Marijuana Stocks Have Declined In Past 2 Weeks – Here’s Why

munKNEE Pure-Play Canadian LP Pot Stock Index is Down -19.7% YTD

April 10, 2022 Lorimer Wilson Analyst Articles, Cannabis

eResearch | The U.S. House of Representatives passed the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act on March 25th and that initially led investors hoping for quick passage of a Senate bill to match the bill passed in the House. Last week, however, Senate Majority Leader Chuck Schumer said he would not be introducing the Senate’s version of the House’s act, called the Cannabis Administration & Opportunity Act (CAOA), until toward the end of April. Those comments caused investors to show their impatience by continuing to dump stocks in both the proprietary munKNEE Pure-Play Canadian LP Pot Stock Index and the proprietary munKNEE Pure-Play American MSO Pot Stock Index.

By Lorimer Wilson, Founder and Managing Editor of munKNEE.com – Your KEY to making money!

Below are the highlights of the performance of both indices and their constituents over the past 2 weeks and from their peaks in February of 2021, as follows, in descending order (with each company name hyperlinked to its website and each trading symbol hyperlinked to stockanalysis.com. In addition, the Chance of Financial Distress data is sourced from macroaxis.com  and the Analyst Consensus is sourced from stockanalysis.com.

The munKNEE Pure-Play Canadian LP Pot Stock Index

The Canadian LP Pot Stock Index consists of the 5 largest pure-play, vertically integrated licensed producers of cannabis whose stocks trade for at least US$1/share, have a market cap of at least US$400M, and trade on one or more of the Canadian and/or American stock exchanges.

Below is the performance of the constituents of the Index over the past 2 weeks, YTD, and from their peaks in February of 2021, as follows, in descending order:

  1. Organigram (OGI): -15.9% over the past 2 weeks; (-15.4% YTD)
    • Chance of Financial Distress in next 2 years: less than 1%
    • Analyst Consensus: 17 stock analysts currently rate OGI as a BUY.
  2. Cronos (CRON): -18.9%; (-11.2% YTD)
    • Chance of Financial Distress in next 2 years: 50%
    • Analyst Consensus: 20 stock analysts currently rate CRON as a SELL.
  3. Aurora (ACB): -21.7%;  (-35.5% YTD)
    • Chance of Financial Distress in next 2 years: 49%
    • Analyst Consensus: 18 stock analysts currently rate ACB as a SELL.
  4. Canopy Growth (CGC): -22.9%; (-23.3% YTD)
    • Chance of Financial Distress in next 2 years: +61%
    • Analyst Consensus: 26 stock analysts currently rate CGC as a SELL.
  5. Tilray (TLRY): -25.2%; (-9.0% YTD)
    • Chance of Financial Distress in next 2 years: +63%
    • Analyst Consensus: 25 stock analysts currently rate TLRY as a HOLD.
    • Recent Analysis/Commentary: Tilray: Keeping Competition Alive

In sum total, over the past 2 weeks no constituent advanced and the Index declined -22.3% and is now down -19.7% YTD.

The munKNEE Pure-Play American MSO Pot Stock Index

The American MSO Pot Stock Index consists of the 13 largest pure-play, vertically integrated multi-state operators whose stocks trade for at least US$1/share, have a market cap of at least US$300M (Goodness Growth is less but will soon be owned and incorporated into Verano), and trade on one or more of the Canadian and/or American stock exchanges.

Below is the performance of the constituents of the Index over the past 2 weeks, YTD, and from their peaks in February of 2021, as follows, in descending order:

  1. TerrAscend (TRSSF): +3.7% over the past 2 weeks; (-4.1% YTD)
  2. Green Thumb (GTBIF): +0.7%; (-20.3% YTD)
    • Chance of Financial Distress in next 2 years: less than 1%
    • Analyst Consensus: 23 stock analysts currently rate GTBIF as a BUY
    • Recent Analysis/Commentary: Green Thumb: Ignore Noise
  3. Ayr Wellness (AYRWF): -0.4%; (-15.9% YTD)
  4. Trulieve (TCNNF): -3.8%; (-23.7% YTD)
  5. Curaleaf (CURLF): -4.2%; (-24.4% YTD)
    • Chance of Financial Distress in next 2 years: 39%
    • Analyst Consensus: 23 stock analysts currently rate CURLF as a BUY
    • Recent Analysis/Commentary: Curaleaf: Trend Remains Up
  6. Columbia Care (CCHWF): -4.7%; (No Change YTD)
    • Chance of Financial Distress in next 2 years: +74%
    • Analyst Consensus: None following CCHWF
  7. Planet 13 (PLNHF): -6.4%; (-20.6% YTD)
  8. Cresco (CRLBF): -7.0%; (-16.0% YTD)
    • Chance of Financial Distress in next 2 years: +62%
    • Analyst Consensus: None following CRLBF
  9. Acreage (ACRDF/ACRHF): -8.8%; (+6.0% YTD)
  10. Jushi (JUSHF): -9.2%; (-12.3% YTD)
  11. Goodness Growth (GDNSF): -9.3%; (+14.6% YTD)
    • Chance of Financial Distress in next 2 years: +63%
    • Analyst Consensus: None following GDNSF
  12. Verano (VRNOF): -11.3%; (-27.2% YTD)
  13. Ascend Wellness (AAWH): -13.0%; (-44.9% YTD)

Over the past 2 weeks only 2 constituents advanced but the Index declined -4.1% and is now down -8.3% YTD.

In Summary

In sum total, both the Canadian LP and American MSO indices reacted negatively to the delay in the introduction of the Senate’s Cannabis Administration & Opportunity Act (CAOA) declining -8.3%, on average, and are now down -20.2% YTD, on average.

Action Going Forward

If history is any guide this emotional negative reaction to the delay in the introduction of the Senate cannabis bill suggests that now would be a good time to take positions in one or more of the cannabis stocks mentioned above as we should expect a significant runup in their prices just prior to the introduction of the proposed CAOA.

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About Lorimer Wilson 17 Articles
Lorimer Wilson is an economic & financial commentator who has written numerous articles on economics, finance, precious metals, and rare earth metals. He is the Editor of www.munKNEE.com that provides a selection of the internet’s best finance articles in an edited, reformatted and abridged format to ensure a fast and easy read. He is a frequent contributor to TalkMarkets.com.

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