Marijuana Business Factbook 2019

280 Marijuana Business Factbook 2019 Chapter 7 | Cannabis Business Funding & Investing © Copyright 2020, Marijuana Business Daily , a division of Anne Holland Ventures Inc. You may NOT copy this Factbook, or make public the data and facts contained herein, in part or in whole. For more copies or editorial permissions, contact CustomerService@MJBizDaily.com or call (720) 213-5992, ext. 1. CHART 7.06: North American Cannabis Stock Index Performance Versus S&P 500: January 2018 Through July 2019 Source: The Marijuana Index, Yahoo Finance © 2019 Marijuana Business Daily, a division of Anne Holland Ventures Inc. All rights reserved. North American Cannabis Stock Index Performance Versus S&P 500: January 1, 2018, Through July 22, 2019 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 -60% -50% -40% -30% -20% -10% 0% 10% % Difference In Close Price From 01/03/2018 North American Cannabis Index S&P 500 Until recently, stocks of publicly traded cannabis companies have been tracking more similarly to the broader U.S. stock market―though the cannabis sector remains much more volatile. The North American Cannabis Stock Index, shown in the chart above, tracks the leading marijuana stocks in Canada and the United States and is used here as a proxy for the larger public MJ market. Since May 2019, cannabis stocks have diverged from the broader U.S. stock market, with cannabis stocks trending strongly downward as the overall stock market has trended slightly upward. Analysts posit that the index will become less turbulent over time, as some of the volatility relates to skepticism surrounding the industry generally, while some is related to company and investor behavior. The shift represents a necessary adjustment for an industry that has been fueled by overinvestment and unrealistic expectations. Several publicly traded companies have missed their previously issued guidance or cut it before releasing their latest quarterly results. The result will be a healthier industry as companies are forced to focus in on realistic guidance and strengthening business fundamentals, such as positive cash flow.