420 Investor Weekly Review 08/05/22

Review

Illinois adult-use cannabis sales lifted 7% sequentially to $135.7 million, up 6.% from a year earlier. Hifyre July data predicts that the month will be a record for sales in Canada, up 7% sequentially from June.

I distributed this written material to 420 Investor subscribers during the week:

Here are some of this week's highlights for Focus List names:

  • AYRWF introduced its LIT cannabis brand (premium flower) in Massachusetts.
  • CCHWF introduced a cannabis loyalty mobile app in 14 markets.
  • CGC named a former Aphria veteran as new Chief Legal Officer. It generated C$110.1 million revenue in fiscal Q1, but it had a massive loss due to a write-down.
  • GDNSF launched cannabis-infused gummies in Minnesota.
  • GNLN will conduct a 1-20 reverse-split on 8/9 to retain its NASDAQ listing.
  • GRWG reported a weaker-than-expected Q2, with revenue down 44% from a year ago to $71.1 million despite the M&A it has closed since then.
  • GTBIF reported a solid quarter ahead of expectations with revenue increasing 5% sequentially to $254.3 million in Q2.
  • HYFM pre-announced Q2 substantially lower than what was expected and reduced its outlook for 2022.
  • IIPR reported Q2 revenue at a record of $70.5 million, up 44%. AFFO per share was up $2.14, up 30%.
  • PLNHF announced a purchase option for an Illinois dispensary for the 51% owned by Frank Cowan.
  • SMG experienced a weak fiscal Q3 for revenue and updated its FY22 outlook for EPS of $4.00-4.20.
  • TCNNF opened a Trulieve dispensary in Arizona, its first there. It also opened another in Florida.
  • TLRY named Southern Glazer's as its CBD beverage distributor in the U.S. It also announced a deal with the Denver Broncos for its Breckenridge Distillery limited-edition Mile High Bourbon Blends.
  • VRNOF opened a new medical cannabis dispensary in Maryland, its fourth there. The company also opened its 54th in Florida.

There were comments in over 140 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 fell a bit during the week despite overall market strength, decreasing 0.8% to 15.27, still up from the all-time low close of 14.76 set 6/30:

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 July, it rallied 4.3%:

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 $213,935, up 0.3% during the week. . 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 27.3% in 2022. The model portfolio has increased 2040% since inception. Flying High has 8 positions and no cash. During the week, I exited an MSO and added to two MSOs. I also trimmed a Canadian LP and added to an existing ancillary name.

420 Opportunity, which rose 19.3% in July, ended the week at $50,508, up 0.1%. 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 lost 0.8% during the week. In 2021, the model lost 13.8%, while the index decreased 26.0%, and it is down 44.4% in 2022 compared to the index loss of 53.5%. The model portfolio has gained 1.0% since inception, while the overall market has declined by 98% during that time-frame. The model maintains 16 holdings and 0.5% cash. The three largest holdings include CEAD/CEADW (12.3%), AYRWF (9.77%) and AAWH (8.7%). During the week, I trimmed MAPS and added to GNLN.

420 Quality, which was funded with $50,000 (paper) on 3/1/17 and was up 20.4% in July, ended the week at $71,025, up 0.1% this week. In 2021, the model portfolio lost 21.8% compared to the 26.0% loss in the index. In 2022, it has returned -44.0% 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 42.2%, while the index has lost about 81%. The model has 17 holdings and 0.3% cash. The largest positions include CEAD/CEADW (11.4%), AYRWF (9.9%) and OGI (9.8%). During the week, I trimmed MAPS and added to GNLN. I also sold UGRO and added a new position in TRSSF.

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.

  • Monday: Curaleaf hosts a Q2 call after the close.
  • Tuesday: A BUSY day, with 22nd Century Group, Acreage Holdings, AFC Gamma, Charlotte's Web, Chicago Atlantic, Cronos Group, MariMed and Village Farms hosting morning calls and Hydrofarm and WM Technology hosting calls after the close.
  • Wednesday: Agrify, Akerna, NewLake Capital and Trulieve report in the morning.
  • Thursday: ALEAF reports in the morning, and CEA Industries, Clever Leaves, Forian, Glass House Brands, IntelGenx, Leafly, Schwazze and TerrAscend report after the close.
  • Friday: Nova Cannabis hosts its 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 05, 2022 — 4:08 PM
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