Marijuana Stocks Lost Momentum in April


Since the beginning of 2019, cannabis stocks have seen a massive resurgence in prices. During Q4 2018, shares of almost every marijuana company saw its shares tumble, struggling to live up to the post-legalization hype surrounding the industry.

Since then, however, cannabis stocks have seen a dramatic comeback, with Q1 2019 seeing a 57.4 percent recovery on average, as measured by the Global Cannabis Stock Index. However, this momentum was lost in April, as global cannabis stocks ended up stumbling around 1.5 percent this month.

The Global Cannabis Stocks Index, ran by New Cannabis Ventures, tracks 64 major cannabis stocks around the world. Additionally, they also track a number of other indexes for Canadian and American cannabis companies.

Looking at the long-term results of these companies, the index has declined around 54.9 percent in 2018 thanks to the dramatic Q4 decline. Since then, the index has rallied over 66 percent since the lowest point of last year, December 24th, with year-to-date gains compared to last April still at a reasonable 55 percent increase.

There were six companies represented in the index which saw increases of over 20 percent in the month of April. Endexx (OTC: EDXC), also known as CBD Unlimited, is a small company trading in the OTC market that saw a 64 percent increase, with shares up as much as 1250 percent over the past four months.

The company mainly produces CBD-infused soft chew products for dogs to treat symptoms of pain, inflammation, and anxiety, while also offering CBD-teas and other accessories.

Both Valens GrowWorks (CSE: VGW) and MediPharm Labs (TSXV: LABS) jumped up 57.5 and 56.8 percent respectively over the course of the month. As better-known companies listed on larger exchanges than Endexx, most would consider these two the biggest “mainstream” winners in the cannabis sector this month. Other companies that saw big gains in April included Neptune Wellness Solutions (TSX: NEPT), 22nd Century Group (NYSE American: XXII), and SLANG Worldwide (CSE: SLNG), which all increased by 28.2, 28.1, and 21.5 percent respectively.

While there were only six companies that gained over 20 percent last month, there were eight that fell by more than 20 percent. Westleaf (TSXV: WL) was the biggest loser for April, sliding down 58 percent as a record number of short sellers were selling shares of the company. 48North Cannabis (TSXV: NRTH) and India Globalization Capital (NUSE American: IGC) fell 35.6 percent and 30.3 percent each, with the latter having a lengthy history of trouble among mainstream exchanges. Agraflora Organics (CSE: AGRA),SOL Global Investments (CSE: SOL), Cannex Capital (CSE: CNNX), and Aleafia Health (TSXV: ALEF) also fell between 20 and 26 percent.

The last big loser for the sector this month was a surprising one. Tilray (NASDAQ: TLRY) fell 21.7 percent this month, a substantial decline for a company that previously has had an extremely lofty (if not outright overpriced) valuation. Some analysts have recently downgraded the companies target price as shares continue to tumble.

While the Global Cannabis Stock Index fell 1.5 percent, this wasn’t equally distributed across the U.S. and Canada. While the Canadian index fell only 0.9 percent, the American Cannabis Operator Index fell a much larger 4.4 percent.