The cannabis sector’s performance in June remained lackluster, a continuation of the trend that has been going on since March this year. However, YTD, the sector returns remain on solid footing with gains that beat the broader market indexes such as the TSX 300 Composite Index and the S&P 500 Index.
As the above chart shows, all four cannabis sector ETFs delivered a negative return in June. The Emerging Marijuana Growers Index ETF (HMJR) declined the most with a loss of almost 21% in June alone. This ETF also experienced negative returns in May with a decline of 14% and in April with a decline of 3%. Similarly, the Evolve Marijuana ETF (SEED) lost 16% in June and 15% in May.
The situation wasn’t any different with the two other ETFs. The Horizons Marijuana Life Sciences ETF (HMMJ) lost 14% in June, while the ETFMG Alternative Harvest ETF (MJ) lost about 11% in June. Both these ETFs lost 13% each in May. Since these ETFs have overlapping investments, the same underlying stocks impact each of the ETFs.
In comparison, the S&P 500 Index lost only 1% in June and 7% in May, while the TSX 300 Composite Index lost 2% in June and 3% in May. The weakness in the cannabis sector is a result of recent earnings releases. Canopy Growth (WEED) (CGC) lost about 20% in June, while Aurora Cannabis (ACB) lost about 16%. Similarly, HEXO (HEXO) also declined after its earnings with a loss of 32% in June.