Review

The SAFE Banking measure was removed from inclusion in the National Defense Authorization Act. Connecticut announced the opening date for retail cannabis sales as January 10th.

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

• 420 Investor Weekly Review 12/02/22
  

• 420 Investor Model Portfolio Composition 12/02/22

• Cannabis Sub-Sector Review - 12/02/22

• An Investing Disaster I Avoided

• MSOs And MSOS Hammered!

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

• ACB repurchased US$76.1 million in debt for US$73.8 million.
• CCHWF opened its sixth Virginia medical cannabis dispensary.
• CRLBF added its 21st Florida medical cannabis dispensary in Orlando.
• GDNSF named Josh Rosen as Interim President. Its COO departed.
• GNLN named Lana Reeve as CFO.
• JUSHF priced $69 million of 12% debt with 16 million warrants at $2.086 to redeem 10% debt.
• PLNHF announced that it was approved for a consumption lounge in Las Vegas.
• TCNNF launched Khalifa Kush Cannabis in Pennsylvania and in Maryland.
• TLRY launched Peppermint Phatty 510 vape in Canada.
• TRSSF converted about $120 million of Canopy Growth debt to stock at about 2X the current price.

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 90 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 was slammed lower this week to 12.18, ending down 17.7% for the week. This was a lot worse than the 3.4% loss in the S&P 500, which is down 3.6% in December. The cannabis index has dropped 10.9% in December, and it has rallied 8.2% thus far in Q4. This is less than the 9.7% return in the S&P 500.

The index, which lost 26% in 2021 following a 5.2% gain in 2020, is down 62.9% 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 $157,888, down 13.9% during the week. It has gained 7.4% 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 46.3% in 2022. The model portfolio has increased 1479% since inception. Flying High has 7 positions and 0.5% cash. During the week, I exited an MSO to add to an ancillary position, I trimmed three ancillary positions to add another one and sold the rest of one of the ancillary positions to add to another one and add back the MSO that I had exited earlier in the week. I also trimmed an ancillary name and added an LP.

420 Opportunity, which fell 15.2% in Q3, ended the week at $38,219, down 16.0%, which was better than the Global Cannabis Stock Index. It is up 6.4% in Q4. 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 down 17.7% during the week. In 2021, the model lost 13.8%, while the index decreased 26.0%, and it is down 57.9% in 2022 compared to the index loss of 62.9%. The model portfolio has lost 23.6% since inception, while the overall market has declined by 98% during that time-frame. The model maintains 13 holdings and 0.1% cash. The three largest holdings include HYFM (10.8%), AAWH (10.7%) and MAPS (10.6%). During the week, I trimmed TRSSF on Monday to add to AAWH. On Tuesday, I reduced GNLN to add to HYFM and TRSSF. I also reduced SBIG to add to OGI. On Wednesday, I reduced CEAD to add a new position in VRNOF and to add to GNLN. On Friday, I trimmed MAPS and added to AAWH and AYRWF.

420 Quality, which was funded with $50,000 (paper) on 3/1/17 and was down 14.8% in Q3, ended the week at $53,013, down 16.1% this week. It has rallied 5.4% in Q4, which is behind the index. In 2021, the model portfolio lost 21.8% compared to the 26.0% loss in the index. In 2022, it has returned -58.0% compared to the index return of -62.9%. 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 6.0%, while the index has lost 84.9%. The model has 13 holdings and 0.2% cash. The largest positions include HFYM (10.8%), MAPS (10.5%) and AAWH (10.0%). During the week, I trimmed TRSSF on Monday to add to AAWH. On Tuesday, I reduced GNLN to add to HYFM and TRSSF. I also reduced SBIG to add to OGI. On Wednesday, I reduced CEAD to add a new position in VRNOF and to add to GNLN. On Friday, I trimmed MAPS and added to AAWH and AYRWF.

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.

• Tuesday: Fire & Flower reports its Q3 and hosts a call before the market opens.
• Friday: Enwave reports its Q4 and hosts a call during trading hours.

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