420 Investor Weekly Review 09/02/22

Review

Illinois adult-use cannabis sales fell 5% sequentially in August, rising 6% from a year ago, to $129.4 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:

  • AYRWF opened its relocated dispensary in Dania Beach, Florida.
  • CEAD adjourned its annual meeting to 10/6/22 due to lack of a quorum.
  • CRLBF opened an additional 3 Sunnyside medical cannabis dispensaries in Florida, leaving them with now 19 in the state.
  • JUSHF Q2 Revenue of $72.8 million was a bit ahead of expectations, but the profitability lagged and the outlook was reduced.
  • IIPR bought the Curaleaf cultivation facility in Massachusetts for $21.5 million and will lease it to the company.
  • LOWLF boosted its convertible note financing by $2.2 million to $6.4 million.
  • SMG reduced its free cash flow outlook for FY22 substantially and named an interim CFO.
  • TLLTF opened its third Massachusetts medical cannabis dispensary in Cambridge.
  • TLRY expanded its product offerings under the Good Supply brand.
  • UGRO announced the resignation of its COO and President, James Dennedy.
  • VRNOF opened three new stores in Florida, giving it 59 in the state.

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 130 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 4.0% during the week to 14.68, still holding its 52-week and all-time closing low of 14.36 . This was worse than the decline in the S&P 500 of 3.2%:

The index, which lost 26% in 2021 following a 5.2% gain in 2020, is down 55.3% in 2022. It currently includes 26 stocks and ended 2021 at 32.85. In August, it fell 1.3%, and it is down 0.5$ in Q3.:

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 and 3.9% in August, ended the week valued at $208,053, down 5.3% during the week and now up 18.7% quarter-to-date. 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 29.3% in 2022. The model portfolio has increased 1981% since inception. Flying High has 7 positions and 2.1% cash. During the week, I reduced an MSO on Monday, adding to an ancillary name. On Tuesday, I reduced that MSO again, adding to another MSO position. On Friday, I exited a Canadian LP and added a new position in an ancillary name.

420 Opportunity, which rose 19.3% in July and 1.6% in August, ended the week at $48,811, down 4.8% but still up 15.5% quarter-to-date. 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 4.0% during the week. In 2021, the model lost 13.8%, while the index decreased 26.0%, and it is down 46.3% in 2022 compared to the index loss of 55.3%. The model portfolio has lost 2.4% since inception, while the overall market has declined by 98% during that time-frame. The model maintains 17 holdings and 0.5% cash. The three largest holdings include OGI (8.8%), HYFM (8.6%) and AYRWF (8.4%). During the week, I reduced CRLBF on Monday, adding to HYFM. I also reduced AYRWF and added to SBIG. On Tuesday, I reduced AAWH and added to ACB. I also sold the rest of CRLFB, adding to VFF. On Friday, I reduced TRSSF and added to GRWG.

420 Quality, which was funded with $50,000 (paper) on 3/1/17 and was up 20.4% in July and 0.5% in August, ended the week at $67,576, down 5.3% this week and still up 14.5% in Q3. In 2021, the model portfolio lost 21.8% compared to the 26.0% loss in the index. In 2022, it has returned -46.5% compared to the index return of -55.3%. 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 35.2%, while the index has lost about 81.9%. The model has 16 holdings and 1.2% cash. The largest positions include OGI (9.6%), HYFM (8.4%) and AYRWF (8.3%). During the week, I reduced CRLBF on Monday, adding to HYFM. I also reduced AYRWF and added to VFF. On Tuesday, I reduced AAWH and added to ACB. I also sold the rest of CRLFB, adding to VFF. On Friday, I reduced TRSSF and added to GRWG.

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.

  • Wednesday: Weed Wednesday Chat at 8:30 ET

Companies with fiscal years ending in June (May for Canadian Venture stocks that don't file with the SEC) must report their annual financials in September. This includes ACB from the Focus List. Companies with years ending in January, April and October must file their quarterly reports by mid-September (or by late September for Canadian-listed stocks that aren't on the TSX or NEO or filing with the SEC). This includes FFLWF from the Focus List.

Posted to 420 Investor on Sep 02, 2022 — 5:09 PM
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