With a wave of IPOs in the second half of 2018, the quality of the companies tracked in the proprietary NICI Indices has improved.

Our exclusive trio of NICI Indices, which we developed to be the most accurate measures of the cannabis industry, underwent their first quarterly reallocation on January 1, 2019. In doing so, it reflects the huge changes to and the continuing maturation of the cannabis industry.

Now we’ve got six months of data, and having more historical data only adds to the value of these indices for investors like you. So, expect to hear more about the NICI 50, the NICI U.S. Index, and the NICI Health and Wellness Index. For now, let’s talk about the big changes the indices received on January 1.

The biggest trend to notice is how many additional, high-quality cannabis companies have moved from private status to publicly traded.

As I’ve been predicting, U.S. companies are starting to get in on some of the action Canadian companies were best known for in 2017 and especially 2018. It’s in part because of the rapid rise in quality of the Canadian Securities Exchange (CSE) and willingness to allow U.S.-based companies to be listed there.

Regardless, these newly public companies’ impact over the last six months is impossible to ignore, especially on the NICI U.S. Index.

Here is what’s happening…

The Face of Cannabis Is Constantly Changing, And in a Hurry

The NICI indices “rebalance” daily – that means that each company’s value is reset to a constant percent of each index at the end of each day. The result of the daily rebalancing is that one outlier can’t move the index very much on its own the way a tiny number of expensive stocks push the S&P 500. Small companies and large companies have the same influence on our indices each day.

But the indices only “reallocate” quarterly. That means at the end of each quarter, we look at all cannabis stocks and reconstruct each index using our construction rules. My research team and I add companies that meet the listing criteria and we remove companies which no longer qualify.

As I touched on earlier, the second half of 2018 saw a lot of changes to the public cannabis market, mostly IPOs from American companies. That means that over 40% of the NICI 50 – 21 out of 50 companies – are new to the index this quarter. And 40% of the companies which were in the index, which tracks the largest companies in the industry regardless of segment, on December 31 are now out.

This industry has minted millionaires before, but today it could be your turn. What former Speaker of the House John Boehner has revealed about the cannabis industry could help you make a FORTUNE from America’s next trillion-dollar industry. If you missed this shocking prediction live, go here for a special rebroadcast.

New companies in the NICI 50 include instant industry giants like Acreage Holdings, Cresco Labs, and Tilray Inc., as well as upstarts like New Age Beverages Corp. Companies which left the index are smaller ones, including Isodiol International Inc., Namaste Technologies Inc., and Terra Tech Corp.

Many of those departures have very low ratings in our exclusive NICILytics Database ratings system, which is available to our Cannabis Investor’s Report lifetime-level members. They’re unlikely to ever be successful companies.

That means the quality of the companies in the NICI 50 has inherently increased. The average NICILytics rating of companies in the index is now a 3.3 (out of a maximum rating of 5), up from 3.1 before the reallocation.

The NICI U.S. Index underwent a similar change thanks in part to companies that IPO’d of late. No names were removed from the U.S. Index, but 16 companies that did not previously qualify for inclusion made it this quarter. That more than doubles the size of this index’s holdings.

At any rate, new names in the NICI U.S. Index include some of those giants I mentioned, like Acreage and Cresco. It also now includes CBD product leader Charlotte’s Web Holdings Inc., and Arena Pharmaceuticals Inc.

Reflecting the high quality of IPOs during the past six months, the NICI U.S. Index had a drastic increase in quality. The average NICILytics rating of the companies in the NICI U.S. Index increased from 2.9 to 3.4.

Finally, the NICI Health and Wellness Index had the fewest changes. We added five companies and removed two due to their small market capitalizations. If a company is both in the health and recreational markets, we classify them on the recreational side. Emerald Health Therapeutics Inc., for example, is overwhelmingly a health-oriented company, but because it sells to the recreational market, too, we classify it outside of the Health and Wellness Index.

As we go forward, it will become increasingly difficult to make the distinction between a health and wellness company and a company with a more general appeal. The pure pharmaceutical companies will be easy enough to classify, but what will happen when some of the CBD companies start partnering with companies like Coca-Cola?

Regardless of the direction, we’ll keep you updated on how our indices – like the industry, in general – is evolving.

And as I mentioned, the indices are starting to gain value as they track longer periods, so expect to hear a lot more about them in the future.

Thank you for being an important part of the National Institute for Cannabis Investors,

Greg Miller
Executive Director, National Institute for Cannabis Investors

P.S.: Take control of your investing goals with our one-of-a-kind stock screening tool. Just click here to get the full rundown of what this invaluable trading tool can do for you, and to learn how you can add it to your investing toolkit.


Comments

11 responses to “IPO Activity Strengthens the Quality of Companies Within the NICI Indices”

  1. It would be nice to know the names of the companies dropped therefore we don’t have to go through the list and figure out what’s not there anymore just in case we have shares

  2. I would like to know the new IPO coming out that is supposed a really great buy. I can not find a name anywhere here , or , elsewhere. I am just
    breaking in here in this field, little money, I can not afford to go wrong in
    a purchase. Also I can not find out if charlottes web is paying a dividend.
    Thanks,in advances any and all help is appreciated.
    Cecil Gregg

  3. There’s so much to read , don’t know where to start . It will take hours to read through all this info . I can’t find report for the # 1 company . Getting confused . would be nice if you could make it a little more simplier .

  4. Hey, Ray –

    I’m new here, too. What I’m doing is listening to *all* the videos and reading *all* the reports, making notes wherever warranted. I also download *all* the PDFs to save and study.

    It is a lot of info for sure, but that would in my opinion also allude to the fact that this *is* a new and fast-growing global marketplace in which players will come and go, and the rules might even change weekly.

    All the best –

    Chip

  5. Lots of information all the time.
    Where and in what publications are the specific stocks named that you are recommending we review and buy?
    Exactly the same question for upcoming IPO’s?
    I’m not looking to receive more and more requests to upgrade my membership, but facts for recommendations.

  6. I was reading up on CannaLife Capital can someone tell me if they will be joining the IOP Maket soon or are they already trading?

  7. I am doing very good in the positions that NICI has recommended . I have also been an investor in many other position , I am faced with the difficult decission as what to keep and what to sell to follow your buy recommendations. What do you think of Raven Quest?, Pura and especially aurora (act) ?

  8. There’s a lot to take in for a simple guy like myself, I’m willing to learn all I need to know before making a decision, but as I continue to receive emails I feel like I’m so far behind and it seen confusing to me of what route I should take, so what should I do as a beginner?
    Cedric V.

  9. Dear Greg Miller,
    This is for Danny Brody too,
    I know Ananda Scientific is going public in 3 to 4 months.
    Please go to anandascientific.com and find out all about it.
    This company having the patented formula to dissolve CBD in water!!
    This company is like GW Pharmaceutical.
    Doing research in Israel about CBD.
    Sponsored Dr. Sanjay Gupta to do a study on Medial Marijuana. He had a few show in CNN few years back.
    Please Find out more about it by visiting the website.

    Mathew Mundiyamkal

Leave a Reply

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