OUR 9TH YEAR OF PROVIDING PROPRIETARY CAPITAL MARKETS INTELLIGENCE ON THE CANNABIS / HEMP / PSYCHEDELIC SECTORS
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Chart of the Week
Chart of the Week
The Viridian Capital Chart of the Week highlights key investment, valuation and M&A trends taken from that week’s Deal Tracker that we believe are impactful for investors, companies and acquirers.
Week ended 07/26/2024
Viridian Capital Chart of the Week: MSO Prices and Volumes Fail to Rally on Harris or DEA Events
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- The Viridian Chart of the Week looks at the percentage changes in stock prices and average daily dollar volume from the week ended 7/19/24 to the week ended 7/26/24.
- The green bars (measured on the left axis depict the percent price change from 7/19/24 to 7/26/24. The graph is arranged in increasing order of percentage price changes.
- The orange bars (measured on the right axis) show the percentage change in average weekly dollar volume for the week ended 7/26/24 compared to the week ended 7/19/24.
- The week had two major news stories: Joe Biden’s exit from the Presidential race and the end of the DEA comment period on rescheduling.
- Most analysts, ourselves included, believed that both of these events were solidly positive for cannabis. Harris is thought to have a much better chance of beating Trump and is also considered to be a staunch cannabis advocate.
- Similarly, the comment period for rescheduling ended, and reportedly, over 90% of the comments were pro-rescheduling. The industry worked its way into another Twitter firestorm over how rescheduling was on its way any day now.
- Given these events, it seemed reasonable to expect a significant uptick in trading volume, propelling prices sharply higher.
- But this is cannabis, where well-founded theories and expectations go to die. The average price increase percentage for the group was 0.2%, and the aggregate average daily trading volume was down nearly 14%. Six of the 14 companies had price declines, and 9 of the 14 had lower average dollar volume.
- What went wrong? Cannabis investors have been burned too many times and are unwilling to bet on speculation. Will Harris be positive for cannabis? Who knows? It depends a lot on her winning, right? Similarly, no news is not good news when it comes to cannabis regulatory/legislative events. We’ll believe it when we see it.
- Still, despite the lackluster reception, we continue to be bullish. No other sector offers the catalyst-driven capital appreciation potential that cannabis does. Just don’t expect this market to behave like you expect it to!
