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

    September 15, 2023

    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.

    Our Blacklight SaaS platform and Black App provides an up-to-date view of short selling and short covering on an equity, sector, index, or country-wide basis allowing investors\traders to better manage their existing long and short positions. The Black MaP and Black App products provide a total view of long and short positioning in the market with a breakdown between Active\Passive long investors, 24 Fund type entities, over 50k securities globally across 108 countries and data from 58 regulatory exchanges.

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