Cheap But Getting Cheaper

April 2, 2023 · New Cannabis Ventures

The cannabis sector started the year strongly, but we pointed to two troubling issues that were concerning us: low trading volume and liquidations of a popular ETF after the first full week. The New Cannabis Ventures Global Cannabis Stock Index rallied more than 10% in January, but it ended the quarter down 12.5% after declining in both February and in March.

Trading volumes remain very low, reflecting a lack of buy interest in our view. In early January, we pointed out that only 7 names traded more than $5 million in trading value the first Friday of 2023, significantly lower than in 2021 and 2022. The last Friday of Q1 saw just five names hit this threshold. Our quarterly rebalancing of the index resulted in three of the largest MSOs being removed due to their failure to meet the minimum trading value. Now only the very largest 5 will be in there.

Speaking of MSOs, the ETF that concerned us because of the redemptions it was facing is focused on MSOs, AdvisorShares Pure US Cannabis ETF. We pointed out in early January that the number of shares had declined 8.9% from mid-December. It has now declined 13.2% to 59.665 million shares, down 5.2% year-to-date. The ETF has performed very poorly, closing at an all-time low and dropping 18.6% in Q1:


Despite the bargain price, trading volumes remain very low. The ETF remains highly exposed to the 5 largest MSOs, holding 78.8% of the fund in them. Further redemptions will lead to selling pressure on the largest holdings, particularly the top two, Green Thumb Industries and Curaleaf, which comprise over 44% of the ETF.

We remain optimistic about cannabis stocks longer-term, as we think the industry should advance and see the stocks as very attractively valued. The weak start to 2023, though, is troubling, especially in light of stocks in general rallying during Q1. (Full Story)

In category:Finance
Next Post

New Mexico Governor Touts $300 Million In Adult-Use Marijuana Sales In The First Year Since Market Launched

The governor of New Mexico is marking the one-year anniversary of the state’s adult-use marijuana market, touting its more than $300 million in sales since last April as well as the thousands of jobs the cannabis industry has created. Gov.…
Read
Previous Post

Do the Chinese Really Run the Illicit Weed Market in America?

A joint law enforcement task force discovered approximately 9,000 pounds of cannabis with an estimated value of nearly $15 million in a suburban neighborhood in Antioch, Calif, just a few days before Christmas. The California Department of Cannabis Control suspected…
Read
Random Post

Colorado Dispensary unveils marijuana dispensers in Aurora

The Terrapin Care Station dispensary in Aurora now houses the country’s first fully automated cannabis vending machine. Developed in partnership with BMC Universal Technologies, the machine allows customers to order marijuana products through a touchscreen and dispense them directly to…
Read
Random Post

Schumer Touts Bipartisan ‘Momentum’ Behind Marijuana Banking Bill That He Plans To Bring To The Floor ‘Soon’ With More ‘Criminal Justice Provisions’

Senate Majority Leader Chuck Schumer (D-NY) says the bipartisan committee vote to advance a marijuana banking bill on Wednesday “underscores how much momentum we have right now” as he plans to bring the legislation to the floor “soon” and attach “very significant…
Read
Random Post

Cannabis Can Treat Some of Autism's Core Symptoms and Marijuana Extracts May be the Key Says New Medical Study

New Study Shows That Cannabis Extracts Are Useful For Autism - Promising Benefits Of CBD For Autism According to the World Health Organization, 1 in every 100 children have autism. While the symptoms of autism vary greatly, kids who grow up with autism can…
Read
Random Post

Cannabis retail sales to surpass $33.5B in 2023, topping chocolate, eggs and craft beer

Chris Morris Thu, April 13, 2023 at 12:08 AM GMT+7·2 min read Jeenah Moon/Bloomberg via Getty Images As more and more states make medical and recreational cannabis legal, the drug’s retail sales numbers are hitting new heights. More from Fortune: 5 side hustles where you…
Read