Tilray Best Performer Among Canadian Cannabis LPs, Stocks Plunge Nearly 10% In July

Canadian cannabis stocks took a beating In July, with the Canadian Cannabis LP Index posting a 9.8% loss while continuing the declining streak, which was slightly interrupted by a 1% gain in June.

The index, which saw a 30.1% drop in 2020, grew 13.6% over the past year. Year-to-date, the index is up 17.8%.

Still, it's not even near the all-time closing high of 1314.33 of Sept. 2018. After posting a new 52-week closing low of 196.10 in March 2020, it closed 65.3% above that level at the end of last month.

The index includes 38 qualifying publicly traded Canadian companies divided into three sub-indexes, including Canadian Cannabis LP Tier 1 Index (3  companies), Canadian Cannabis LP Tier 2 Index (15 companies) and Canadian Cannabis LP Tier 3 Index (20 companies).

The index, which is rebalanced each month, requires companies to have a price of at least CA$0.20 ($0.16) except if they are generating at least CA$2.5 million quarterly from their cannabis production operation.

Tier 1

The three largest Canadian LPs, by revenue, that are generating at least CA$25 million per quarter include are Aurora Cannabis ACB ACB, which was the worst performer at -22% followed by Canopy Growth Corporation WEED CGC and Tilray Inc TLRY TLRY which dropped 18.6%.

In July, Tier 1 declined 20.6% to 558.85. Year-to-date, it improved 14.3% from 488.96 at the end of 2020.

Tier 2

Decibel Cannabis Company Inc. DB DBCCF topped the list of Tier 2 companies with a 7.8% gain in July. HEXO Corp. HEXO HEXO was down 31.3%, ending the month as the worst performer among companies that generate cannabis-related quarterly sales between CA$5 million and CA$25 million.

Overall, the Canadian Cannabis LP Tier 2 Index declined 10.0% in July to 503.90, up 38% compared to the end of 2020.

Tier 3

Among the 20 qualifying LP with cannabis-related quarterly sales less than CA$5 million are Pure Extraction Technologies PULL PRXTF, which emerged as the strongest performer, gaining 62.5% in July.  Neptune Wellness NEPT NEPT fell 29.9%, making it the worst performer overall.

Over the last month, the Canadian Cannabis LP Tier 2 Index closed at 70.26, sinking 8.0%, despite a 5.5% year-to-date improvement.

Cannara Biotech Inc. LOVE LOVFF, which uplisted to the TSX Venture from the Canadian Stock Exchange in April, will be included in Canadian Cannabis LP Index for August as the 39th company, after reporting revenues of $7.2 million in the third quarter of 2021.

Photo: Courtesy of M. B. M. on Unsplash