Canadian Cannabis LP Index is on a losing spree for the fourth month, after a 9.5% drop in October to 238.48, New Cannabis Ventures reports.

After a 1% gain in June, the index retreated nearly 27% in the third quarter.

The index, which dropped 30.1% in the last year to end at 275.16, grew by 2.0% over 2021. However, year-to-date, it is down 13.3%.

Moreover, the index remains well below its all-time closing high of 1314.33 in Sept. 2018. After posting a new 52-week closing low of 196.10 in March 2020, it closed 21.6% above that level at the end of the previous month.

The index includes 39 qualifying publicly traded cannabis companies that traded in Canada at the end of September. The companies are divided into three sub-indexes, including Canadian Cannabis LP Tier 1 Index (4 companies), Canadian Cannabis LP Tier 2 Index (15 companies), and Canadian Cannabis LP Tier 3 Index (20 companies).

The index, which is rebalanced each month, requires companies to have a price of at least CA$0.20 ($0.16) unless they are generating at least CA$2.5 million quarterly from their cannabis production operations.

Tier 1

The three largest Canadian LPs, by revenue that generate at least CA$25 million per quarter include are Aurora Cannabis (TSX:ACB) (NASDAQ:ACB), which was the best performer at -6%, followed by Canopy Growth Corporation (TSX:WEED) (NASDAQ:CGC) and Tilray Inc (TSX:TLRY) (NASDAQ:TLRY) which both dropped 11% in October.

Aurora's shares traded 3.63% lower, closing at $6.63 per share on Friday afternoon. In the meantime, analysts like BofA's Heather Balsky and Cantor Fitzgerald's Pablo Zuanic have been exploring what might drive the company's value most.

Village Farms International, Inc. (TSX:VFF) (NASDAQ:VFF), based in Vancouver, British Columbia, was the fourth company to enter the group. Over the last five years, Village Farms' stock has outperformed some of the most popular stocks globally, including Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), Netflix (NASDAQ:NFLX) and Facebook. (NASDAQ:FB).

In October, Tier 1 declined 93.9% to 423.95. Year-to-date, it plunged 13.3% from 488.96 at the end of 2020.

Tier 2

After losing 35.9% in 2020, the Canadian Cannabis LP Tier 2 Index closed at 365.19, only to continue dropping by 2.5% in 2021.

Hexo Corp's (TSX:HEXO) (NASDAQ:HEXO) and The Valens Company Inc.'s (TSX:VLNS) (OTCQX:VLNCF) were the worst performers within the Tier 2 companies, with their sock declining by 22% and 20%, respectively in October. However, the worst might be over for HEXO's stock, according to Zuanic. On Friday, the company reported a net loss of roughly CA$68 million in the fourth quarter of fiscal 2021 and net sales of CA$38.7 million.

Among 15 qualifying companies with cannabis-related quarterly sales between C$5 million and C$25 million, VIVO Cannabis Inc. (TSX:VIVO) (OTCQX:VVCIF) and Decibel Cannabis Company Inc. (TSXV:DB) (OTC:DBCCF) were the only Tier 2 names to post gains.

Tier 3

Tier 3, which included the 20 qualifying LPs that report cannabis-related quarterly sales below C$5 million, fell 8.7% as it closed at 53.12. After ending at 66.59 in 2020, it is down 20.2% year-to-date.

Nextleaf Solutions Ltd. (CSE:OILS) (OTC:OILFF) is emerging as the strongest player, for the second consecutive month, while Bevcanna Enterprises Inc. (CSE:BEV) (OTC:BVNNF) was the worst performer in the group with its stock falling 26% over the past month.

Returns for the overall sector varied greatly, with three names posting double-digit gains and seven declining by more than 20%.

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