A Promising Start for Cannabis Investors
The year 2024 has dawned with a flourish for cannabis investors. The once volatile cannabis stock market is now radiating a promising green glow, indicating a bullish surge. This uptrend signals a significant shift in the cannabis investment landscape.
Water Tower Research Sheds Light on Market Dynamics
Water Tower Research (WTR) has captured this momentum in its latest report, providing a comprehensive overview of the substantial gains and emerging trends shaping the cannabis market. This report is a beacon for investors seeking insights into the future potential of cannabis investments.
Robust Growth in Cannabis Stocks
The early months of 2024 witnessed an impressive upswing in cannabis stocks. The US cannabis MSOS ETF soared by 13.12%, while the global YOLO ETF rose by 9.11%. This growth spurt is attributed to the positive market sentiment fueled by the anticipated reclassification of cannabis by the DEA, following a recommendation from the Dept. of Health and Human Services.
Leading the Charge: Top Performers
During this rally, certain companies stood out with exceptional performance. Jushi (JUSH/JUSHF) witnessed a remarkable jump of 34.78%. The Cannabist (CBST/CBSTF) and Cresco (CL/CRLBF) weren't far behind, with gains of 34.50% and 32.03%, respectively. AYR (AYR/AYRWF) also enjoyed a significant rise of 23.89%.
Steady Growth Among Consistent Performers
While the high flyers grabbed headlines, less leveraged operators that consistently generate cash flow showed more modest but stable increases. Green Thumb Industries (GTII/GTBIF) rose by 5.40%, Verano (VRNO/VRNOF) by 8.93%, and MariMed (MRMD/MRMD) by 1.89%.
The Impact of DEA's Review
The week's rally gained additional momentum from news of the DEA's ongoing review of cannabis as a Schedule I drug. This review came shortly after the HHS recommended rescheduling to Schedule III in late August. Jesse Redmond, WTR's managing director for the cannabis sector, pointed out that “US cannabis continues to outperform Canadian and other global names due to the positive sentiment driven by the potential for the DEA to agree with the HHS’s Schedule III recommendation."
A Look at Notable Earnings
Agrify (AGFY), despite a 5.17% decline, reported a noteworthy 4.98% gain this week. Their financial turnaround was significant: year-over-year revenue decreased from $7.0 million to $3.1 million, but gross profit shifted from a $4.1 million loss to a $1.0 million gain. A reduction in operating expenses, primarily in general and administrative costs, was a key contributor to this improvement.
Conclusion
The early surge in 2024's cannabis stock market paints a hopeful picture for the future of cannabis investments. With the anticipated DEA reclassification, the industry is poised for even greater growth and stability. For investors and industry observers alike, the green glow on the horizon is a sign of exciting times ahead in the cannabis market.