The North American Marijuana Index saw unprecedented gains in 2017, as cannabis stocks soared throughout the year in anticipation of 2018’s broader market for cannabis legalization. Beginning the year with 27 constituents, the Index rebalanced itself midway through 2017, ending up with 35 constituents by December. Those numbers include 17 constituent companies on the United States Index and 18 on the Canadian Index. After gaining 5 percent in January, the Index took a downturn for the next few months, ending the first quarter with a loss of 1 percent. By summer a full-fledged free-fall began to affect the Index, based mostly on news of Canadian adult-use legalization laws. To date, June saw the Index down 25 percent. After the aforementioned rebalancing, fall brought better news to the Index, which began a steady incline. Still, September year-to-date had the Index down 21 percent. November turned everything around, as the Index had its hottest month on record. The sharp increase brought the Index back into the black, up 16 percent and rising at it heads into the new year.
United States Index
It was a tough year for the United States Marijuana Index as state-level marijuana legalization clashed with federal prohibition. With Jeff Sessions taking over his new role as U.S. Attorney General, all eyes turned to the Department of Justice to see where marijuana policy would head in 2017. Unfortunately, for now, the answer is still unknown. By March the U.S. Index was down 6 percent. A terrible April and May saw the Index decline 25 percent, before flatlining in June due to some outsized gains by three companies. Year-to-date at that point the Index was down 29 percent. In September U.S. companies on the Index split, with half showing increases and the other half posting losses. According to MJIC who runs the Index, U.S. constituents saw a 16 percent decline in volume that month, compared to a 127 percent gain in volume for Canadian constituents. A red-hot November, with increases of 27 percent, still could not bring the Index out of the red, leaving at a 21 percent loss year-to-date at that point. Nevertheless, The United States Marijuana Index is following an upward trend into the New Year.
The anticipation of cannabis legalization in Canada has caused a small cannabis stock frenzy up north in recent months. At least three companies have reached market caps well over $2 billion. After gaining 17 percent in the first two months of the year, the Canadian Marijuana Index fell 8 percent in March, but still held a 7 percent gain for the first quarter. Meanwhile, a terrible spring for cannabis on both sides of the border, buoyed by the Canadian government's announcement of its adult-use legalization laws saw the Index fall in April, May, and June to significant lows. By the end of the second quarter, the Index posted a 21 percent loss. Momentum returned in the fall, as 13 companies on the Index gained more than 10 percent, causing the Index itself to rise 13 percent. A historic month of November saw the Canadian Marijuana Index increase 52 percent for the month - the best month on record - to bring the Index up to a 58 percent gain for the year. The Index continues to rise as it heads into the new year.
Winners and Losers
Namaste Technologies Inc. (N:CNX) had one of the best years on the Index, gaining almost 274 percent. By November the company was trading at $0.99 per share with a market cap of $183 million. Aurora Cannabis Inc. (ACB:CA) was right behind, having gained 248 percent over the year. The company was trading at around $8.00 per share in the November Index report, with a market cap of $3 billion. U.S. company Solis Tek Inc. (SLTK) gained 245 percent by the end of November, trading at $1.76 with a market cap of $52 million.
Emblem Corp. (EMC:CA), a cultivation and retail company was down 57 percent this year. The company share price was $1.63 in the November report, with a market cap of $117 million. CV Sciences Inc. (CVSI) fell 46 percent in 2017, trading at only $0.23 per share. The company’s market cap is $20 million. Even though they have been rising recently, MPX Bioceutical Corp. (MPX:CNX) fell 43 percent this year. The company was trading at $0.50 per share with a market cap of $129 million.