Cannabis Stocks Start First Quarter With a Bang, End With a Fizzle as Hype Subsides

Most publicly traded cannabis companies got off to an impressive start in 2013, posting steady gains in January and then soaring to 52-week highs in February when hype over the industry’s future reached a fever pitch. But the euphoria has faded, and the majority of marijuana-related stocks closed out the first quarter – which wrapped up last week – at or near where they began it.

Here’s an overview of how some cannabis stocks performed during the first three months of 2013. (Note: all of the following stocks trade on the over-the-counter markets.)

Cannabis Science (CBIS) – Cannabis Science – which develops phytocannabinoid-based treatments for various ailments – opened the year at 5 cents a share and then climbed as high as 12 cents in intraday trading on Feb. 5. It has since steadily declined, ending the first quarter back at 5 cents. The company’s market cap is currently around $39 million.

Growlife (PHOT) – Growlife – which sells hydroponics and cultivation products and runs an information portal for the MMJ industry – saw its shares climb from 4 cents in early January to 12 cents a month later. But the company’s stock has fallen since then and, like Cannabis Science, ended March where it started the year, trading at 4 cents. The stock is well below its 52-week high of 25 cents, reached briefly during intraday trading back in May of last year. Growlife’s market cap is currently $15.4 million.

Medbox (MDBX) – Medbox stock soared last fall from a couple bucks a share to more than $200 on marijuana legalization in Colorado and Washington and several press reports about the company. It’s been a bumpy ride since then. Medbox shares closed out 2012 at $61, quickly shot up to around $100 but then plummeted to $25.52 at the end of the first quarter – a 58% decline. Still, the stock is trading much higher than its 52-week low of 3 cents. Medbox is thinly traded because there are few shares available to the public, making rapid price swings more likely. Despite the price decline, the company – which provides automated cannabis dispensing systems and related services – ended the first quarter with a healthy market cap of $281 million.

Medical Marijuana Inc. (MJNA) – Medical Marijuana Inc – which owns a portfolio of cannabis-related companies, including infused products provider Dixie Elixirs and Edibles – started 2013 at 10 cents, surged to 50 cents in February and then fell to close the first quarter at 25 cents. Despite the recent dip, the stock more than doubled in the first quarter. It’s now hovering near the middle of its 52-week range, and the company has a market cap of $184.5 million

MediSwipe Inc. (MWIP) – MMJ services and software provider MediSwipe posted a sizable gain in the first quarter, rising from 1 cent at the end of 2012 to 5 cents at the end of March – a fivefold increase. Like most other MMJ stocks, MediSwipe ballooned in February (to 11 cents) before losing most of the gains. It’s market cap stood at $22.2 million at the end of the first quarter. The company helps medical marijuana dispensaries manage patient records and handle customer payments.

Terra Tech Corp. (TRTC) – After starting the year at 48 cents, shares of Terra Tech Corp. rose to 66 cents in February but then came tumbling all the way down to 19 cents at the end of March. The company – which makes indoor MMJ cultivation equipment – is now trading near its 52-week low of 13 cents (vs. a high of $1.15) and has a market cap of about $15 million.

The X-Change Corp. (XCHC) – The X-Change Corp., which provides cannabinoid-based products such as lip balms and creams, traded at 9 cents at the end of the first quarter, down 2 cents – or 18% – from the beginning of the year. It hit 25 cents in late February before sliding in March and is now at the low end of its 52-week range (3 cents-39 cents). The company has a market cap of $3.2 million.

4 comments on “Cannabis Stocks Start First Quarter With a Bang, End With a Fizzle as Hype Subsides
  1. Headcoach on

    The reason for this is do to a few individuals like right wing conservative Alan Brochstein who posted multiple articles on Seeking Alpha damaging the reputaion of these companies.

    Reply
  2. Jim on

    The group as a whole have had their hype and speculative profit taking. The survivors who actually make money are at the lows and this is when the smart money loads up on the dips.

    Reply
  3. Sam on

    >>End With a Fizzle as Hype Subsides<<

    The Hype has not subsided. The silence from the federal govt. has created the following..
    A) Uncertainty: Which provides an ample opportunity for short-sellers.
    B) Profit taking, aided by bouts of panic and uncertainty.
    C) Lack of visibility into Cannabis related companies, as most cannot disclose their assets, due to conflict with federal law.
    D) Huge variance in the mkt. potential (from $20Billion to $100Billion), example Bloomberg thinks it's a $40Billion mkt. while the economist thinks it's a $50Billion mkt.
    The Street.com speculates that it's a $120Billion mkt.

    Reply
  4. Headcoach on

    Jim, how right you are. Here’s how I see it. This is great chance in life to be part of a growing industry. It’s like becoming one of the first investors who invested in big tabacco or the ability to buy in when Budweiser loaded their first barrel.

    This type of opportunity comes once in a life time and when it comes knocking at the door…open the door!

    Is it scary? Sure, but what if it get’s reschedule as a class 2 drug? If that happens (and it will) you will be running to the bank. If it doesn’t, it’s okay to step out of the rut or your comfort zone to take a risk.

    I have looked at various ways to invest in this industry, but most ways are too expensive where I would need to invest $500,000 and up.

    Playing these stocks on the pinks allow me to get involve at a price I can afford. The more states that come on board, the more the Fed’s will have to relent.

    So, the longer it takes for them to make a decision, the more states will have a chance to come on board. We are seeing this now. We just need more states to understand the benefits for the voters and their tax coffers.

    A report came out a couple of days ago where some anal-cyst came out and said that dispensaries can’t make money at this. Are you serious? The new dispensary in AZ makes over a $1M a month.

    Dixie’s in just about every state that has okayed medical marijuana and the thing is, their product can go into any state…it’s not THC based. Every healthfood store should have CBD Hemp Oil it on it’s shelves.

    Reply

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