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It seems the losing streak continues for the Canadian Cannabis LP Index for the sixth month now, after declining 13.5% in December to 194.95, New Cannabis Ventures writes.
After a 1% gain in June, the index retreated nearly 27% in the third quarter.
The index, which fell 30.1% in 2020 to end at 275.16, dropped 26% in the fourth quarter and 29.2% for all of 2021.
In addition, it remains considerably below the all-time closing high of 1314.33 in September 2018. A new multi-year closing low of 196.10 was recorded in March 2020.
The index includes 25 qualifying publicly traded cannabis companies that traded in Canada at the end of October. The companies are divided into three sub-indexes, including Canadian Cannabis LP Tier 1 Index (5 companies), Canadian Cannabis LP Tier 2 Index (8 companies) and Canadian Cannabis LP Tier 3 Index (12 companies).
The index, rebalanced each month, requires companies to have a price of at least CA$0.20 ($0.16) unless they are generating at least CA$2.5 million quarterly from their cannabis production operations.
The overall index will have 24 constituents for January, as Village Farms has delisted from the TSX.
Tier 1
The five largest Canadian LPs, by revenue that generate at least CA$30 million per quarter were Aurora Cannabis Inc. (TSX:ACB) (NASDAQ:ACB), Canopy Growth Corp.(TSX:WEED) (NASDAQ:CGC), HEXO Corp (TSX:HEXO) (NASDAQ:HEXO), Tilray Inc. (TSX:TLRY) (NASDAQ:TLRY) and Village Farms International Inc (TSX:VFF) (NASDAQ:VFF).
Village Farms was the best performer within the group, which fell 5.1% to 402.42 in December. Over the last five years, the company’s stock has outperformed some of the most popular stocks globally, including Microsoft, Apple, Netflix and Facebook. In addition, Village Farm’s stock traded 0.86% higher at $6.47 per share at the time of writing.
The worst performer among the largest Canadian LPs was HEXO, declining 38%, followed by Tilray’s decline of 31%.
After a recent acquisition spree, which included Redecan and 48North Cannabis Corp., HEXO is looking to streamline its operations to core facilities as part of its ongoing integration plan. New measures under the strategic plan, dubbed “The Path Forward,” include: reducing manufacturing and production costs, streamlining and simplifying its organizational structure, realizing cost synergies, focusing on revenue management and accelerating growth through organic market share gains.
In its latest earnings report, HEXO revealed a wider loss of CA$116.9 million in the first quarter and CA$50.2 million quarterly sales. In November, former co-founder and CEO of the Ottawa-based company, Sebastien St-Louis, resigned from HEXO’s board of directors.
Tier 2
After losing 35.9% in 2020, the Canadian Cannabis LP Tier 2 Index closed at 365.19, only to continue dropping by 2.5% in 2021. In December, Tier 2 fell 15% to 302.79.
Among eight qualifying companies with cannabis-related quarterly sales between CA$7.5 million and CA$30 million, Indiva Limited. (TSXV:NDVA) (OTC:NDVAF) had the largest gain of 18% among the group, while The Valens Company Inc. (TSX:VLNS) (NASDAQ:VLNS) saw the largest decline of 27%.
The Canadian producer of cannabis edibles, Indiva, revealed a 143% year-over-year spike in gross revenue recently reaching CA$8.3 million in the third quarter, which was the company’s 7th consecutive quarter of year-over-year net revenue growth.
After debuting on Nasdaq Capital Market under the symbol “VLNS” in early December and announcing that it had entered into a CA$40 million secured non-revolving term loan with 2361380 Ontario Limited., Valens inked two agreements with Mexican drug supplier PMI Mexico – a subsidiary of Merger Group – to provide CBD Oil and prebiotic products and partnered with Montreal Cannabis Médical Inc. to provide manufacturing and extraction services for MTL’s pre-rolls and vapes.
Tier 3
Tier 3, which included the 12 qualifying LPs that report cannabis-related quarterly sales of CA$2.5-CA$7.5 million rose 0.4% as it closed at 53.35. After ending at 66.59 in 2020, it was down 19.9% in 2021.
The worst performance among this group was from Lifeist Wellness Inc. (CSE:LFST) (OTC:NXTTF), formerly Namaste Technologies, which dropped 25%. The best performer was Avant Brands (TSXV:AVNT) (OTC:AVTBF), which rose 25%.
Lifeist Wellness recently announced the launch of CELLF, a novel cellular therapeutic compound targeting systemic fatigue, via its biosciences and consumer wellness subsidiary, Mikra Cellular Sciences Inc.
Photo: Courtesy of Maxim Hopman on Unsplash
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