420 Investor Weekly Review 09/09/22

Review

BDSA data for July showed continued modest growth in most of the states that they track sequentially in July. Mature markets in the West fell dramatically from a year ago. Hifyre data suggests that Canadian retail cannabis sales fell slightly from a record in July to C$402.6 million in August. Illinois released its medical cannabis data for August, which suggested that the overall cannabis sales during the month were down 3.8% sequentially to $158.4 million and up 2.5% from a year ago.

I distributed this written material to 420 Investor subscribers during the week:

Here are some of this week's highlights for Focus List names:

  • AAWH reported an investigation into its CEO regarding a domestic-related misdemeanor. It was able to secure a $15 million CAPEX lease facility from XS Financial.
  • AYRWF announced that its partner in Connecticut won a provisional adult-use license in the state.
  • CGC announced the debut of "with Love, for Peace" limited-edition VOLCANO CLASSIC.
  • CRLBF closed a sale-leaseback in Pennsylvania with Aventine Property Group, selling the cultivation asset for $45 million.
  • JUSHF debuted cannabis-infused chocolates by Tasteology in Massachusetts.
  • TLLTF took third place in the Cultivators Cup in Massachusetts with its NF1 Badder.
  • TLRY will be advising German regulators regarding adult-use legalization there.
  • VRNOF closed the acquisitions of two operating dispensaries in Nevada and an active cultivation facility (Sierra Well). It also opened its 15th store in Pennsylvania.

There were comments in over 120 discussions in the Forum. Don't miss out on this most informative part of 420 Investor! Not familiar with the the Forum? This video will help! This is a great way to track your favorite tickers, even those not on the Focus List, and to get your questions answered quickly.

Please check the Focus List, (which has technical, fundamental and valuation ratings as well as a market-cap table). To help track market caps, we maintain tables for the Canadian LPs and the American cannabis operators and ancillary companies.

Market Performance

The Global Cannabis Stock Index rose 0.5% during the week to 14.75, still holding its 52-week after making a new all-time closing low of 14.21 on 9/6 . This trailed the S&P 500, which rose 3.7%:

The index, which lost 26% in 2021 following a 5.2% gain in 2020, is down 55.1% in 2022. It currently includes 26 stocks and ended 2021 at 32.85. In September it is down 3.0%, and it is down a penny in Q3.:

For perspective, the index, which began 2013 at 100, bottomed in August 2013 at 70 after a prior peak of 220 in February 2013 and peaked in 2014 at 1010. The long post-2014 decline ended in February 2016, with the market soaring at the beginning of 2018 to levels not seen since 2014. We took out the 2016 lows by a wide margin in early 2020 and then soared into 2021 before reversing. We recently made a new all-time low:

Model Portfolios

Flying High, up 21.7% in July and 3.9% in August, ended the week valued at $211,888, up 1.8% during the week and now up 20.9% quarter-to-date. This model portfolio was launched on 9/23/13 with $10,000 (paper), and it ended 2013 at $18,225, 2014 at $15,702, 2015 at $9608, 2016 at $49,568, 2017 at $112,891, 2018 at $161,346, 2019 at $165,249, 2020 at $252,409 and 2021 at $294,249. The year-to-date gain was 16.6% in 2021, and the model portfolio is down 28.0% in 2022. The model portfolio has increased 2019% since inception. Flying High has 7 positions and 0.3% cash. During the week, I didn't make any adjustments to the model portfolio.

420 Opportunity, which rose 19.3% in July and 1.6% in August, ended the week at $49,160, up 0.7% and still up 16.3% quarter-to-date. This model portfolio, which was funded with $50,000 (paper) on 4/8/14 and ended 2014 at $17,105, 2015 at $11,418, 2016 at $44,915, 2017 at $91,407, 2018 at $94,616, 2019 at $77,715, 2020 at $105,373 and 2021 at $90,823, has a goal of being fully invested and outperforming the market as measured by the 420 Investor Cannabis Stock Index, which gained 0.5% during the week. In 2021, the model lost 13.8%, while the index decreased 26.0%, and it is down 45.9% in 2022 compared to the index loss of 55.1%. The model portfolio has lost 1.7% since inception, while the overall market has declined by 98% during that time-frame. The model maintains 18 holdings and 0.1% cash. The three largest holdings include OGI (9.0%), HYFM (8.8%) and CEAD (8.5%). During the week, I reduced SBIG on Tuesday and added a new position in SMG. I also reduced LOWLF and added to SMG. On Thursday, I reduced ACB and added to AAWH.

420 Quality, which was funded with $50,000 (paper) on 3/1/17 and was up 20.4% in July and 0.5% in August, ended the week at $67,563, down less than 0.1% this week and still up 14.5% in Q3. In 2021, the model portfolio lost 21.8% compared to the 26.0% loss in the index. In 2022, it has returned -46.8% compared to the index return of -55.1%. It ended 2017 at $109,480, 2018 at $119,053, 2019 at $113,123, 2020 at $161,504 and 2021 at $126,323. To learn more about the model portfolio, which is longer-term focused, please read the description I posted before launch. Since inception, the model has gained 35.1%, while the index has lost about 81.8%. The model has 16 holdings and 0.3% cash. The largest positions include OGI (9.9%), HYFM (8.7%) and GRWG (8.6%). During the week, I added to SMG on Tuesday. I also reduced ACB and added to AAWH on Thursday.

Calendar

As a reminder, 420i posts a calendar for your convenience, as does New Cannabis Ventures. NCV also posts a separate calendar for conference calls.

  • Tuesday and Wednesday, Benzinga hosts its Cannabis Capital Conference in Chicago.
  • Wednesday: High Tide reports its fiscal Q3 after the close and hosts a call

Companies with fiscal years ending in June (May for Canadian Venture stocks that don't file with the SEC) must report their annual financials in September. This includes ACB from the Focus List. Companies with years ending in January, April and October must file their quarterly reports by mid-September (or by late September for Canadian-listed stocks that aren't on the TSX or NEO or filing with the SEC). This includes FFLWF from the Focus List.

Posted to 420 Investor on Sep 09, 2022 — 4:09 PM
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