Cannabis stock report: Tumbling pot stocks send investors looking to international cannabis markets

Cannabis stocks fell like the Eagles in the second half on Tuesday as The North American Marijuana Index dropped to 104.76 for a loss of 0.41 points. It was a mixed bag on the markets with The United States Marijuana Index losing 0.26 points down to 49.59 while The Canadian Marijuana Index fared a bit better, gaining 0.02 points by mid-afternoon up to 188.01.

The NASDAQ had something to celebrate on Tuesday, with the exchange gaining 90.47 points up to 11,147.12 for an increase of 0.82 percent. Meanwhile, the NYSE hit 12,979.09, up 46.41 for a gain of 0.36 percent.

Marijuana Index

All eyes were on the international cannabis market on Tuesday, with New Zealand’s legalization referendum coming up on the horizon. According to a report in Marijuana Business Daily, the small country consumes upwards of 74,000 kilograms or 74 metric tons of cannabis through the illicit market every year. Experts at Wellington-based Business and Economic Research put a retail value on that amount of nearly 1.5 billion New Zealand dollars, or $1 billion US. 

The report was commissioned by New Zealand’s Ministry of Justice last year in an effort to determine how to implement regulations for a potential legal market. They were looking at things like the financial viability of legal cannabis industry enterprises, baseline market estimates, and post-legalization scenario modeling.

There were two documents produced. The first was called “Market structure for recreational cannabis,” and it looked at New Zealand’s illicit cannabis market. The second, titled “Evidence to inform a regulated cannabis market,” was a model of a potential legal market, according to Marijuana Business Daily.

$1.5 billion (NZ) uses a consumer price point of $20 per gram (NZ) and assumes that over 550,000 consumers buy cannabis in the illicit market.

“However, there are suggestions that regular and frequent users access cannabis at a noticeably lower per-gram price. If so, then this retail value figure is likely to be an overestimate,” the market structure report noted, according to Marijuana Business Daily.

Estimates show that the government expects to collect “$640 million (NZ) per year in excise taxes, based on about 50,000 kilograms in the commercial market that would be subject to the tax.”

“This is also based on sales in the commercial market comprising 72 percent. of low-strength THC potency, 23 percent. of medium-strength THC potency and 5 percent. high-strength THC potency,” BERL wrote, according to Marijuana Business Daily.

Cannabis stock winners and losers

Zenabis Global Inc. (ZENA: CA) ended the day at $0.10, a gain of $0.01 per share, or 11.11 percent. Meta Growth Corp. (META: CA) increased $0.01 per share up to $0.14, a gain of 7.69 percent. cbdMD Inc. (YCBD) jumped up $0.12 per share to $2.18, an increase of 5.83 percent.

Green Growth Brands Inc. (GGBXF) fell to $0.02051, a loss of $0.00474 per share or 18.77 percent. iAnthus Capital Holdings Inc. (ITHUF) fell $0.0117 per share down to $0.0679, a loss of 14.70 percent. Columbia Care, Inc. (CCHWF) fell to $3.61, a drop of $0.24 per share or 6.23 percent.

Charlotte’s Web sees revenue decline

Charlotte’s Web Holdings, Inc. (TSX: CWEB) (OTCQX: CWBHF) released financial statements for the second quarter ending June 30 on Tuesday. The company saw revenues decline 13 percent to $21.7 million. Moreover, they experienced an adjusted EBITDA loss of $5.7 million.

“Second quarter revenue was below expectations due to the impact of COVID-19 on retail sales. However, our DTC sales increased 33.6 percent, largely offsetting declines in B2B retail sales,” said Deanie Elsner, CEO of Charlotte’s Web in a statement. 

She continued: “We made excellent progress building out our infrastructure and expanding our products portfolio with the closing of the Abacus acquisition. Abacus CBD Medic products are now being sold through our online store and we look forward to realizing more cross-selling revenue synergies with Abacus through our FDM partners.”

In other cannabis stock news…

Why shouldn’t you buy Aurora Cannabis, the once-great cannabis company? For starters, according to Motley Fool, “its board gave the OK for the company to issue up to $350 million (that's in US dollars) in stock over a 25-month span to raise capital.” In six years, the company’s share count has gone from 1.3 million to 110 million. 

November is looking to be a big month for cannabis legalization efforts, with ballot measures set to give one-third of Americans access to legal weed

Speaking of legal weed and CBD, senior citizens love it. They really, really love it.

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