Statistics Canada has released December retail sales for the country, with Cannabis sales are on the rise from November levels, up 5.3% to C$503.7 million, a new monthly record high. This sequential increase was up 1.9% on a daily basis due to more days than in the previous month. November, originally reported at C$477.9 million, was revised slightly higher to C$478.4 million. December sales rose 2.9% from a year earlier, up from 8.3% in May, 7.5% in June and 6.2% in September. This was also below the 20.3% growth rate in August 2023 and better than the previous lowest annual growth since the start of legalization, which started at -0.9% in September 2024 and then -1.6% in October due to the BC strike, and it was down significantly from the 9.1% growth in December 2024. The previous record level in August was only 1.8% above the previous year’s level. Total sales are expected to increase by 4.5% to C$5.39 billion in 2024 and by 4.1% to C$5.62 billion in 2025.
An increase in the number of shops, as well as a fall in the prices of flowers that attract consumers from the illegal market, have boosted sales. In Ontario, the most populous province, sales rose 6.5% from November but fell 4% from a year earlier. Alberta was up 5.7% from November, but down 1% from last year. British Columbia was up 5.2% from November and 22% from a year ago, while Quebec was down 1.6% from November and 10% from a year ago.
January sales data will be released on March 20.
Based in Houston, Alan leverages his experience as an online community founder 420 Investorthe first and still the largest due diligence platform focused on publicly traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. time New Cannabis Ventureshe is responsible for content development and strategic alliances. Before turning his attention to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst with more than two decades of research and portfolio management experience. A prolific writer, with over 650 articles published since 2007 Looking for Alphawhere he has 70,000 followers, Alan is a frequent speaker at industry conferences and frequent source Media including the NY Times, Wall Street Journal, Fox Business and Bloomberg TV. Contact Alan. Twitter: |: Facebook |: LinkedIn: |: El
You are reading this week’s edition of New Cannabis Ventures, a weekly magazine we have published since October 2015. The newsletter includes unique insight to help our readers stay ahead of the curve, as well as links to the most important news of the week. We no longer email them like we used to, but post this and all newsletters on our website here.
friends,
Hemp stocks peaked in early 2021 after a rally in 2020, but have been on a downward trend since then. That 2020 rally was pretty big from the depths of the post-pandemic lows, but the Global Hemp Stock Index is up just 5.2% that year overall. Since then, it has fallen from 44.39 on 12/31/20 to 5.26 currently, a decline of 88.2%. The index was at 100 as of 12/31/12 and has fallen over 94% since then. Only in 2026, the decline was 20.2% year-on-year. What a terrible storm this has been.
I wrote about 280E tax at the end of 2022, naming its potential elimination as one of them two great cannabis catalysts potentially, and another could be exiting the OTC for US hemp companies. Although none of these have happened, the 280E taxation could be abolished if the hemp reclassification takes place. The president issued a decree, but there is no timetable.
These stocks have risen over the past year, but they have fallen significantly since the 2024 election. Hemp stocks certainly look cheap by most standards, but for some, the risk remains that their balance sheets will be left in a very bad shape. A number of companies have already surrendered to debt holders, such as 4Front, Ayr Wellness, Cannabist, Gold Flora, MedMen, Schwazze and Tilt Holdings, but others will have to refinance their debt. I have called Curaleaf out on their massive debt and they have recently extended some of it, although the debt level remains quite high. There are other MSOs that are also facing challenges with their debt.
280E taxation remains a big issue for US hemp operators, but it’s not really a problem for Canadian LPs operating in Canada or around the world. Not only are they not subject to 280E taxation, they trade on NASDAQ and not OTC. However, these stocks are also in a bear market. My model portfolio of 420 Investor currently has 42.8% exposure to Canadian LPs and only 10.3% exposure to MSOs. The Global Hemp Stock Index, recently recalculated on 3/31, currently has 25.8% exposure to MSOs and 29.1% exposure to Canadian LPs.
What I like about Canadian LPs is that they have potential exposure in Europe and Australia, as Canada is a fairly mature market. Canada, which does not have a 280E tax, has a very high tax on cultivation. Maybe that will change. In any case, that market has started to consolidate, with acquisitions and license cuts. However, there are many outstanding licenses (1,002, including 110 pending removal due to suspension, cancellation or expiration). These stocks trade at or below tangible book value. Some of them are subject to 280E end of taxation through their investments.
Here’s the past half-year’s action in the seven Canadian LPs currently in the Global Hemp Stock Index:
All have fallen and two have lost more than half their value. During this period, MSOS is down 23.2%, and the Global Cannabis Stock Index is down 31.5%.
US hemp stocks have been linked to potential realignments and possible elimination of 280E taxation, but those may not happen. Cannabis-backed companies would benefit from helping their clients, but most Canadian LPs are not subject to the US. Hopefully this bear market will end soon. Happy Easter and Passover everyone!
