Predicting stocks in the cannabis market isn’t as easy as it might seem to be

For a trio of online sources, their top three investment picks for the month failed to deliver dazzling results in the first week of September.

cannabis market top three three picks

Photo by Rick Proctor/Unsplash

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These days, some folks think they can separate the flower from the stalk in the multibillion-dollar cannabis market. For example, Benzinga’s top three recommended cannabis stocks for September are Hemp Inc., KushCo Holdings Inc., and Innovative Industrial Properties. The latter is actually a real-estate investment trust serving the medicinal cannabis industry.

Along a similar vein, Keith Speights offered his own three picks for the month on the Motley Fool website. He chose Green Thumb Industries, GrowGeneration, and, like Benzinga, Innovative Industrial Properties.

And Investopedia’s Matthew Johnston’ recommended Village Farms International Inc., Harvest Health & Recreation Inc., and Aphria Inc. shares for September.

Only two of these eight companies reside in Canada. And only one can claim to be a pure-play Canadian cannabis stock.

That’s because Delta, B.C.–based Village Farms International grows tomatoes, cucumbers, and peppers in addition to cannabis.

Leamington, Ontario–based Aphria produces of cannabis oil, not veggies. And it has a market capitalization of $1.72 billion.

So, how did companies on these top three lists fare with investors over the past week? Aphria shares fell 2.6 percent to close on Friday (September 4) at $5.98. It was hardly a world-beating stock.

Village Farms International shares tumbled 8.7 percent, closing the week at $6.84. Its market cap stands at $388.8 million.

In this week’s cannabis market, the clear winner was Aphria. However, the results aren’t going to cause its shareholders to host any celebrations.

Cannabis market responds poorly to most U.S. picks

Meanwhile, the best of the recommended U.S. cannabis stocks over five days was Harvest Health & Recreation.

The Tempe-based company’s shares only rose a measly 2.5 percent, closing at $1.65 on the Canadian Securities Exchange. It’s worth $216.3 million.

But that still gave it the gold medal among the assorted top three picks highlighted above.

Compared to shareholders in Harvest Health & Recreation, investors in Innovative Industrial Properties Inc., endured a far more disappointing week. Of course, that’s been the norm for many companies in the cannabis market this year.

Innovative Industrial Properties’ share price fell 5.8 percent to close at US$117.72. Even with that decline, the San Diego–based company’s market cap remains at US$2.55 billion.

Things were even worse for medical-marijuana and cannabis producer Green Thumb Industries over the week.

The Chicago-based company’s stock sank by 8.1 percent to close at $18.21 on the Canadian Securities Exchange. It’s now worth $3.86 billion, making it the in the most valuable player of the eight recommended companies.

But that drop was exceeded by GrowGeneration Corp.’s 10.4 percent fall over five days of trading. It was the worst of the week among the various top three recommendations.

The Denver company’s stock closed the week at US$14.24 on NASDAQ, leaving it with a market cap of US$671.24.

This goes to show that cannabis market can be a cruel world. And that’s notwithstanding what the enthusiasts might write before any month beings.

There’s still time for a rebound

Meanwhile, KushCo Holdings Inc. had a few ups and downs before closing the week where it started on Monday at US$0.57. Traded on the OTC, the Cypress, California–based company’s market cap stands at US$71.22 million.

The weakest player on the top three lists, Hemp Inc., fell 6.5 percent over five days to dip to US$0.0043 on the OTC. That makes this Las Vegas company’s stock price lower than a snake’s belly in the Nevada desert.

There are still more than three weeks to go in September. So it’s still too early to count out the forecasters. But to date, the results have been less than overwhelming.

But then again, Apple and Tesla shares hit some turbulence this week—demonstrating that the pain wasn’t only confined to the cannabis market.

Charlie Smith

I'm the editor of the Georgia Straight newspaper in Vancouver, as well as a CannCentral contributor.

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