American Cannabis Operator Index Declines 6.1% in October

After three straight monthly double-digit percentage declines, the American Cannabis Operator Index fell again for the seventh consecutive month but managed to outperform the broader cannabis sector, declining 6.1% to 47.49:

The index, which launched at the end of October with a value of 100, traded as low as 70.64 in late December after having reached a closing high of 124.16 in early November. This past month, it ended at the lows and it is now down 38.6% in 2019:

During October, the index included 28 companies, including 23 multi-state operators (MSOs) and 5 focused solely on CBD extracted from industrial hemp. Several MSOs are pursuing CBD strategies apart from their state-licensed cannabis businesses. 6 companies managed double-digit gains, while 14 posted double-digit losses, including 4 that lost more than 25% of their value:

The three best performing stocks were Liberty Health Sciences (CSE: LHS) (OTC: LHSIF), Trulieve (CSE: TRUL) (OTC: TCNNF) and Green Growth Brands (CSE: GGB) (OTC: GGBXF). Liberty  bounced back sharply after reporting fiscal Q2 financials that showed 93% sequential revenue growth and improved profitability. Trulieve, which is up in 2019, was able to secure $60 million through the issuance of debt with warrants on terms similar to four months ago. Like Liberty, Green Growth Brands bounced back after issuing financials for the  year ending June 30th.

The three worst performing stocks were Veritas Farms (OTC:  VFRM), Plus Products (CSE: PLUS) OTC: PLPRF) and MedMen (CSE: MMEN) (OTC: MMNFF). Veritas Farms, which conducted a reverse-split in late September, pulled back after a strong advance in its stock over the past several months. MedMen rallied into the release of its financials for the year ending June 30th but sold off sharply following news that it was in the process of renegotiating its convertible note credit agreement with Gotham Green Partners.

For November, the number of names in the index will decrease by 5 to 23.  CBD producers Abacus Health Products (CSE: ABCS) (OTC: ABAHF) and Veritas Farms and MSOs  Dixie Brands (CSE: DIXI) (OTC: DXBRF), 4Front (CSE: FFNT) (OTC: FFNTF) and Sunniva (CSE: SNN) (OTC: SNNVF) were removed due to not meeting the trading volume requirement.

In the next monthly review, we will summarize the performance for November and discuss any additions or deletions. Be sure to bookmark the page to stay current on American cannabis operators stock price movements within the day or from day-to-day.

Published by Alan Brochstein, CFA

Based in Houston, Alan leverages his experience as founder of online communities 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | Email