Cannabis stocks are very volatile with major ups and downs in their stock prices but if you were to invest in one of the 8 major consumer and pharmaceutical companies that have bought into marijuana companies you could reduce such volatility by more than 50%.

Our new munKNEE Conservative Pot Stock Index tracks the performance of those 8 stocks, and we compare them with their associated cannabis stocks and with Canadian Licensed Producers, American Multi-State Operators, Ancillary Pot Stocks, and Cannabis-Centric Bio-Pharmaceutical Stocks. The performance of the constituents of the Index and that of their marijuana partner in April were as follows, in descending order, with their performance YTD in brackets:

1. Anheuser-Busch InBev SA (NYSE: BUD): +12.1% in April; (+1.5% YTD); Beta: 1.53
   • has a $100 million joint venture with Tilray Inc.  (Nasdaq:  TLRY): -16.9%; (+120.8%); Beta: 2.79
2. Alimentation Couche-Tard Inc. (ANCUF): +7.4%; (-0.7%); Beta: 0.93
   • has a 9.9% ownership in Fire & Flower Holdings Corp.  (FFLWF): +3.4%; (+33.8%); Beta: 2.39, with the potential to increase to  50.1%.
3. Molson Coors Brewing Company (NYSE: TAP): +7.0%; (+21.6%); Beta: 1.11
   • has a 57.5%/42.5% joint venture, called TRUSS, with Hexo Corp. (NYSE: HEXO): +6.0%; (+1.1%); Beta: 1.74
4. Constellation Brands Inc. (NYSE: STZ): +2.1%; (+10.1%); Beta: 1.20
   • owns 39% of Canopy Growth Corporation  (NYSE: CGC):  -16.1%; (+9.4%); Beta: 2.15 and if it exercises its warrants and converts its notes will own 55% of Canopy Growth shares.
5. Imperial (Tobacco) Brands PLC (IMBBY): +0.5%; (+1.5%); Beta: 0.88
   • has a 19.9% stake in Auxly Cannabis Group Inc. (CBWTF): N/C in April; (+55.0%); Beta: 0.74
6. Novartis AG (NYSE: NVS): -2.5%; (-6.3%); Beta: 0.51
   • has a global agreement with Tilray Inc. (Nasdaq: TLRY): -16.9%; (+120.8%); Beta: 2.79 allowing it to use the Sandoz supply chain, sales force, and global distribution network.
7. British American Tobacco (BTI): -4.8%; (+2.0%); Beta: 0.86 
   • has a C$221M investment and product development partnership with Organigram Holdings Inc. (OGI): -24.0%; (+100.0%); Beta: 0.99
8. Altria Group, Inc. (NYSE: MO): -9.0%; (+18.5%); Beta: 0.64
   • has a 45% stake in Cronos Group Inc. (Nasdaq: CRON): -12.4%; (+17.3%); Beta: 1.73

In summary

On average, the above 8 stocks:

• were +1.7% in April (+6.4% YTD) compared to their marijuana partners which were -15.0% April (+64.8% YTD) and
• have a beta (a measure of volatility in stock price) of less than the overall market at 0.96, on average, compared to their marijuana partners which have an average beta of 1.91 or almost double that of the overall market.
• have dividends (excluding Molson Coors) that currently yield 4.2%, on average, while none of their marijuana partners have dividends.

munKNEE Pure-Play Cannabis Pot Stock Index Performance Comparisons

When determining where to invest in the cannabis stock sector it is imperative to understand how the various categories in the sector differ in their respective performances so, to put things in perspective, below is a comparison of the performances in April of each of the 5 indices that munKNEE.com tracks and how each index performed YTD. We think it provides the clearest overview of the cannabis stock sector that is available anywhere:

1. the American Pure-Play Multi-State Operators Pot Stock Index (22 constituents): +2.0% in April; (+38.1% YTD),
2. the Conservative Pot Stocks Index (8 constituents): +1.7% in April; (+6.4% YTD),
3. the Ancillary Pot Stocks Index (16 constituents): -0.1% in April; (+14.6% YTD),
4. the new Cannabis-Centric Bio-Pharma Companies Index (13 constituents): -6.5% in April; (+7.8% YTD) and
5. the Canadian Pure-Play Licensed Producers Pot Stock Index (8 constituents): -12.6% in April (+42.4% YTD).

Overall, based on the above analyses of 33.5% of the cannabis and cannabis-related stocks trading (200 in total), the total pot stock sector was -0.6% in April but remains +14.6% YTD.

The above 5 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 an equal weight, to serve as benchmarks to measure the performance of individual stocks compared to their respective index.