420 Investor Weekly Review 08/26/22

Review

ETFMG is now including MSOs in its MJ ETF. AdvisorShares introduced leverage to its platform for the MSOS ETF. Ohio released data that suggests the state's medical cannabis program is still seeing weekly sales in excess of $9 million.

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 saw workers at its Boston location join Teamsters.
  • ACB paid $45 million to gain control of Bevo Farms and sold it the Aurora Sky facility.
  • CCHWF introduced Triple Seven into Pennsylvania, its 10th market.
  • CEAD celebrated its 16th anniversary.
  • FFLWF closed a $5 million convertible debt deal (C$1 conversion price).
  • GDNSF launched Boundary Waters pre-rolls in Minnesota.
  • GTBIF will, through RISE Dispensaries, serve as the premier sponsor of HeadCount's Cannabis Voters Project.
  • HYFM entered an exclusive distribution agreement with the Agricultural Gas Company for CO2 generation, delivery and control.
  • JUSHF opened its 35th dispensary, its 4th in Virginia.
  • LOWLF raised $4.2 million in a convertible note offering with warrants that was participated in by certain directors and officers for $2.4 million.
  • STHZF doubled revenue sequentially to $34.6 million due to its M&A, but the number fell far short of expectations.
  • TLRY received approval from The Natural Health Science Foundation to use its flagship product in clinical trials in Australia and New Zealand. In Canada, it launched CannaPoints, a program to support patients, as well as additional products.
  • TRSSF closed Pinnacle in Michigan, giving them 5 dispensaries (now 17 in the state) for $28.5 million.

I removed VLNS from the Focus List this week upon the announcement that SNDL will acquire the company for stock.

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 rallied despite the broad market weakness of the S&P 500 retreating 4.0%, increasing 1.6% during the week to 15.29 after setting an all-time closing low of 14.36 during the week on Tuesday:

The index, which lost 26% in 2021 following a 5.2% gain in 2020, is down 53.5% in 2022. It currently includes 26 stocks and ended 2021 at 32.85. In August, it has fallen 0.7%:

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, ended the week valued at $219,779, up 0.5% during the week and now up 3.0% in August. 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 25.3% in 2022. The model portfolio has increased 2098% since inception. Flying High has 7 positions and 0.2% cash. During the week, I exited an LP on Tuesday and added to an ancillary holding and to two MSOs. On Wednesday, I exited an MSO and added to an LP and a added a new position in an ancillary company. On Thursday, I trimmed one ancillary name (the one I added to on Tuesday) and added to another ancillary name.

420 Opportunity, which rose 19.3% in July, ended the week at $51,248, down 0.8% (and +1.6% in August) 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 1.5% during the week. In 2021, the model lost 13.8%, while the index decreased 26.0%, and it is down 43.6% in 2022 compared to the index loss of 53.5%. The model portfolio has gained 2.5% since inception, while the overall market has declined by 98% during that time-frame. The model maintains 18 holdings and 0.2% cash. The three largest holdings include AYRWF (10.0%), TRSSF (9.1%) and OGI (8.8%). During the week, I exited GTBIF on Monday, adding to UGRO, GRWG and CRON. On Tuesday, I exited the CEADW and added to AYRWF. On Wednesday, I trimmed AAWH and added to TRSSF. On Thursday, I reduced CRON and added a new position in SBIG. On Friday, I trimmed IIPR and added to HYFM.

420 Quality, which was funded with $50,000 (paper) on 3/1/17 and was up 20.4% in July, ended the week at $71,347, down 0.9% this week (and still up 0.5% in August). In 2021, the model portfolio lost 21.8% compared to the 26.0% loss in the index. In 2022, it has returned -43.5% compared to the index return of -53.5%. 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 42.7%, while the index has lost about 81.1%. The model has 17 holdings and 0.1% cash. The largest positions include OGI (9.6%), AYRWF (9.5%) and TRSSF (9.1%). During the week, I exited GTBIF on Monday, adding to UGRO, GRWG and CRON. On Tuesday, I exited the CEADW and added to AYRWF. On Wednesday, I trimmed AAWH and added to TRSSF. On Friday, I trimmed IIPR and added to HYFM.

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. We are almost done with the June 30th quarter!

  • Monday: Jushi and Khiron host Q2 calls in the morning, and Cansortium hosts one after the close.
  • Tuesday: Franchise Global and Entourage Health host calls in the morning.
  • Wednesday: TGOD hosts a Q2 call in the morning.

Companies with fiscal years ending in May (April for Canadian Venture stocks that don't file with the SEC) must report their annual financials in August. This includes none from the Focus List since Tilray already filed. Companies with years ending in March, September and December must file their quarterly reports by mid-August (or by late August for Canadian-listed stocks that aren't on the TSX or NEO or filing with the SEC).

Posted to 420 Investor on Aug 26, 2022 — 4:08 PM
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