Monthly Cannabis Market Report (March) | CBDX

20 April 2020


Key Takeaways

  • COVID-19 has highlighted the importance placed upon medical cannabis being available to patients
  • Canadian provinces and American States declare Cannabis an “essential business” to stay open during viral shutdown

Medical Cannabis Monthly Performance

The Medical Cannabis and Wellness Equity Index (NTR)


Current performance is no guarantee of future performance. Source: Bloomberg/HANetf

Performance Review

As the world resets growth expectations, the secular growth story of cannabis remains largely untold in the background. Over the past couple years, investors have been working diligently through a price-discovery phase for the sector which is newly legalised and regulated. This has meant testing the limits of success and overcoming the multiple hurdles that come with the development of a new sector. Excessive valuations and rapid discounts have kept the sector associated with volatility and speculation.

In late February 2020, COVID-19 shut down major parts of Europe and North America. Stock markets collapsed as investors fled in droves and cannabis stocks did not escape the carnage. The silver lining out of this pandemic has been the importance placed upon medical cannabis being available to patients. In Canada and at least 21 U.S. States, medical cannabis has been deemed an essential service, showing solid support from regulators of the definitive future of the medical cannabis industry.

This silver lining has defined what we believe to be the valuation floor for medical cannabis. The more direct impact of this downturn is bankruptcies in the Canadian adult-use cannabis sector which will dominate headlines. But that trade is single jurisdiction, overcrowded, under-capitalised, and not the focus of CBDX. For Medical Cannabis and CBD Wellness, the support of regulatory bodies in providing access to patients is the affirmation investors have been awaiting to finally start believing the secular story again.

There is no doubt that the sector will continue to trade with a high beta as financial markets find their feet. But it’s essential to maintain context of the precedence being set here. In addition, adult-use cannabis in Canada should consolidate over the coming months taking out the noise and leaving only the best operators to play. This is the most comfortable in understanding valuations in medical cannabis we have been in months.


Total Return NAV to Date (up to 31/03/2020)

   1M  3M  6M  YTD  12M  Since Inception
 The Medical Cannabis and Wellness UCITS ETF (Acc) -17.08 NA NA -24.89% NA -24.89%
 Medical Cannabis and Wellness Equity Index (NTR) -17.39% -25.99% -38.97 -25.30% -46.20% -25.30%


Industry News

A watershed moment - Canadian provinces and American States declare Cannabis an “essential business” to stay open during viral shutdown: Throughout Canada and in 21 US States with legal medical or adult-use markets, cannabis operators and supply chain have been deemed an essential service, allowing for producers and dispensaries to remain open even as majority of the retail economy are shuttered.

UK eases import restrictions for medical cannabis: In early March the United Kingdom began easing import restrictions for medical cannabis, a move that is expected to improve the numbers the market has seen to date. Licensed wholesalers of medical marijuana are now able to import larger quantities of cannabis-based products and hold supplies for future distribution, the Home Office and the Department of Health and Social Care jointly announced Monday. As all cannabis in the UK is imported thus will allow patients to get their treatment in days rather than months.


In the short term, macro headwinds will define the future of cannabis operators. We anticipate lots of bankruptcy noise to take over headlines and the media will continue to milk ‘fall from grace’ of cannabis. We think it is important to distinguish between the challenges facing medical cannabis and adult use cannabis. Canadian adult use market has seen valuations fall precipitously as too much capital was applied too fast and this has meant excess capacity, exuberant compensation packages and led to lack of long-term foresight. The medical cannabis market continues to have much more stable patient growth and consistent progress in pharmaceutical formulation. Very important to distinguish news from noise and elaborate on our stance of providing exposure to high quality growth of medical cannabis and CBD wellness.

Constituent News

Charlotte’s Web acquires Abacus Health Products

Recently, the biggest public hemp CBD company in the United States, Charlotte’s Web (TSX: CWEB), has agreed to acquire Abascus Health Products (CSE: ABCS). Abacus has long been a favourite name for investors with a very unique position in the complex regulatory structure of CBD legalization. Abacus holds a very unique position in the complex regulatory structure of US CBD legalization having the only FDA approved CBD topical products in the U.S. market. With this FDA endorsement and GMP certification, Abacus claims efficacy for usage of CBD for multiple conditions. With this acquisition we are excited to include exposure to the IP of Abacus in CBDX through a large weight in Charlotte’s Web. The combined company will now represent 35% market share of CBD in Food/Drug/Mass retail channel, across 15,000 unique locations and online in the US.

GW Pharma continues to trailblaze in the world of big pharma

The FDA recently accepted a supplemental new drug application (sNDA) for EPIDIOLEX to be used in the treatment of seizures associated with Tuberous Sclerosis Complex. This expediates the reviews required to get the drug to market with a goal date of completion set at July 31, 2020. EPIDIOLEX is already approves for treatment of seizures associated with Lennox-Gastaut Syndrome and Dravet Syndrome. In addition, GW Pharma regained exclusive commercialization rights to Sativex in the United Kingdom, taking the reins back from Bayer. Sativex is used to treat pain in patients with advanced cancer. GW Pharma continues to further its position as a cannabinoid platform and compete with the big boys versus just being remembered as a one-hit wonder.

Fund Details

The Medical Cannabis and Wellness UCITS ETF, is a UCITS compliant Exchange Traded Fund domiciled in Ireland.

The fund tracks a rules-based Medical Cannabis and Wellness Equity Index from Solactive, consisting of publicly listed companies conducting legal business activities across nine thematic sub-sectors in the medical cannabis, hemp and CBD industries.

The fund seeks to provide targeted exposure to the rapidly expanding legal medical cannabis industry that is set for further growth as more countries legalise cannabis for medical use.

Please remember that the value of your investment may go down as well as up and past performance is no indication of future performance.

 Exchange BB Code RIC ISIN Currency Income
London Stock Exchange CBDX LN CBDX.L


 USD Acc
London Stock Exchange CBDP LN CBDP.L IE00BG5J1M21 GBP Acc


Click here to download: Monthly Cannabis Market Report

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