The Cannabis Stock Index, developed by Viridian Capital Advisors, rose 236% in 2016. Including dividends, and by way of comparison, the Dow Jones Industrial Average returned just over 16%. The 236% return of the Cannabis Stock Index was nearly 15 times that of the Dow and more than 10 times the returns of the S&P 500.
Plant-touching companies returned 306% while ancillary products and services returned 161.2%. The highest performing sub-sector was biotech/pharma. Real estate and infused products were the only losing sub-sectors on the year.
Viridian has four key criteria for inclusion on their Cannabis Stock Index:
- Filed financial reports for previous six months
- Average daily trading volume in excess of $100,000
- Australian and Canadian cannabis companies must have a U.S. listing
- $10 million or greater market capitalization
The gains for the Cannabis Stock Index in 2016 come on the heels of a less than impressive 2015 in which the index was down 32.4%. However, 2014 returns of 383.5% exceeded even 2016’s phenomenal returns. Still, the tough 2015 demonstrates some of the volatility in the industry.
Viridian Capital Advisors is a financial advisory firm founded by Wall Street analysts and bankers. In addition to the Cannabis Stock Index they now also run a cannabis venture fund.