Sincerely,
Alan:
This week’s newsletter is sponsored by the Paul E. Saperstein Co.
Michigan Uniform Commercial Code (“UCC”) Article 9 Sale
On April 7, Monster Holdings Group’s equipment will be auctioned at the Jackson County Circuit Court in Jackson, Michigan at 9:00 a.m. ET. All applications must be submitted online. Learn more Article 9 of the sale of all assets of this mining company.
Interested parties may contact Paul Cotto at 617-227-6553 or email pcotto@pesco.com:.
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Based in Houston, Alan leverages his experience as an online community founder 420 Investorthe first and still the largest due diligence platform focused on publicly traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. time New Cannabis Ventureshe is responsible for content development and strategic alliances. Before turning his attention to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst with more than two decades of research and portfolio management experience. A prolific writer, with over 650 articles published since 2007 Looking for Alphawhere he has 70,000 followers, Alan is a frequent speaker at industry conferences and frequent source Media including the NY Times, Wall Street Journal, Fox Business and Bloomberg TV. Contact Alan. Twitter: |: Facebook |: LinkedIn: |: El
Statistics Canada released January retail sales for the country, with Cannabis sales are declining from December levels, down 8.4% to C$466.1 million, an all-time monthly high. The sequential decrease increased by the same 8.4% on a daily basis due to the same number of days compared to the previous month. December, originally reported at C$503.7 million, was revised slightly higher to C$508.6 million. December sales rose 6.4% from a year ago, up from May’s 8.3% and June’s 7.5%, but better than the previous lowest annual growth since legalization began in September 2024 of -0.9% and -1.6% in October due to the BC strike. Growth was much slower in December at just 3.9%. Total sales are expected to increase by 4.5% to C$5.39 billion in 2024 and by 4.1% to C$5.62 billion in 2025.
An increase in the number of shops as well as a fall in the prices of flowers that attract consumers from the illegal market have boosted sales. In Ontario, the most populous province, sales fell 8.6% from December and 4% from a year ago. Alberta was down 4.7% from December, but up 1% from a year ago. British Columbia was down 9.5% from December but up 31% from a year ago, while Quebec was down 12.5% from December but up 29% from a year ago.
February sales data will be released on April 24.
Based in Houston, Alan leverages his experience as an online community founder 420 Investorthe first and still the largest due diligence platform focused on publicly traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. time New Cannabis Ventureshe is responsible for content development and strategic alliances. Before turning his attention to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst with more than two decades of research and portfolio management experience. A prolific writer, with over 650 articles published since 2007 Looking for Alphawhere he has 70,000 followers, Alan is a frequent speaker at industry conferences and frequent source Media including the NY Times, Wall Street Journal, Fox Business and Bloomberg TV. Contact Alan. Twitter: |: Facebook |: LinkedIn: |: El
Statistics Canada has released November retail sales for the country, with Cannabis sales are on the rise up 6.6% from October levels to C$477.9 million. This sequential increase is up 10.2% on a daily basis, driven by fewer days compared to the previous month. October, originally reported at C$451.7 million, was revised slightly lower to C$448.5 million. It was hit by a strike in British Columbia in October. Sales rose 4.6% in November from a year earlier, up from 8.3% in May, up from 7.5% in June and 6.2% in September. This was also lower than the 20.3% growth rate in August 2023 and better than the lowest growth rate in the previous year since the start of legalization, which started at -0.9% in September 2024 and then -1.6% in October due to the BC strike, and it was significantly down from the 9.1% growth in December. August’s record level was only 1.8% higher than last year’s index. Total sales are expected to grow 4.5% to C$5.39 billion in 2024 and 4.2% year-to-date in 2025.
An increase in the number of shops, as well as a fall in the prices of flowers that attract consumers from the illegal market, have boosted sales. In Ontario, the most populous province, sales fell 5.2% from October and 3% from a year ago. Alberta was down 5.5% from October and 2% from a year ago. British Columbia, which was down 55.0% sequentially in October and 54% year-over-year, was up 250% sequentially in October and 9% year-over-year, while Quebec was down 4.1% in October and 31% year-over-year.
December sales data will be released on February 20.
Based in Houston, Alan leverages his experience as an online community founder 420 Investorthe first and still the largest due diligence platform focused on publicly traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. time New Cannabis Ventureshe is responsible for content development and strategic alliances. Before turning his attention to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst with more than two decades of research and portfolio management experience. A prolific writer, with over 650 articles published since 2007 Looking for Alphawhere he has 70,000 followers, Alan is a frequent speaker at industry conferences and frequent source Media including the NY Times, Wall Street Journal, Fox Business and Bloomberg TV. Contact Alan. Twitter: |: Facebook |: LinkedIn: |: El
