Only The Conservative Pot Stocks Index Is Up YTD And Currently Yields 4.9%

person holding white flower during sunset

If you were to invest in a basket of the major companies that have bought into marijuana companies you could possibly generate greater returns than only owning the associated marijuana company. Here are the details:

The munKNEE Conservative Pot Stocks Index tracks the performance of 8 such major tobacco, beer/liquor, and other companies, and they are compared with their associated cannabis stocks and with the 4 other sector categories tracked by The performances of the Index constituents and that of each of their marijuana partners so far in 2021 (i.e. YTD as of August 20th) are as follows, in descending order:

  1. Altria Group, Inc. (NYSE: MO) is +20.3% YTD with a current Dividend Yield of 7.1% and
    • has a 45% stake in Cronos Group Inc. (Nasdaq: CRON) which is -11.1% YTD and pays out no dividend.
  2. Alimentation Couche-Tard Inc. (ANCUF) is +19.1% YTD with a current Dividend Yield of 0.70% and
    • has a 9.9% ownership stake in Fire & Flower Holdings Corp.  (FFLWF) and is +5.9% YTD and pays out no dividend.
  3. Imperial (Tobacco) Brands PLC (IMBBY) is +5.8% YTD with a current Dividend Yield of 5.2% and
    • has a 19.9% stake in Auxly Cannabis Group Inc. (CBWTF) which is +5.0% YTD and pays out no dividend.
  4. Molson Coors Brewing Company (NYSE: TAP) is +5.8% YTD with a Dividend Yield of 2.8% and
    • has a 57.5%/42.5% joint venture, called TRUSS, with Hexo Corp. (NYSE: HEXO) which is -37.0% YTD and pays out no dividend.
  5. Novartis AG (NYSE: NVS) is +2.6% YTD with a Dividend Yield of 3.4% and
    • has a global agreement with Tilray Inc. (Nasdaq: TLRY) allowing it to use the Sandoz supply chain, sales force, and global distribution network and it is +55.3% YTD but pays out no dividend. 
  6. British American Tobacco (BTI) is +0.6% YTD with a Dividend Yield of 8.1% and
    • has a C$221M investment and product development partnership with Organigram Holdings Inc. (OGI) which is +77.4% YTD but pays out no dividend
  7. Constellation Brands Inc. (NYSE: STZ) is -2.1% YTD with a Current Dividend Yield of 1.4% and 
    • owns 39% (if it exercises its warrants and converts its notes will own 55%) of Canopy Growth Corporation  (NYSE: CGC) which is +32.3% YTD but pays out no dividend. 
  8. Anheuser-Busch InBev SA (NYSE: BUD) is -14.2% YTD with a Dividend Yield of 1.0% and 
    • has a $100 million joint venture with Tilray Inc. (Nasdaq: TLRY) which is +55.3% YTD but pays out no dividend.

In summary

  • Stock Performance:
    • the Conservative Pot Stocks Index is +1.2% YTD
    • compared to their marijuana partners which are +1.0% YTD, on average.
  • Dividend Yields:
    • the Conservative Pot Stocks Index constituents have dividends that currently yield 4.9%, on average,
    • while their marijuana partners have no dividends.

Pot Stock & Pot-Related Stock Index Performance Comparisons

  • The munKNEE  Pure-Play “Seed-to-Sale” Pot Stocks Index consists of 23 constituents that derive 100% of their revenue from the sector and trade for at least US$1/share. The index is -6.6% YTD. The Index consists of two sub-categories: the munKNEE Canadian Pure-Play Licensed Producers (LPs) Pot Stock Index and the munKNEE Pure-Play American Multi-State Operators (MSOs) Pot Stock Index and they have performed as follows, YTD:
  • The Pure-Play Marijuana Drug Stocks Index consists of 8 clinical-stage bio-pharmaceutical companies involved in the development of drugs using CBD and THC and it is -19.4% YTD.

The above 4 non-tradable indices replicate the performance of a portfolio investing an equal amount of money in each company in the various cannabis categories, with daily rebalancing to maintain equal weight, to serve as benchmarks to measure the performance of individual stocks compared to their respective index. We believe this overview of the cannabis stock sector is the most insightful analysis to be found anywhere. 

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