420 Investor Weekly Review 07/29/22

Review

The House passed a medical cannabis research bill that may be also approved by the Senate.

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

I was interviewed at Seeking Alpha again on the Cannabis Investing Podcast:

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

  • AYRWF opened its 49th Florida dispensary and its 9th in Pennsylvania.
  • CGC introduced new premium flower offerings from its 7ACRES and Doja subsidiaries.
  • CURLF launched Plant Precision, a curated collection of edibles and a topical gel designed to target specific wellness categories. It also opened its 51st dispensary in Florida.
  • JUSHF opened its 3rd Virginia dispensary in Alexandria.
  • PLNHF received a Conditional Adult Use Dispensing Organization License in the Chicago-Naperville-Elgin region from the Illinois Department of Financial and Professional Regulation.
  • STHZF, formerly HBORF, cut a deal with the IRS that sharply reduces its obligations for 280E taxes.
  • TLRY reported a sequential increase in revenue but a decline in cannabis revenue. It posted a large write-off as a restructuring charge and guided adjusted EBITDA for FY23 below expectations.
  • TRSSF opened its 3rd New Jersey dispensary in Lodi. It is the state's first drive-through.
  • VFF expanded its Pure Sunfarms brand into northern and Atlantic Canada.
  • VRNOF again stated it was going to restate previous financials (lower taxation and increase stock compensation expense for 2021 and 2022-Q1). It opened its 53rd Florida dispensary in Port Charlotte. It was also approved for adult-use at its Zen Leaf Neptune in New Jersey.

There were comments in over 120 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 sharply during the week despite overall market strength, decreasing 4.6% to 15.40:

The index, which lost 26% in 2021 following a 5.2% gain in 2020, is down 53.1% 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 ended the week valued at $213,346, up 21.7% in July and down 4.7% 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 27.5% in 2022. The model portfolio has increased 2033% since inception. Flying High has 9 positions and 0.1% cash. During the week, I exited two ancillary names and added two MSOs.

420 Opportunity ended the week at $52.252, up 19.3% in July and down 3.5% during the week. 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 4.6% during the week. In 2021, the model lost 13.8%, while the index decreased 26.0%, and it is down 44.5% in 2022 compared to the index loss of 53.1%. The model portfolio has gained 0.9% since inception, while the overall market has declined by 98% during that time-frame. The model maintains 16 holdings and no cash. The three largest holdings include CEAD/CEADW (11.6%), AYRWF (10.0%) and MAPS (10.0%). During the week, I sold PLNHF and added to OGI and added a new position in IIPR.

420 Quality, which was funded with $50,000 (paper) on 3/1/17, ended the week at $71,025, down 3.1% this week and up 20.4% in July compared to the index's 4.3% gain in July and 4.6% loss during the week. . In 2021, the model portfolio lost 21.8% compared to the 26.0% loss in the index. In 2022, it has returned -43.8.0% compared to the index return of -53.1%. 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 42.1%, while the index has lost about 81%. The model has 17 holdings and 0.3% cash. The largest positions include CEAD/CEADW (10.89%), AYRWF (10.2%) and MAPS (9.8%). During the week, I sold PLNHF and added to OGI and added a new position in IIPR.

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: Scott's Miracle-Gro hosts a Q3 conference call in the morning and Green Thumb Industries hosts a Q2 conference call after the close
  • Thursday: After releasing a press release on Wednesday after the close, Innovative Industrial Properties hosts a call mid-day to discuss its Q2. GrowGeneration hosts a Q2 call after the close.
  • Friday: Canopy Growth hosts a Q1 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 Jul 29, 2022 — 6:07 PM
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