Chart of the Week: 2014 Performance of Cannabis Stocks By Quarter

By Marijuana Business Daily staff

Cannabis stocks proved lucrative at the beginning of 2014, but the chances of a solid return deteriorated in the second half of the year.

An investor who pumped money into a mix of securities followed by the Viridian Cannabis Stock Index in early January of last year could’ve netted a 938% return at the end of the first quarter. That equates to a profit of nearly $94,000 on an initial investment of $10,000.

But a similar investment made in the second quarter would’ve only netted an investor $283 in profits.

From there, the chances of a loss increased dramatically, with the Viridian index falling more than 30% in the third quarter and again in the fourth.

The Viridian index included 75 cannabis-related firms as of the end of 2014.

It’s one of several indices that attempt to track the overall performance of U.S. cannabis stocks. The returns are purely hypothetical, as investors can’t actually buy shares in the indices themselves at this time. Other cannabis stock indices varied slightly but showed a similar overall trend.

Marijuana stocks as a whole surged in the first quarter last year amid positive news from the federal government on banking and the successful start of recreational sales in Colorado.

But the momentum stalled in the second quarter, and the bubble popped in the second half of the year.

One possible factor behind the downturn in cannabis stock prices: Many more public companies joined the cannabis bandwagon as the year went on, either via IPOs, reverse mergers or by developing cannabis-related product lines.

This added a substantial amount of volatility to cannabis stocks as a whole. Additionally, marijuana stocks in general are extremely volatile to begin with, given the uncertainties surrounding the legality of the industry and the prevalence of publicly traded companies operating on questionable fundamentals.

These types of fluctuations will likely continue in 2015 and beyond as the industry grows and matures.

5 comments on “Chart of the Week: 2014 Performance of Cannabis Stocks By Quarter
  1. Jed Vaughn on

    I got into some of these years ago, like about 10 years ago, and they are pretty much right where they were then. I’m obviously a long term investor, and I particularly like the industrial hemp space.

  2. canadian1969 on

    I didnt even know these stocks existed 10 years ago, at least not like they are now. What are the stocks you invested in a decade ago?

  3. Jason on

    I think many marijuana stocks to buy right now have come a long way from what we saw last year when all of those penny stock halts came about. Because of the federal regulations regarding marijuana/cannabis it would seem that the “big boys” in the industry have put the breaks on right now. So when it comes to this market, I look to those companies that are building a niche in the marijuana space and carve out an early niche

  4. Matt Phillips on

    By the looks of the of penny stock charts the marijuana sector is up in the first quarter. A sub penny stock company DIRVD is helping to aid the process of safe working environments for marijuana dispensaries and growing facilities across the country

  5. Rodrick Reynolds on

    Investors are starting to take notice in companies that just don’t produce marijuana but businesses that support the industry;ancillary services. Companies are trying to utilize the opportunities in the booming cannabis stock market. Here are some marijuana stocks to watch 2015

Leave a Reply

Your email address will not be published. Required fields are marked *