Marijuana stocks continue to falter this year, with the Canadian Cannabis Index trying to recover after dropping nearly forty percent from its peak on January 9. Meanwhile, the United States continues to battle the legality of cannabis, leaving marijuana stocks in the U.S. in limbo. Perhaps 2018’s biggest surprise is that pot stocks can report positive growth at all in this fickle market.
Cannabis stock investors are also feeling the stress. With the Toronto Stock Exchange dropping over fifty points last week, it looks like cannabis’ unpredictability is becoming the most significant risk in the marijuana stock market.
Still, investors can protect themselves with a little research. These are the four worst performing marijuana stocks of 2018 (so far):
While not the worst marijuana stock on the market, Namaste Technologies (OTC:NXTTF) does not have much to brag about these days. The company continues to be bogged down with the development of their online portal NamasteMD, which is slated to be a success —but only once it is up and running.
In the meantime, the second quarter of 2018 saw marijuana stock losses double for the company with shares falling eighteen percent. More than that, Namaste more than doubled their outstanding shares this year, jumping from 114 million to 246 million through a series of bought-deal offerings.
It may be too early to tell, but this kind of dilution may be enough to keep a wise cannabis investor at bay.
Emerald Health Therapeutics
Another victim of dilution is Emerald Health Therapeutics (TSX:EMH) (OTC:EMHTF). Emerald may have the potential to produce over 75,000 kilograms of cannabis annually by 2020 with their Pure Sunfarms venture, but this marijuana stock needed to fund this venture before producing a single ounce.
Funding came from bought-deal offerings, which, again, diluted shares. The market responded in kind with steadily dropping marijuana stock prices throughout the summer. Stock prices are now two-thirds of what they were in January.
With a market cap of only $300 million, Emerald is considered a small-cap pot stock. Cannabis investors can take a risk and bet on the upcoming 225,000 square foot facility or stay away from the diluted shares by investing in one of these new facilities instead.
With a market cap well over $2 billion, it is hard to see MedMen Inc. (CSE:MMEN) (OTCQB:MMNFF) among the worst marijuana stocks, but their reputation may be their downfall. PotNetwork recently reported on MedMen’s distasteful treatment of their dispensary employees.
If that is not enough to inspire second thoughts, the company is also looking at over $40 million in losses so far this year, mostly due to the expenses related to the opening a new dispensary in Las Vegas as well as their new acquisitions in Florida. But Forbes reported last month that this “aggressive” positioning as the dominant American pot stock is what led to their alienating debut prices on the Canadian Securities Exchange earlier this year.
Even company founders Adam Bierman and Andrew Modlin took notice and changed their executive compensation to reflect MedMen’s stock prices. It will be up to cannabis investors to decide if this recent move was just a little too late.
Corbus Pharmaceuticals’ (NASDAQ:CRBP) marijuana stock prices dropped over seventeen percent this year due to time constraints. Their latest cannabis-based drug, Lenabasum, could prove effective against cystic fibrosis, systemic lupus, and systemic scoliosis. But no one will know until 2020.
The company’s phase 2 and 3 trials are not due until the first half of 2020, putting them leagues behind the likes of GW Pharmaceuticals (NASDAQ:GWPH) and other pharmaceutical companies who have already earned FDA approval. For cannabis investors not willing to play the waiting game, Corbus is one pot stock to avoid.