Review

Canada reported October cannabis sales of C$389 million, up 9.5% from a year ago and the slowest annual growth to date.

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

• 420 Investor Weekly Review 12/16/22

• 420 Investor Model Portfolio Composition 12/16/22

• Cannabis Sub-Sector Review - 12/16/22

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

• CRON announced that Altria relinquished the out-of-the-money warrant to take control of the company, a move that permitted Altria to take a big tax-loss ($483 million).
• CURLF opened its 55th Florida medical cannabis dispensary.
• CWBHF named a new CFO.
• TCNNF closed two debt securities, one for $71.5 million and the other for $18.9 million. It also announced a settlement with OSHA in Massachusetts.
• TRSSF reduced its debt by $35 million, paying down its Pennsylvania credit agreement.
• UGRO announced Good Lettuce Company in New Jersey as a new cannabis client.
• VRNOF opened its 62nd Florida medical cannabis dispensary.

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 80 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 posted a new all-time closing low of 9.55 on Thursday and a new intraday low of 9.40. It was slammed lower this week to 9.71, ending down 11.9% for the week. This was a lot worse than the 0.2% loss in the S&P 500, which is down 5.8% in December. The cannabis index has dropped 29.0% in December, and it has declined 13.8% thus far in Q4. This is worse than the +7.2% return in the S&P 500.

The index, which lost 26% in 2021 following a 5.2% gain in 2020, is down 70.4% 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 that was taken out this week:

Model Portfolios

Flying High, down 16.1% in Q3, ended the week valued at $111,674, down 14.5% during the week. It has lost 24.0% 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 62.1% in 2022. The model portfolio has increased 1067% since inception. Flying High has 6 positions and 0.2% cash. During the week, I sold a Canadian LP and added back an MSO.

420 Opportunity, which fell 15.2% in Q3, ended the week at $27,023, down 17.9%, which was worse than the Global Cannabis Stock Index. It is down 24.9% 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 9.5% during the week. In 2021, the model lost 13.8%, while the index decreased 26.0%, and it is down 70.3% in 2022 compared to the index loss of 70.4%. The model portfolio has lost 46.0% 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 (13.7%), AAWH (12.5%) and VRNOF (11.6%). During the week, I made no adjustments to this model portfolio.

420 Quality, which was funded with $50,000 (paper) on 3/1/17 and was down 14.8% in Q3, ended the week at $37,503, down 17.2% this week. It has declined 25.4% 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 -70.3% compared to the index return of -70.4%. 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 lost 25.0%, while the index has lost 88.0%. The model has 13 holdings and 0.2% cash. The largest positions include HFYM (13.3%), VRNOF (11.7%) and AYRWF (11.7%). During the week, I made no adjustments to this model portfolio.

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.

• No events scheduled this week

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).