Healthy Cannabis Market on the Rise Sees Q2 Index Rises 20% after Q1 fell 21%
New York City – July 12, 2018 /AxisWire/ The Green Market Report (GMR), the cannabis industry’s most trusted source for credible in-depth financial and economic reporting, today released its 2018 Cannabis Company Index Q2 Summary Report. The report can be downloaded at GreenMarketReport.com/Reports.
The GMR Index follows the trading activity of 30 selected public cannabis companies that denote market dominance. After falling 21.9% in the first quarter, based on uncertainty surrounding the Department of Justice (DOJ) and Attorney General Jeff Sessions decision to rescind the Cole Memo, the GMR Index found that the industry made a healthy recovery. On average, the GMR Index gained 20% in the second quarter of 2018.
In Q2, investors felt that the risk to investing in cannabis had been tempered once it was clear that the DOJ was more talk than action when it came to punishing those in the cannabis industry. In addition, conservative Republicans at both the federal and state level began to demonstrate a willingness to shift away from their hardline anti-cannabis stances of the past and confirmed a willingness to discuss a pathway towards legalization.
However, the most encouraging move of all was the Federal Drug Administration’s (FDA) approval of GW Pharmaceuticals cannabis-based drug Epidiolex. Epidiolex is derived from cannabidiol, or CBD, an active, non-psychoactive chemical compound in marijuana that reduces the frequency of seizures. Per the FDA’s approval of the CBD-based drug, the FDA has 90 days to reschedule CBD down to Schedule II or III from Schedule I.
“The second quarter of 2018 has been much kinder to cannabis industry stocks as share prices recovered from the sell off at the beginning of the year. Bigger and stronger cannabis companies are listing on the Canadian markets and on major U.S. stock exchanges which are giving investors more selection and choice,” stated Debra Borchardt, CEO of Green Market Report.
The best performing stock in the GMR Index was CV Sciences Inc. which rose 238% as it reported strong revenue increases and retired debt. This rise was a pattern followed by many of the other stocks in the GMR Index. Solid performances were rewarded by shareholders picking up more stock.
The biggest loser in the GMR Index was Isodiol International with a loss of 55% in its share price. Many of the Index’s poorest performing stocks are some of the earliest cannabis stocks in the market. Early investors, likely growing weary of stock dilution, are turning to new and stronger entrants into the cannabis publicly traded stock market.
Like these investors, the GMR Index is opting to include new names that have much to offer versus older companies that haven’t been able to deliver as promised. For example, 22nd Century Group primarily focuses on tobacco and not cannabis so it was removed; Invictus MD Strategies was removed due from the GMR Index due to poor performance.
The Green Organic Dutchman and MedMen Enterprises both show that despite setting out on differing business objectives, their ability to raise millions in the market has put them in a position to experience continued growth. While The Green Organic Dutchman is pursuing an international strategy, MedMen is focusing on the high trafficked tourist locations in the U.S. GMR is looking forward to watching these companies grow and mature.
“Looking ahead to the third quarter, expectations are running high that a change of some sort could be imminent in regards to the classification of cannabis in the Controlled Substances Act.” added Borchardt. “While we can’t predict what that change will be, it will easily be an improvement over the current situation. Also, there are a number of strong cannabis companies in the IPO pipeline, meaning that Q3 will be a tremendously exciting time as they enter the market.”
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