At last count there were 225 cannabis and ancillary companies trading on the various North American stock exchanges but only 23 meet the criteria* for inclusion in the munKNEE  Pure-Play "Seed-to-Sale" Pot Stocks Index - which consists of two sub-categories: Canadian Pure-Play Licensed Producers (LPs) Pot Stock Index and the Pure-Play American Multi-State Operators (MSOs) Pot Stock Index. Which have performed the best so far in August and year-to-date: LPs or MSOs? This article has the answers.

*The criteria for inclusion in the munKNEE marijuana indices are vertically integrated (seed-to-sale) companies that derive 100% of their revenue from the sector, have a market capitalization in excess of US$300K, and trade for at least US$1/share. Only 6 Canadian LP stocks and 17 American MSO stocks meet those criteria.

The munKNEE Canadian Pure-Play Licensed Producers Pot Stock Index

• is -13.7% so far in August (MTD) and
• is now -11.5% YTD.
  • Its constituents are: Canopy (CGC), Tilray (TLRY), Cronos (CRON), Aurora (ACB), Organigram (OGI), and Hexo (HEXO).
  • 5 of the 6 constituents in the sub-category have changed in price by 10% or more MTD, namely:
    • Hexo: -41.7% (now -37.0% YTD)
      • Investors have reacted negatively to the size of Hexo's announced issuance of 47.5M shares at $2.95/share to generate gross proceeds of around $140M to finance its Redecan acquisition and the fact that Hexo is unable to fund its operations with cash flows.
    • Cronos: -16.3% (now -11.1%)
      • Investors are concerned that Cronos' acquiring a 10.5% ownership stake in PharmaCann could weigh heavily on its expenses in the coming months.
    • Tilray: -12.2% (still +55.3% YTD)
      • The company confirmed its intention to secure an entry into the US cannabis market with the buying of a majority of the outstanding senior secured convertible notes of MedMen Enterprises but  the company has struggled to gather an investor majority to raise the funds needed to move forward with the transaction. 
    • Canopy: -11.7% (now -32.3% YTD)
    • Organigram: -10.0% (still +77.4% YTD)
  • Aurora is the remaining constituent in the munKNEE Canadian Pure-Play Licensed Producers Pot Stock Index and it is "only" -4.8% MTD but is now -19.6% YTD. 

The munKNEE American Pure-Play Multi-State Operators Pot Stock Index

• is -11.8% MTD and
• is now -1.3% YTD.
  • Its constituents are: Curaleaf (CURLF), Green Thumb (GTBIF), Trulieve (TRSSF), Verano (VRNOF), Cresco (CRLBF), TerrAscend (TRSSF), Columbia (CCHWF), Harvest Health (HRVSF), Ascend Wellness (AAWH), Planet 13 (PLNHF), Ayr (AYRWF), Jushi (JUSHF), 4 Front (FFNTF), Charlotte's Web (CWBHF), Gage (GAGE),   Acreage (ACRDF & ACRHF) and Goodness Growth (GDNSF).
    • 8 of the 17 constituents in the sub-category changed in price by 10% or more last week, namely:
      • Verano: -28.4% (now -51.0% YTD)
        • California has introduced a new bill that would legalize psychedelic drugs in California which, if passed, could adversely affect sales trends in the marijuana industry and Verano investors reacted very negatively to the news.
      • Harvest Health: -20.9% (still +35.2% YTD)
        • The company is being acquired by Trulieve Cannabis (see below) and was adversely affected by that future association.
      • Trulieve: -18.7% (now -16.0% YTD)
        • Decline is in reaction to a highly publicized corruption case in which the husband of its CEO was found guilty on August 13th on 5 of 9 counts including extortion, fraud, and lying to the FBI.
      • Charlotte's Web: -18.1% (now -20.6% YTD)
        • remains under pressure due to a lack of progress by Congress towards Federal legalization of cannabis.
      • Columbia Care: -17.5% (now -34.5% YTD)
        • like Charlotte's Web, the company remains under pressure due to a lack of progress by Congress towards Federal legalization of cannabis.
      • TerrAscend: -12.0% now (-29.1% YTD)
      • Goodness Growth: -11.3% (now -4.1% YTD)
      • Ayr Wellness: -10.5% (still +9.0% YTD)
    • Of the other 9 constituents in the Index, only Gage is UP so far in August but just by a marginal 0.4%.

In Summary:

• The munKNEE Pure-Play "Seed-to-Sale" Pot Stocks Index is -12.2%  MTD and is now -6.6% YTD
• Of the two index sub-categories, American Pure-Play Multi-State Operators Pot Stock Index has 
  • outperformed the LP sub-index MTD, at -11.8% versus the LP sub-index which is -13.7% and has
  • outperformed the LP sub-index YTD, at -1.3% versus the LP sub-index which is -11.5%.

The above non-tradable indices replicate the performance of a portfolio investing an equal amount of money in each company in the cannabis categories, with daily rebalancing to maintain equal weight.