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- NJ legalized and Virginia will be adding flowers to its medical program.
- Health Canada added 6 licenses and revoked 3.
- 420 portfolios of investor models have increased by 76.7-90.9% since the start of the year, while the Global Cannabis Stock Index has increased by 50.2%.
The New Jersey Governor signed the Adult Legalization Act. Virginia’s medical cannabis program will add flowers. Another MSO, Parallel, chose the SPAC route to IPO.
Health Canada data showed that inventories of not only flowers but also food would remain high from November onwards. Health Canada added 6 new licenses this week, bringing the total, including the suspended license from Ten-10 Ventures, to 613, with the revoked licenses from Agrima, Alberta Green Biotech, BC Tweed (2), Bloomera, Budding Gardens, excluded are. FV Pharma, Hexo’s 4th location, Maricann’s 2nd location, Medican Organic’s 2nd location, Muskoka Grown, Original BC, a small processing facility owned by Canopy Growt and Zenalytics Laboratories, the expired licenses of Evergreen Medicinals and Toronto Research Chemicals , two assigned licenses formerly owned by James Wagner, a license previously held by Total Cannabis Solutions and the voluntarily canceled license by Avalite Sciences.
During the week, I shared these insights with subscribers of 420 Investor:
- Indus Holdings Q4 Earnings Preview
- Results preview for the Cronos Group and innovative industrial properties
- Review of the cannabis sub-sector – 02/19/21
- Composition of the model portfolio February 19, 21
Here are some of this week’s highlights for 420 investor focus list names:
- APHA has filed a joint preliminary proxy with Tilray and expects the transaction to close in the second quarter, having already received HSR clearance
- CGC filed a $ 2 billion on-shelf registration
- CRON Q4 revenue soared to $ 17 million, but Adjusted EBITDA deteriorated to $ 53 million.
- CURLF expanded its Select brand to Utah
- CWBHF announced a research collaboration to investigate the effectiveness of a custom formulated, hemp-derived product high in CBD.
- FFLWF entered the USA via a strategic licensing partnership with the possibility of acquiring the operator in the future
- FLOOF converted an undisclosed amount of seller debt into common stock.
- GRWG acquired a chain of four locations in Southern California with annual sales of $ 10 million
- GTBIF raised $ 56 million for the sale of shares for $ 35.50
- HRVSF sold its two North Dakota pharmacies
- IIPR growth slowed significantly as the company missed consensus forecast for revenue and earnings, posting revenue of $ 37.1 million with an AFFO of $ 1.29
- INDXF announced the acquisition of Lowell Herb Co for $ 39 million, mostly in shares
- KSHB sold 24 million units at $ 1.65 to raise $ 40 million to repay their April debt
- SPRWF filed a $ 150 million on-shelf registration
- TCNNF opened its 75th Florida pharmacy
- TLRY’s board of directors requested the release of blocked shares once a final proxy was filed for the Aphria merger. It also filed an addendum to the prospectus stating that there was $ 159 million left in its ATM.
- VREOF will open its first Maryland pharmacy in March after the state expansion of manufacturing capacity is also completed.
The Global Cannabis Stock Index fell for the second straight week, falling 12.4% to 66.67:
The index, which lost 34.1% in 2019 and 54.9% in 2018, after rising 91.8% in 2017 and 88.8% in 2016, rose 5.2% in 2020. The index has gained 50.2% so far in 2021. It currently comprises 38 stocks and ended 2020 at 44.39:
420 investor model portfolios
420 Investor offers three model portfolios for subscribers, including two that are long-term and fully invested to outperform the Global Cannabis Stock Index, 420 Opportunity, and 420 Quality. 420 Opportunity ended the week valued at $ 195,040, down 10.7%. The model portfolio, which grew by 85.1% in 2021, increased by 35.6% in 2020 and by 290.1% since April 2014. 420 Quality ended the week at $ 285,439, down 10.6% for the week, and is now up 20.7% in 2021 after gaining 42.8% from the model launched in March 2017 and is aimed at long-term investors looking to invest in leading cannabis stocks with low portfolio turnover. Since inception, it’s up 470.9% compared to a 17.6% decline in the index. Flying High, which is focused on swing trades, ended the week trading at $ 481,831, down 10.8%. The model portfolio grew by 52.7% in 2020 and increased by 90.9% in 2021. The return since inception at the end of 2013 was 4718%.
