Review

Illinois released both adult-use and medical cannabis data for October, with sales of $160 million, up 0.8% sequentially and 3.1% from a year ago. BDSA data for September suggested that sales remained weak in most markets.

I distributed this written material to 420 Investor subscribers during the week:

• 420 Investor Weekly Review 10/28/22

• 420 Investor Model Portfolio Composition 10/28/22

• Cannabis Sub-Sector Review - 10/28/22

• Previews of Quarterly Financials for Cronos Group, GTI, IIPR and Scotts Miracle-Gro

• 420 Investor Newsletter - Volume 9, Edition 11

Here are some of this week's highlights for Focus List names:

• AAWH launched Miss Grass products in New Jersey.
• AYRWF announced two new stores in Florida and the availability of LEVIA there.
• CCHWF announced the sale of assets in three states to Sean Combs, a move that helps its deal with Cresco Labs to close.
• CRLBF announced the sale of assets in three states to Sean Combs, a move that helps its deal with Columbia Healthcare to close.
• CURLF opened its third New Jersey store for adult-use sales.
• CWBHF has partnered with Tilray Brands in Canada for distribution of CBD products.
• GNLN announced an agreement with Leaf Trade to increase its B2B visibility. It also closed the $7.5 million capital raise.
• GTBIF reported revenue in Q3 of $261 million, up 3% sequentially and 12% from a year ago. Both revenue and adjusted EBITDA of $84 million were ahead of expectations.
• IIPR Q3 revenue grew 32% from a year ago to $70.9 million.
• JUSHF relocated its Scranton dispensary in Pennsylvania.
• LOWLF appointed two new independent directors to its Board.
• PLNHF announced the location of its pending dispensary in Illinois.
• SMG reported growth at Hawthorne Gardening sequentially in its Q4.
• UGRO closed the $6.1 million acquisition of DVO Engineering.
• VRNOF launched BITS, a new low-dose edible.

Please check the Focus List, (which has technical, fundamental and valuation ratings as well as a market-cap table). To help track market caps, we maintain tables for the Canadian LPs and the American cannabis operators and ancillary companies.

There were comments in over 120 discussions in the Forum. Don't miss out on this most informative part of 420 Investor! Not familiar with the the Forum? This video will help! This is a great way to track your favorite tickers, even those not on the Focus List, and to get your questions answered quickly.

Market Performance

The Global Cannabis Stock Index remained above its all-time closing low of 11.26 from 9/30. It rose to 12.72 this Friday, lifting 1.4% during the week. This was much better than the 3.2% loss in the S&P 500, which is down 2.5% November. The cannabis index has dropped 3.5% this month-to-date, slightly more than the decline in the S&P 500, and it has rallied 13.0% thus far in Q4. This is more than double the 5.4% return in the S&P 500.

The index, which lost 26% in 2021 following a 5.2% gain in 2020, is down 61.3% in 2022. It currently includes 28 stocks and ended 2021 at 32.85. In September it was down 25.9%, and it was down 23.7% in Q3:

For perspective, the index, which began 2013 at 100, bottomed in August 2013 at 70 after a prior peak of 220 in February 2013 and peaked in 2014 at 1010. The long post-2014 decline ended in February 2016, with the market soaring at the beginning of 2018 to levels not seen since 2014. We took out the 2016 lows by a wide margin in early 2020 and then soared into 2021 before reversing. We made a new all-time low at the end of September:

Model Portfolios

Flying High, down 16.1% in Q3, ended the week valued at $164,908, up 1.6% during the week. It has lost 3.5% in November and has gained 12.2% in Q4 thus far. This model portfolio was launched on 9/23/13 with $10,000 (paper), and it ended 2013 at $18,225, 2014 at $15,702, 2015 at $9608, 2016 at $49,568, 2017 at $112,891, 2018 at $161,346, 2019 at $165,249, 2020 at $252,409 and 2021 at $294,249. The year-to-date gain was 16.6% in 2021, and the model portfolio is down 44.0% in 2022. The model portfolio has increased 1549% since inception. Flying High has 8 positions and no cash. During the week, I trimmed and then exited an MSO and a Canadian LP. I also trimmed an ancillary name and another MSO. I added a new position in two ancillary names and added to another one. I also added a new position in an MSO. I trimmed one of the new ancillary names I bought and added again to another one. I also trimmed a bit further one of my MSO positions and added to an ancillary that I had reduced during the week.

