420 Investor Weekly Review 09/23/22

Review

Canada is finally reviewing the adult-use program. The country saw sales increase sequentially by 4.5% to C$394.8 million in July, up 17.8% 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:

  • ACB reported flat sales at C$50.2 million, predominantly from the medical cannabis market. Its adjusted EBITDA was worse than expected at -C$12.9 million. There was also a large hit to income due to write-downs.
  • AYRWF introduced its brand Lost in Translation into four additional states.
  • CRLBF launched its Cresco brand in Florida.
  • CURLF opened its 18th Pennsylvania medical cannabis dispensary in Allentown. It also closed the acquisition of the majority of Germany's Four 20 Pharma.
  • GNLN launched a new enhanced wholesale shopping experience.
  • GRWG will open a new store in Richmond, Virginia and has two planned for New Jersey and Missouri.'
  • TCNNF gained a Georgia medical cannabis Class 1 license and opened a relocated dispensary in Florida.
  • TLRY received approval to extend in Italy.
  • TRSSF named a new Northeast Region President, Karim Bouaziz, formerly with Parallel and with VidaCann.

There were comments in over 90 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 hit a new all-time closing low on Friday of 11.70. For the week, it fell 12.8%, which far exceeded the 4.7% decline in the S&P 500.

The index, which lost 26% in 2021 following a 5.2% gain in 2020, is down 64.4% in 2022. It currently includes 26 stocks and ended 2021 at 32.85. In September it is down 23.0%, and it is down 20.7% 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 $155,858, down 16.8% during the week and now down 11.1% 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 47.0% in 2022. The model portfolio has increased 1458% since inception. Flying High has 7 positions and 0.1% cash. During the week, there were no changes made.

420 Opportunity, which rose 19.3% in July and 1.6% in August, ended the week at $37,294, down 16.2% and now down 11.8% 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 lost 12.8% during the week. In 2021, the model lost 13.8%, while the index decreased 26.0%, and it is down 58.9% in 2022 compared to the index loss of 64.4%. The model portfolio has lost 11.0% since inception, while the overall market has declined by 98% during that time-frame. The model maintains 16 holdings and 0.1% cash. The three largest holdings include (MAPS (10.6%), OGI (9.9%) and CEAD (9.5%). During the week, I sold IIPR and ACB on Monday and added to SBIG, and VFF and added a new position in CRLBF. On Thursday, I exited CRON and added to CRLBF and MAPS.

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 $52,114, down 15.5% this week and now down 11.7% in Q3. In 2021, the model portfolio lost 21.8% compared to the 26.0% loss in the index. In 2022, it has returned -58.8% compared to the index return of -64.4%. 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 4.2%, while the index has lost about 85.5%. The model has 15 holdings and 0.8% cash. The largest positions include OGI (10.8%), MAPS (10.3%) and CEAD (8.9%). During the week, I sold IIPR and added a new position in SBIG on Monday. I also sold ACB and added a new position in CRLBF. On Thursday, I exited CRON and added to CRLBF, MAPS and SBIG.

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.

  • On Monday, Jews around the world will be celebrating Rosh Hashanah, the Jewish New Year.
  • On Wednesday evening, I will host a chat for 420 Investor subscribers at 8:30 ET.

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. 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).

Posted to 420 Investor on Sep 23, 2022 — 4:09 PM
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