Cannabis sector performance
Despite President Donald Trump signing the 2018 Farm Bill on December 20, which legalized hemp at the federal level, the cannabis sector was under pressure last week. The Horizons Marijuana Life Sciences Index ETF (HMMJ), which tracks the North American Medical Marijuana Index, fell by 11.0%, while the ETFMG Alternative Harvest ETF (MJ) declined by 11.2%.
The Federal Reserve’s rate hike led to a sellout in the broader equity market with the S&P 500 Index falling by 7.1% last week. The weakness in the broader equity market has also contributed to a fall in the cannabis companies’ stock prices.
The returns of all ten stocks considered for our analysis in this series have been negative in the last week. The week was very tough on Origin Agritech (SEED), VIVO Cannabis (VVCIF), and Acreage Holdings (ACRGF) with declines of 21.0%, 20.5%, and 21.0%, respectively.
During the same period, the stock prices of Curaleaf Holdings (CURLF), Green Organic Dutchman Holdings (TGODF), Trulieve Cannabis (TCNNF), iAnthus Capital Holdings (ITHUF), and MedMen Enterprises (MMNFF) have fallen 11.1%, 18.6%, 10.0%, 12.9%, and 11.2%, respectively.
During the last week, Northland Capital Holdings initiated coverage on Planet 13 Holdings (PLNHF) with a “buy” rating with a price target of 3.75 Canadian dollars, which appears to have supported the company’s stock price. Also, Wayland Group’s board had announced last week that the company had started the process of exploring various strategic alternatives including a spin-off and a European listing of its international operations to enhance shareholders’ value.