The Cannabis PubCo Goldilocks Conundrum📈

2 mins read

Not too big, not too small

New Cannabis Ventures, the investor insights and information portal run by Alan Brochstein, has been tracking cannabis public companies since before Day 1. This week, New Cannabis Ventures noted that smaller Canadian companies – those with <$25 million in quarterly cannabis sales – are being credited with a 19% increase in the Canadian Cannabis Producer Stock Index in February. (The Index is a selection of 36 publicly-traded companies chosen by New Cannabis Ventures that reflect the overall value of Canada’s cannabis market.)

Smaller, but mighty

The Index is split into three tiers: 

  • Tier 1: $25+ million in quarterly cannabis sales (Canopy, Aurora, Aphria, HEXO) 
  • Tier 2: Sales between $5-$25 million/quarter
  • Tier 3: Sales of <$5 million/quarter

While Tier 1’s Aphria rallied by 46%, the most impressive gains were held by smaller players in Tiers 2 and 3 in February. The biggest winners in Tier 2 were WeedMD (up 77%) and Organigram (up 68%). In Tier 3, Indiva had the biggest gains (up 71%).

Not so high, not so low

After a tough and volatile year, the Canadian Cannabis Producer Stock Index as a whole is up by 37% in February and 50.6% year-to-date in 2021. It’s nowhere near the all-time high in September 2018, but Brochstein noted that it’s also nowhere near March 2020’s all-time low. 

What’s next

The March 2021 Index will include 39 companies, including three new Tier 3 companies: Experion, GTEC and Rapid Dose Therapeutics. With global domination top of mind for most of these companies, we’re not discounting anyone in the Index – especially the ones that are just the right size.

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