William Sumner
After a rocky start at the beginning of the year, the North American Marijuana Index is starting to show some signs of a recovery. The index, which tracks the top performing cannabis stocks in the United States and Canada, tumbled precipitously in January of this year after the Department of Justice announced that it would rescind the Obama-era Cole Memorandum, which provided guidance for the legal cannabis industry to avoid coming under the scrutiny of federal prosecution.
Companies hoping to become listed on the North American Marijuana Index must have a market cap of at least $80 million, a minimum daily trading volume of $2 million, and a share price of at least $1.00. Companies with a revenue of $5 million are exempt from the trading criteria.
In the month of April, the North American Index gained 3%, led primarily by the huge gains in the U.S. market. The U.S. Marijuana Index gained approximately 19% in April; six companies on the index gained 20% or more and another ten companies gained more than 10%.
The average trading volume on the U.S. Index also increased by 77%, compared to the previous month.
The gains were realized following news that former U.S. Speaker of the House John Boehner had reversed his position on medical cannabis and joined the advisory board of the medical cannabis company Acreage Holdings, which operates in 11 U.S. states, along with former Massachusetts Gov. Bill Weld. In the days the following Boehner and Weld’s announcement, the U.S. Index increased by 25%.
While the U.S. Marijuana Index was experiencing an upswing, the Canadian Marijuana Index was starting to get a taste for the downswing. Although recreational cannabis sales are set to become legal in Canada later this summer, the Canadian Marijuana Index decreased by 9%.
Likewise, the average trading volume of constituents on the Canadian Marijuana Index decreased by 16%. Approximately 80% of the companies listed are currently in the red, with only a few outliers outperforming expectations. Two such outliers were MedReleaf (LEAF) and WeedMD (WMD), which both gained 20% in April.
Unsurprisingly, the top three gainers in the month of April were companies listed on U.S. market while the top three losers were Canadian companies.
General Cannabis Corp. (CANN) led the pack with a 96% APR return and $4.5 million USD in trading volume. Following General Cannabis Corp. was CV Sciences (CVSI), which generated a 60% APR return and volume of $889,000. Rounding out the top three gainers was Surna Inc. (SRNA), which had a 31% APR return and a volume of $180,000.
For this month’s top three losers, Hiku Brands (HIKU) was hit the hardest with a -36% APR return and a volume of $1.2 million. Next was Isodiol International Inc. (ISOL), which had a -25% APR return and a volume of $3.1 million. In third place for the top three losers this month was CanniMed Therapeutics Inc. with an APR return of -21% and a volume of $1.3 million.
The most active cannabis company in April was Canopy Growth Corporation (WEED), with a volume of $117 million and an APR return of -11%. The second most active cannabis company was also Canopy’s closest competitor: Aurora Cannabis (ACB). Aurora had an APR return of -13% and a volume of $69.3 million. The biopharmaceutical company GW Pharmaceuticals (GWPH) was the third most active in April, with an APR return of 18% and a volume of $65.4 million.
