Strong sentiment in the cannabis sector pushed ETFs and stocks into positive territory last week. The Horizons Marijuana Life Sciences ETF (HMMJ) closed 4.4% higher, while its US-listed counterpart, the Horizons Marijuana Life Sciences Index ETF (HMLSF), rose 4.8%. Similarly, the Emerging Marijuana Growers Index ETF (HMJR) rose 4.3%, and the Evolve Marijuana ETD (SEED) rose 2.5% between its close on May 4 and its close on May 11.
Aphria (APHQF) was among the biggest gainers last week with a rise of 16.5% to 11.4 Canadian dollars, followed by CannTrust (CNTTF), which rose 11.6% to 9.4 Canadian dollars, and Hydropothecary (HYYDF), which rose 10% to 4.9 Canadian dollars.
MedReleaf (MEDFF) was also among the top gainers last week with a 6.9% increase to 24.9 Canadian dollars, followed by Organigram (ORGMF), which gained 5.9% to 4.3 Canadian dollars. Supreme Cannabis (SPRWF) gained 5.3% last week to close at 1.6 Canadian dollars, while Cronos (CRON) closed almost 3.7% higher at 7.8 Canadian dollars last week.
Emerald Health (EMHTF) saw some of the smallest gains at 2.4% and closed at 4.6 Canadian dollars, followed by Canopy Growth (WEED), which closed 1.1% higher at 30.3 Canadian dollars. Aurora Cannabis (ACB) closed almost 50 basis points higher at 8.1 Canadian dollars.
With the positive movement last week, let’s see how these cannabis stocks performed YTD (year-to-date). YTD, most of the cannabis stocks remained in the negative territory with Aphria returning -43% and Supreme Cannabis returning -41%. Aurora Cannabis was down 32%, and Emerald Health declined by 30%. Cronos was down 23%, while MedReleaf was down 8% and Canopy Growth was down by 6% YTD. Of the stocks in the above chart, Hydropothecary is the only one with a positive YTD return of 11%.
In this series, we’ll discuss the valuation multiples of the above cannabis stocks.