After a strong rally in early 2019, the cannabis sector saw a sharp decline to unprecedented levels over the next year due to several negative developments including the CannTrust scam, Bruce Linton’s surprise termination as CEO of Canopy Growth, a disappointing introduction of legalization in Canada, the US regulatory confusion over CBD and a slow roll-out of legalization in California, the vaping crisis and then financial turmoil and market disruption due to the COVID-19 pandemic. The sector saw capital available to fund expansion, a situation that continues to challenge negative cash flow companies as availability is limited to stronger operators.
Cannabis stocks overreacted and bottomed in March. You are now benefiting from the perception that the industry has strong growth prospects, which was not clear at the time. One big change was that the pandemic has led many regulators to allow previously banned types of retail activities such as roadside pickup and delivery. The legal market quickly benefits from becoming even more convenient than the illegal market and being able to order online. High unemployment and large deficits are likely to fuel government legalization efforts as well as more favorable regulatory scrutiny at the local level. Access to capital is now improving rapidly.
There are some potential catalysts ahead, including the FDA clearing up CBD, advances in Canadian legalization that began in October 2018 and encompassing a wider range of products, and continued growth in German and Israeli MMJ and other international markets is slow to develop. The adult implementations in California and Massachusetts have been slow to adopt, but are starting to show major improvements. Michigan and Illinois were legalized in late 2019, and these markets are experiencing strong growth that could encourage other states to legalize. Voters in Arizona, Montana, South Dakota, and New Jersey approved adult legalization in November.
The big issues that lie ahead are likely to be further cross-industry investment in the sector and greater consolidation in Canada and the US, a possible reform of federal regulation (SAFE Banking Act and other broader legislation) that will remove the 280E taxation and the Trade with higher taxes could enable exchanges for MSOs as well as the widespread use of credit cards for cannabis purchases), steps to enable cannabis research, the introduction of MMJ in Germany, Mexico and Australia, and further advances in South America and possible legalization of adult use in Israel and Mexico , new legal cannabis implementations in AZ, MT, NJ and SD as well as MMJ implementations in Virginia and soon also in Mississippi and West Virginia, possible legalization by legislation in CT, DE, FL, MD, MN, NH, NM, NY , PA, RI and VA and implementation of the commercial VT program in 2022.
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Alan is based in Houston and leverages his experience as the founder of the online community 420 Investor, the first and largest due diligence platform focused on publicly traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan is always looking for new ways to connect the industry and fuel its sustainable growth. At New Cannabis Ventures he is responsible for content development and strategic alliances. Before focusing on the cannabis industry in early 2013, Alan worked as an independent research analyst in 1986 after spending over two decades in research and portfolio management. Alan is a prolific writer with over 650 articles published since 2007 on Seeking Alpha where he has 70,000 followers. He is a frequent speaker at industry conferences and a frequent source for media such as the NY Times, Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | E-mail
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In this article:
Apha, Aphria, Canopy Growth, CGC, Charlottes Web, CRON, Cronos Group, Cura, Curaleaf, Curlf, CWBHF, CWEB, FAF, Feuer, Feuer und Blume, Floof, Flower One, Flwff, FONE, Green Thumb Industries, GrowGeneration, GRWG, gtbif, Gti, gtii, HARV, Crop Health and Recreation, HRVSF, IIPR, Indus Stocks inds, indxf, Innovative Industrial Real Estate, kshb, KushCo Holdings, spwrf, Supreme Cannabis, tcnnf, Tilray, TLRY, TRULo, health trulieve., Vire , Vreo, Vreof, weed