Cannabis Stock Report: Marijuana Index Gains 18 Percent, Green Market Report Launches Index, Evolve ETF Begins Trading Monday
January proved a volatile month for cannabis stocks across the sector, with U.S. Attorney General Jeff Sessions rescinding federal protections for state-level legalization and a cryptocurrency crash that led FOMO investors to rattle the marijuana markets. Still, despite mad money men and their cries of market speculation The North American Marijuana Index reported an 18 percent increase in January.
Sessions’ announcement sent the market into a slight panic in early January, but investors quickly bounced back as industry insiders took to the press to bring a sense of calm to their shareholders. Meanwhile, the opening of California’s adult-use market never really had a chance to take a foothold in the market, stymied by the Sessions’ announcement only four days into the new year. A quick bounce led to a rocky few weeks that many attributed to a pot stock correction.
The United States Marijuana Index followed this same pattern, gaining 13 percent on January 2, losing 21 percent following Sessions’ announcement, and climbing 11 percent again the following day. Wall Street had a relatively prosperous month, unaware of the storm to hit in February.
A New Kind Of Index
In January Benzinga reporter Javier Hasse broke the news of a new Index to make its way on the scene, The Green Market Report Index. Based on market cap, revenues, and operational standards, the new Index includes 30 publicly traded marijuana companies. Unlike many indices today, The Green Market Report chose to include only companies that focus solely on cannabis. According to Benzinga, Green Market Report CEO Debra Borchardt explained that companies such as Scotts Miracle-Gro Co. (NYSE:SMG) were excluded because the majority of their operations were outside the cannabis industry.
"Public companies are becoming the norm in the cannabis market," Green Market Report co-founder Cynthia Salarizadeh told Benzinga. "The companies that the Green Market Report have curated for the index are the ones that we feel are the most dominant in the cannabis industry. Not only did we review the market capitalization, but we also took a hard look at revenues and liabilities to assemble an index of the strongest possible names to follow as an indicator for the overall market."
A full list of companies included in The Green Market Report Index can be found here.
Planting Some SEED
Joining the club is Evolve Funds Group Inc. who announced on Friday the filing of their final prospectus in advance of launching the Evolve Marijuana ETF. The fund received conditional approval to trade on the TSX beginning Monday, February 12 under the ticker symbol SEED.
A fund for Canadian investors Evolve plans to invest in “a diversified mix of equity securities of issuers that are involved in the marijuana industry.”
Evolve investments will include business in the medical and recreational sectors, both at home in Canada and in international markets. The fund will consist of companies that have direct involvement with the marijuana plant, as well as ancillary cannabis businesses.
"We believe the international cannabis industry is poised to exceed $30 billion by 2021, which would be a 60 percent compounded annual growth rate in the next few years," commented Raj Lala, President and CEO of the fund. "The next wave of growth could be driven by the globalization of the industry. Active management in SEED allows us to capitalize on these opportunities."
In celebration of the launch of the Evolve Marijuana ETF, Lala will help to open the Toronto Stock Exchange on Monday morning.