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- The SAFE Banking Act was passed in the House of Representatives.
- Michigan’s cannabis sales rose in March.
- Health Canada added 9 licenses.
- 420 portfolios of investor models have increased by 55.8 to 75.6% since the beginning of the year, while the Global Cannabis Stock Index has increased by 32.8%.
The SAFE Banking Act has been re-passed in the House of Representatives, but it is unclear when the Senate can vote on it. The Florida Supreme Court ruled against a 2022 election initiative to legalize adults. Ohio will more than double the number of pharmacies. Michigan cannabis sales rose 179% in March from March 2020 to $ 146 million.
Health Canada added 9 licenses, leaving a total of 657 licenses, including 10 that have expired, revoked or suspended.
During the week, I shared these insights with subscribers of 420 Investor:
- Fire & Flower Q4 financial forecast
- MSOs YTD
- Look at the pullback in the MSOs
- Vireo Health remains a valuable story a year later
- Composition of the model portfolio April 16, 21
- Review of the cannabis subsector – 04/16/21
I was also interviewed here:
Professional cannabis podcast
Here are some of this week’s highlights for 420 investor focus list names:
- APHA has issued shares valued at $ 53 million to Mastronardis, their joint venture partner at Aphria Diamond, in exchange for changes to the supply agreement
- CGC announced that Southern Glazer’s Wine & Spirits will distribute its CBD beverages in the United States
- CRON launched a branding campaign entitled “A Higher Order” for its Lord Jones CBD products
- CWBHF was given the opportunity to bring three proprietary CBD strains to Canada
- The FFLWF reached 250,000 members in its Spark Perks loyalty program
- FLOOF announced that it will be too late in its Q4 submissions. It has completed its financial restructuring.
- GRWG acquired Michigan’s Downriver Hydro hydroculture business, the 7th in the state, with annual sales of $ 10 million
- OGI launched two new high-THC strains under its Edison brand
- PLNHF has issued 4.1 million restricted shares to employees. On April 20, sales of $ 543,000 were reported.
- TCNNF opened its 80th and 81st pharmacies in Florida
- TRSSF acquired the 90% it didn’t own in three Keystone Canna Remedies Pennsylvania pharmacies for $ 63 million.
The Global Cannabis Stock Index sold heavily on April 20, but rebounded to close the week at 58.94, up 1.6%:
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. Until 2021 it had increased by 32.8% so far. It currently comprises 48 stocks and ended 2020 at 44.39:
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 $ 169,964, down 3.4%. The model portfolio, which grew by 61.3% in 2021, increased by 35.6% in 2020 and by 239.9% since April 2014. 420 Quality ended the week at $ 251,579, a 3.0% decrease for the week and a 55.8% increase in 2021 after a 42.8% increase The model was launched and straightened in March 2017 to long-term investors looking to invest in leading, low-portfolio-turnover cannabis stocks. Since inception, it is up 403.2% compared to a 27.1% decline in the index. Flying High, which is focused on swing trades, ended the week trading at $ 443,236, down 2.8%. The model portfolio grew by 52.7% in 2020 and increased by 75.6% in 2021. The return since inception at the end of 2013 has been 4332%.
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 2020. 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 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 have begun to stimulate government legalization efforts and more favorable regulatory scrutiny at the local level. Access to capital has improved dramatically, and the leading companies are generating large and rapidly growing sales and profits.
Several potential catalysts lie ahead, including the FDA clearing up CBD regulation, advances in Canadian legalization, which began in October 2018 and encompassing a broader range of products, and continued growth on German and Israeli MMJ and other international markets that have developed slowly. The adult implementations for California and Massachusetts have been slow to adopt, but are beginning to show major improvements. Michigan and Illinois were legalized for adult use 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 all approved adult legalization in November, and New Mexico, New York, and Virginia passed legalization through legislative process in 2021.
The big issues ahead are likely to be more cross-industry investment in the sector and greater consolidation in Canada and the US, as well as 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 MS, WV and VA, possible legalization through legislation in CT, DE, FL, MD, MN, NH, PA and RI and implementation of the commercial NM, NY, and VT programs in 2022 and VA in 2024.
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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 continues to seek 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 having worked in research and portfolio management for over two decades. 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 the media, including the NY Times, the 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, CRON, Cronos Group, FAF, fflwf, fire and flower, Floof, flower one, FONE, GrowGeneration, GRWG, OGI, organization chart, Planet 13, PLNHF, PLTH, tcnnf, TER, Terrascend, TRSSF , TRUL, trulieve, WEED