New York, NY October 27, 2014
An index of nearly 70 public companies in the legal cannabis market handily outperformed leading stock indices for the first three quarters of 2014, but the expert behind the Index urge caution for participants in the marijuana stock market.
The Viridian Cannabis Industry Report and Stock Index is a unique resource that tracks, evaluates and reports news on emerging public markets for cannabis companies. Its Index — composed of 70 publicly-traded companies categorized in 10 sectors such as cultivation & retail; consumption devices and physical security — gained 147.1% for the first three quarters of 2014, significantly outperforming the same period for the Dow Jones Industrial Average (up 2.8%), S&P 500 (up 6.7%), Nasdaq (up 7.6%) and the Russell 2000 (down 5.3%). This performance follows a strong 2013, when the Index of cannabis stocks gained 146.6%, outperforming comparative indices. The Index is valued on an Equal Weighted Total Return basis.
However, all gains so far this year were made in the first quarter, which saw the Index rise by 838.4%. The next two quarters both showed declines. “We believe this reflects hype and promotion in the public Cannabis Sector in 2013 through early 2014, and a subsequent, much needed ‘return toward fundamentals’ in the sector,” said Scott Greiper, president of Viridian Capital & Research, www.viridiancr.com, a provider of strategic advisory and investment banking services to cannabis-related companies and investors.
“The legal cannabis industry is growing rapidly — likely reaching $10 billion in annual activity by 2018 — and so are the number and size of public companies serving it,” said Greiper. “But we see a shake-out coming, as out-of-control valuations come down to reality, questionable operators are forced from the industry and the real winners in the sector become apparent. This will also accelerate the movement of more traditional financial institutions and investors into marijuana stocks.”
The Cannabis Sector also saw significant M&A activity over this period, with 21 companies completed a total of 33 acquisitions. “We expect acquisition activity to grow for several reasons,” said Greiper. “Public companies are buying financial ‘meat on the bone’ to support current valuations; private companies want to ‘go public’ by being acquired by already public companies; and public companies are seeking to build out their IP and product portfolio.”
To obtain the full report – including the company names on its marijuana stock list — visit:http://www.viridiancr.com/industry-report or contact Michael Swartz at mswartz(at)viridiancr.com or call 212-333-0257.
Viridian Capital & Research (VCR) http://www.viridiancr.com @ViridianCap was formed by experienced investment bankers to bring capital markets expertise, institutional research coverage and strategic direction to the emerging Cannabis Sector. VCR is a boutique banking and strategic advisory firm that helps clients improve the value of their enterprises by providing research, investment banking, investor relations and corporate development services. Our banking practice, through affiliate Pickwick Capital Partners, provides capital and M&A services to fund the growth of our clients, while our advisory practice helps position and build their cannabis businesses. VCR research and market intelligence are recognized for their unique value and cited by leading market observers, including Institutional Investor.
Broker dealer services provided through Pickwick Capital Partners, LLC Member FINRA SIPC.
The Viridian Cannabis Industry Report and Stock Index is published solely for information purposes and is not to be construed as investment advice or as an offer to sell or the solicitation of an offer to buy any security in any state. This report is for informational purposes only. Readers should review all available information on any company mentioned, which may include, but not be limited to, the company’s annual report, quarterly report, press releases, as well as other regulatory filings. The information contained in this report does not constitute an offer to sell or a solicitation of an offer to buy any equity or debt securities of any Issuer. The information contained herein is not and shall not be deemed to be part of any prospectus, or offering memorandum, notice or circular relating to the capital stock or debt obligations of any Issuer. The reader of this document should not rely upon the information contained therein in making an investment decision and should communicate any questions relating to any Issuer to their Financial Consultant. Viridian Capital & Research and/or its officers and employees, and/or members of their families may have a long/short position in the securities mentioned and may make purchases and/or sales for their own account of those securities.