Cannabis Short Interest Goes Up In Smoke
Author:
Ihor Dusaniwsky
Managing Director of Predictive Analytics, S3 Partners
Matthew Unterman
Director of Predictive Analytics, S3 Partners
S3 tracks a basket of cannabis sector securities, made up of 126 U.S. and Canadian traded stocks, and have seen a dramatic decline in short interest since the sector’s high trading point in February 2021, Total short interest has declined 86% in two and a half years, from a high of $4.95 billion to just $692 million today.
This decline in short interest was not due to short covering, on the contrary, we have seen increased short selling over that time period – the decline was due to the precipitous fall in the cannabis stock prices. Since February 10, 2021, there was $360 million of new short selling in cannabis stocks partially offsetting a $4.62 billion decline in value of the stocks shorted.
Short selling in the cannabis sector has and is highly concentrated in a handful of stocks, with the top ten most shorted names making up 96% of the total short interest in the sector. The top twenty most shorted stocks in the cannabis sector are:
Cannabis Stocks Short Interest
USD Tkr
CAD Tkr
Short Interest
Tilray Brands Inc
TLRY US
TLRY CN
$386,857,276
Canopy Growth Corp
CGC US
WEED CN
$104,743,694
Aurora Cannabis Inc
ACB US
ACB CN
$37,293,655
Cronos Group Inc
CRON US
CRON CN
$36,892,771
SNDL Inc
SNDL US
N.A.
$34,179,915
Curaleaf Holdings Inc
CURLF US
CURA CN
$17,796,766
Columbia Care Inc
CCHWF US
CCHW CN
$17,182,612
Trulieve Cannabis Corp
TCNNF US
TRUL CN
$9,711,674
Green Thumb Industries Inc
GTBIF US
GTII CN
$7,697,183
High Tide Inc
HITI US
HITI CN
$5,100,681
Cresco Labs Inc
CRLBF US
CL CN
$4,632,422
Verano Holdings Corp
VRNOF US
VRNO CN
$4,551,350
Organigram Holdings Inc
OGI US
OGI CN
$4,051,030
WM Technology Inc
MAPS US
N.A.
$3,197,306
TerrAscend Corp
TSNDF US
TER CN
$2,166,425
Jushi Holdings Inc
JUSHF US
JUSH CN
$1,883,774
Planet 13 Holdings Inc
PLNHF US
PLTH CN
$1,388,225
Charlotte’s Web Holdings Inc
CWBHF US
CWEB CN
$628,623
Flora Growth Corp
FLGC US
N.A.
$520,619
Ayr Wellness Inc
AYRWF US
AYR/A CN
$408,066
Total short interest in the cannabis sector is $682 million with the top ten most shorted names totaling $657 million and the top twenty totaling $681 million.
Most of the new short selling, over the last year and since February 10, 2021, has occurred in the top ten most shorted cannabis stocks and specifically Tilray Brands Inc. (TLRY US, TLRY CN).
Cannabis Stocks Shares Shorted
USD Tkr
CAD Tkr
Short Interest
YTD Shares Shorted
Shares Shorted since 2/10/21
Tilray Brands Inc
TLRY US
TLRY CN
$386,857,276
$184,647,909
$287,762,377
Canopy Growth Corp
CGC US
WEED CN
$104,743,694
-$17,664,618
$57,913,649
Aurora Cannabis Inc
ACB US
ACB CN
$37,293,655
-$2,894,318
$14,443,812
Cronos Group Inc
CRON US
CRON CN
$36,892,771
$1,484,305
-$34,620,932
SNDL Inc
SNDL US
N.A.
$34,179,915
-$6,078,110
$15,242,503
Curaleaf Holdings Inc
CURLF US
CURA CN
$17,796,766
$7,575,617
$10,663,566
Columbia Care Inc
CCHWF US
CCHW CN
$17,182,612
$16,026,274
$17,067,420
Trulieve Cannabis Corp
TCNNF US
TRUL CN
$9,711,674
-$4,092,541
$4,926,665
Green Thumb Industries Inc
GTBIF US
GTII CN
$7,697,183
$936,286
-$4,663,164
High Tide Inc
HITI US
HITI CN
$5,100,681
$1,445,727
$2,142,402
Cresco Labs Inc
CRLBF US
CL CN
$4,632,422
-$18,124,866
-$636,386
Verano Holdings Corp
VRNOF US
VRNO CN
$4,551,350
-$5,272,957
$4,551,350
Organigram Holdings Inc
OGI US
OGI CN
$4,051,030
-$118,173
-$5,943,666
WM Technology Inc
MAPS US
N.A.
$3,197,306
-$3,035,817
$2,110,353
TerrAscend Corp
TSNDF US
TER CN
$2,166,425
-$44,199
-$1,390,482
Jushi Holdings Inc
JUSHF US
JUSH CN
$1,883,774
$720,931
$703,341
Planet 13 Holdings Inc
PLNHF US
PLTH CN
$1,388,225
$759,061
-$1,385,176
Charlotte’s Web Holdings
CWBHF US
CWEB CN
$628,623
-$619,062
-$260,944
Flora Growth Corp
FLGC US
N.A.
