Marijuana Index Fell 9% in April as US and Canadian Stocks Sell Off

Marijuana Index Fell 9% in April as US and Canadian Stocks Sell Off

Pixabay / Pix1861 / CC0 Public Domain

By Dan Nicholls

 
The North American Marijuana Index, a stock index that tracks the top performing cannabis stocks in the United States and Canada, decreased 9% in April due primarily to heavy losses in the United States. The month was highlighted by the introduction of Canada’s new recreational cannabis legalization laws on April 13, 2017.

The North American Marijuana Index is a combination of the U.S. Marijuana Index and the Canadian Marijuana Index.
 

U.S. Marijuana Index

The U.S. Marijuana Index decreased 11% in April, with 16 of its 20 constituents posting losses for the month. The broader U.S. market saw slight gains with the Dow Jones Industrial Average and Russell 2000 both ending the month up 1%. Overall, the U.S. Marijuana Index is down 16% so far in 2017.

The U.S. Marijuana Index saw a small increase of 1.5% on the last day of the month after Colorado Gov. John Hickenlooper said that he doesn’t expect the Department of Justice to crack down on state-legal marijuana businesses based on his recent discussions with Attorney General Jeff Sessions.

Six constituents on the U.S. Marijuana Index lost more than 20% during the month. Only two constituents increased more than 20% for the month: Solis Tek Inc. (OTQB:SLTK) and Americann Inc. (OTCQX:ACAN).
 
United States Marijuana Index April 2017
 

Canadian Marijuana Index

The Canadian Marijuana Index got off to one of its best starts in recent months, increasing by nearly 24% in the first week of April and reaching an all-time high of 359.19 on April 10, as investors poured in to the market in anticipation of the Canadian government’s introduction of adult-use cannabis legalization on April 13. Constituents on the Canadian Marijuana Index, excluding Canopy Growth Corporation (TSX:WEED), averaged more than $10 million USD from April 10-11, the two highest trading days in the last five months.

The Canadian Marijuana Index fell substantially after the peak on April 10 as investors sold off in the wake of the government’s announcement, ending the month with a modest loss of 4%. This compares to a 1% decrease in the S&P/TSX Venture Composite Index, Canada’s leading small-cap index. The Canadian Marijuana Index is up 3% year-to-date after posting gains in January and February.
 
Canadian Marijuana Index April 2017
 
For more information on April’s results, please click the link below for a downloadable PDF: Marijuana Index – April 2017 Summary Report.
 

Dan Nicholls, CFA, is Vice President of the MJIC Marijuana Index.

Guest Contributor designates a writer who is guest publishing content with MJINews.

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