420 Opportunity, which fell 15.2% in Q3, ended the week at $41,573, down 0.1%, which was worse than the Global Cannabis Stock Index. It has lost 4.6% in October, a bit worse the index. This model portfolio, which was funded with $50,000 (paper) on 4/8/14 and ended 2014 at $17,105, 2015 at $11,418, 2016 at $44,915, 2017 at $91,407, 2018 at $94,616, 2019 at $77,715, 2020 at $105,373 and 2021 at $90,823, has a goal of being fully invested and outperforming the market as measured by the 420 Investor Cannabis Stock Index, which gained 1.4% during the week. In 2021, the model lost 13.8%, while the index decreased 26.0%, and it is down 54.2% in 2022 compared to the index loss of 61.3%. The model portfolio has lost 16.9% since inception, while the overall market has declined by 98% during that time-frame. The model maintains 15 holdings and 0.4% cash. The three largest holdings include MAPS (10.0%), TRSSF (8.8%) and GRWG (8.5%). During the week, I reduced AAWH on Monday and added a new position in SMG. On Tuesday, I reduced HYFM and added to AYRWF. I also reduced BMMJ and added to LOWLF. On Wednesday, I reduced CEAD and added to SMG. I sold the balance of BMMJ and added more AYRWF and TRSSF. On Thursday, I reduced OGI and added a new position in UGRO. On Friday, I trimmed OGI and added to HYFM.

420 Quality, which was funded with $50,000 (paper) on 3/1/17 and was down 14.8% in Q3, ended the week at $57,622, down 0.2% this week and down 5.1% in November thus far. It has rallied 14.4% in Q4, far ahead of the index. In 2021, the model portfolio lost 21.8% compared to the 26.0% loss in the index. In 2022, it has returned -54.4% compared to the index return of -61.3%. It ended 2017 at $109,480, 2018 at $119,053, 2019 at $113,123, 2020 at $161,504 and 2021 at $126,323. To learn more about the model portfolio, which is longer-term focused, please read the description I posted before launch. Since inception, the model has gained 15.2%, while the index has lost 75.6%. The model has 15 holdings and 0.3% cash. The largest positions include MAPS (9.9%), HYFM (8.8%) and GRWG (8.7%). During the week, I reduced AAWH on Monday and added a new position in SMG. On Tuesday, I reduced HYFM and added to AYRWF. On Wednesday, I reduced CEAD and added to SMG. On Thursday, I reduced OGI and added a new position in UGRO. I trimmed OGI and added to HYFM.

Calendar

As a reminder, 420i posts a calendar for your convenience, as does New Cannabis Ventures. NCV also posts a separate calendar for conference calls.

• Monday: Cronos Group reports its Q3 and hosts a call in the morning, and Curaleaf, GrowGeneration and WM Technology report their Q3s and host calls in the afternoon.
• Tuesday: MariMed hosts a call for its Q3 before the open, Acreage, AFC Gamma and Nova Cannabis host calls for their Q3 during trading hours and 22nd Century Group hosts a call after the close.
• Wednesday: Agrify, Aleafia Health, Chicago Atlantic and Village Farms host Q3 calls before the market opens, Canopy Growth (Q2) and Charlotte's Web (Q3) host calls during trading hours, and Clever Leaves, Hydrofarm, Lowell Farms, Schwazze and Trulieve host Q3 calls after trading.
• Thursday: Ayr Wellness hosts its Q3 call in the morning, NewLake Capital Partners hosts its Q3 call during trading, and Ascend Wellness, Aurora Cannabis, Glass House Brands, IntelGenx Technologies, Planet 13 Holdings, Silver Spike Investment and urban-gro host Q3 calls after the close.

Companies with fiscal years ending in August (July for Canadian Venture stocks that don't file with the SEC) must report their annual financials in November. Companies with years ending in March, June or December must file their quarterly reports by mid-November (or by late November for Canadian-listed stocks that aren't on the TSX or NEO or filing with the SEC).