$520,619
-$83,598
$520,619
Ayr Wellness Inc
AYRWF US
AYR/A CN
$408,066
-$682,779
-$1,355,805
Top Ten
$657,456,227
$181,386,532
$370,878,298
Top Twenty
$680,884,067
$154,885,073
$367,791,502
Total Cannabis Sector
$682,377,117
$153,986,871
$359,797,064
The cannabis sector has rebounded in 2023 with the AdvisorShares Pure U.S. Cannabis ETF up +31% this year. As expected during this sector rally, Cannabis shorts are down -26.6% for the year:
Cannabis Stocks MTM P\L
USD Tkr
CAD Tkr
2023 YTD
P\L %
Tilray Brands Inc
TLRY US
TLRY CN
-$94,467,205
-58.24%
Canopy Growth Corp
CGC US
WEED CN
$490,564
0.59%
Aurora Cannabis Inc
ACB US
ACB CN
-$857,092
-3.03%
Cronos Group Inc
CRON US
CRON CN
-$84,290
-0.29%
SNDL Inc
SNDL US
N.A.
-$3,143,870
-11.30%
Curaleaf Holdings Inc
CURLF US
CURA CN
-$5,270,363
-53.07%
Columbia Care Inc
CCHWF US
CCHW CN
$1,450,528
14.04%
Trulieve Cannabis Corp
TCNNF US
TRUL CN
$2,593,444
29.58%
Green Thumb Industries Inc
GTBIF US
GTII CN
-$2,338,057
-55.56%
High Tide Inc
HITI US
HITI CN
-$1,201,945
-39.39%
Cresco Labs Inc
CRLBF US
CL CN
-$1,022,240
-10.68%
Verano Holdings Corp
VRNOF US
VRNO CN
-$1,691,567
-56.12%
Organigram Holdings Inc
OGI US
OGI CN
$2,776,067
52.45%
WM Technology Inc
MAPS US
N.A.
-$843,389
-21.85%
TerrAscend Corp
TSNDF US
TER CN
-$1,329,071
-78.45%
Jushi Holdings Inc
JUSHF US
JUSH CN
-$140,434
-11.08%
Planet 13 Holdings Inc
PLNHF US
PLTH CN
-$364,105
-44.56%
Charlotte’s Web Holdings
CWBHF US
CWEB CN
$535,505
63.74%
Flora Growth Corp
FLGC US
N.A.
$42,810
6.26%
Ayr Wellness Inc
AYRWF US
AYR/A CN
-$316,940
-133.05%
Top Ten
-$102,828,286
-28.01%
Top Twenty
-$105,181,650
-26.67%
Total Cannabis Sector
-$105,371,452
-26.57%
But the cannabis sector is down significantly since its February 10, 2021, high with the MSOS US ETF down -83% over the last two-and-a-half years. This is reflected in the profitability of cannabis sector short selling which is up +69.8% since February 10, 2021:
Cannabis Stocks MTM P\L
USD Tkr
CAD Tkr
2/10/21 - 9/11/23
P\L %
Tilray Brands Inc
TLRY US
TLRY CN
$1,955,890,309
223.81%
Canopy Growth Corp
CGC US
WEED CN
$1,649,582,093
188.97%
Aurora Cannabis Inc
ACB US
ACB CN
$395,488,028
108.02%
Cronos Group Inc
CRON US
CRON CN
$668,994,932
297.28%
SNDL Inc
SNDL US
N.A.
$391,626,482
141.43%
Curaleaf Holdings Inc
CURLF US
CURA CN
$14,488,843
54.21%
Columbia Care Inc
CCHWF US
CCHW CN
$6,253,718
70.59%
Trulieve Cannabis Corp
TCNNF US
TRUL CN
$53,317,112
93.39%
Green Thumb Industries Inc
GTBIF US
GTII CN
$15,063,582
73.39%
High Tide Inc
HITI US
HITI CN
$8,226,265
91.45%
Cresco Labs Inc
CRLBF US
CL CN
$27,268,860
120.55%
Verano Holdings Corp
VRNOF US
VRNO CN
$20,638,867
92.67%
Organigram Holdings Inc
OGI US
OGI CN
$118,141,794
146.03%
WM Technology Inc
MAPS US
N.A.
$59,740,976
139.81%
TerrAscend Corp
TSNDF US
TER CN
$9,298,244
73.30%
Jushi Holdings Inc
JUSHF US
JUSH CN
$5,960,550
112.26%
Planet 13 Holdings Inc
PLNHF US
PLTH CN
$12,506,008
106.62%
Charlotte’s Web Holdings
CWBHF US
CWEB CN
$20,640,224
160.22%
Flora Growth Corp
FLGC US
N.A.
$3,412,459
73.41%
Ayr Wellness Inc
AYRWF US
AYR/A CN
$8,222,873
108.59%
Top Ten
$5,158,931,364
71.94%
Top Twenty
$5,444,762,219
70.20%
Total Cannabis Sector
$5,590,163,559
69.82%
The September rally in the cannabis sector has not dissuaded short sellers in the sector as we have seen $91 million of new short selling over the last thirty days. Most of this new short selling occurred in Tilray (TLRY US, TLRY CN) and Canopy Growth (CGC US, WEED CN).
With the DEA considering reducing cannabis’s Schedule I classification to Schedule III, allowing for interstate trading, and possible easing of the SAFE Banking Act for cannabis related banking transactions there are positive underpinnings to the recent price surge in the sector. But if the rally was overblown or if these measures take longer than expected to come to fruition, we may see a future stock price weakness and an increase of short selling in the sector.
Tilray Brands, Canopy Growth, Aurora Cannabis, Cronos Group and SNDL Inc will be seeing the brunt of either short covering or increased short selling in the sector.
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