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 02/02/2024
Viridian Capital Chart of the Week: Who’s Been Left Out of the Rally?
- The MSOs have experienced dramatic stock price gains, with the MSOS ETF up 45.6% YTD and up 108.4% from before the HHS announcement.
- The chart shows the YTD percentage stock price gains in the top 15 MSOs (green bar measured on left axis), and we have also calculated the percentage gain in dollar trading volume for the last two weeks compared to the previous two weeks (orange line measured on right axis).
- We are generally suspicious of significant price moves in cannabis stocks not ratified by an uptick in trading volume.
- An indicator of the overall price/volume strength of the rally was created by rank ordering the percentage stock gains and the percentage volume gains and multiplying these two ranks. A stock with one of the top percentage price gains and one of the top percentage volume gains would rank highly. The chart is arranged in order of this index, with the companies on the left having the strongest price/volume gains.
- Calculating the volume gains based on the last two weeks compared to the previous weeks understates the sharp increase in volumes many of these stocks experienced in the last week. Schwazze (SHWZ: OTCQX), Cresco (CL: CSE), Jushi (JUSHF: OTCQX), TerrAscend (TSND: TSC), and Green Thumb. (GTII: CSE) all had over 100% dollar volume gains last week versus the previous week.
- Several top MSOs have underperformed in the rally. GTI and CBST had two of the group’s lowest price and volume gains. Planet 13 had the lowest index of price gains and volume gains.
- Investors should be cautious of stocks like Ascend (AAWH: OTCQX), which has greater-than-average share price gains but declining volume.
