 years
    • Has a positive EBITDA, its EBITDA margin is 202.6% and its latest quarterly EBITDA increased by 3.1%
  4. Cresco (CRLBF): UP 6.2% this week, UP 25.1% since the end of September, DOWN 26.4% in the past 6 months
    • has a negative net operating cash flow
    • has a 74% chance of encountering financial distress within the next 2 years
    • Has a positive EBITDA, its EBITDA margin is 18.0% and its latest quarterly EBITDA increased by 24.3%
  5. Curaleaf (CURLF): UP 5.9% this week, UP 12.1% since the end of September, DOWN 6.1% in the past 6 months
    • has a negative net operating cash flow
    • has a 73% chance of encountering financial distress within the next 2 years
    • Has a negative EBITDA, its EBITDA margin is negative at -14.6% and its latest quarterly EBITDA decreased by 11.1%
  6. Verano (VRNOF): UP 5.4% this week, UP 18.3% since the end of September, DOWN 30.1% in the past 6 months
    • has a negative net operating cash flow
    • has a 70% chance of encountering financial distress within the next 2 years
    • Has a positive EBITDA, its EBITDA margin is 14.9% and its latest quarterly EBITDA decreased by 22.7%

4 Constituents Were UP +0.5% to 4.9%

  1. Planet 13 (PLNHF): UP 4.2% this week, UP 10.8% since the end of September, DOWN 31.3% in the past 6 months
    • has a negative net operating cash flow
    • has a 36% chance of encountering financial distress within the next 2 years
    • Has a positive EBITDA, its EBITDA margin is 3.0% and its latest quarterly EBITDA increased by 180.9%
  2. TerrAscend (TRSSF): UP 3.9% this week, UP 24.2% since the end of September, DOWN 66.2% in the past 6 months 
    • has a negative net operating cash flow
    • has a 74% chance of encountering financial distress within the next 2 years
    • Has a positive EBITDA, its EBITDA margin is 13.5% and its latest quarterly EBITDA increased by 162.6%
  3. Trulieve (TCNNF): UP 2.1% this week, UP 29.8% since the end of September, DOWN 23.6% in the past 6 months 
    • has a negative net operating cash flow
    • has a 74% chance of encountering financial distress within the next 2 years
    • Has a positive EBITDA, its EBITDA margin is 28.1% and its latest quarterly EBITDA increased by 6.2%
  4. Ascend (AAWH): UP 0.5% this week, UP 9.9% since the end of September, DOWN 38.5% in the past 6 months
    • has a negative net operating cash flow
    • has a 77% chance of encountering financial distress within the next 2 years
    • Has a positive EBITDA, its EBITDA margin is 8.3% and its latest quarterly EBITDA increased by 777.5%

Summary

In total, the munKNEE American Cannabis MSOs Index:

  • was UP 6.1% this week compared to the S&P 500 index which was DOWN 3.3%,
  • is UP 29.5% since the end of September vs. the S&P 500 which is DOWN 5.2%,
  • but is DOWN 26.4% in the past 6 months vs. the S&P 500 which is only DOWN 8.7%.

That compares very favorably with the Canadian Cannabis LPs Index which is UP 2.8% this week, UP 19.6% since the end of September but DOWN 31.3% in the past 6 months (see details here).


More By This Author:

Largest Canadian Cannabis LP Stocks Outpaced The S&P 500 Again This Week
Green Thumb Reports Record Revenue And Adjusted Operating EBITDA
October Recap: Conservative Cannabis Category Outpaced S&P 500

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