Stocks, in general, are experiencing their worst January since 2008, and this is weighing heavily on the cannabis sector as measured by the New Cannabis Ventures Global Cannabis Stock Index, which is down over 18% to begin the year. Cannabis stocks are generally speculative, and speculative assets have been hit the hardest over the past four weeks: For cannabis stocks, 2022 is looking like 2020 four weeks into the year, with a prior downtrend extending. In Q4, the Global Cannabis Stock Index dropped 27%, and it has declined 18.4% in January thus far. Compared to the peak last February, the market has now dropped 69.9%. A decline of 21% in Q4 of 2019, related to the vaping crisis, was followed by a 5.2% decline in January 2020. When the market hit bottom in March of 2020, it had dropped 83.9% from its peak in March 2019. While this decline is somewhat less in magnitude, it has been extreme, with a similar time frame. It’s unrealistic to expect cannabis stocks won’t struggle further if the overall market continues to sell off aggressively, but we believe that some cannabis companies will fare better than others, if so.
New Cannabis Ventures, 01/30/2022 11:08:00