Cannabis MSOs Down 11% Last Week Due To Year-End Tax-Loss Selling

person holding white flower during sunsetImage Source: Unsplash
 Given the extreme volatility in cannabis MSO stocks, many investors may have bought at the many peaks only to see their investments drop in subsequent sessions and are now in a position to take advantage of tax-loss selling provisions by selling their losers so they can offset their gains from other investments.As Alan Brochstein wrote in an article back in 2021 entitled “Cannabis Investors Should Take Advantage of This Annual Opportunity” which has been edited ([ ]) and abridged (…) below for the sale of clarity and brevity to provide a fast and easy read:“As the year’s end approaches, it’s a great time for investors to take action to reduce their near-term tax liability. For cannabis investors, this is especially important [again] this year given the big run-up in the sector in the early part of the year followed by declining prices. Those who booked gains on the way up but haven’t booked losses could be looking at large tax bills in early 202[3]. Also, more diversified investors with gains from other parts of the market may be in this position. Fortunately, it’s not too late to take action…Many…[U.S. investors] who are focused solely on the cannabis sector may not have any gains but just losses given the decline in…[many of the stocks in the sector but they] can deduct up to $3,000 each year in capital losses and can carryover excess losses into the future, so selling some cannabis stocks at a loss can reduce one’s income tax to some degree, even if there aren’t gains to offset…[Remember]…one doesn’t have to exit the market…[only] stay out of the stock sold for 30 days…[before buying] it back…The investor can buy back a similar security, [however,] and this is what we encourage our readers to consider.”A further sell-off over the next 2 weeks is a distinct possibility if what happened at this time a year ago should happen again this year and it does appear that is, in fact, the case. The 7 largest MSO stocks, as represented by munKNEE’s American Cannabis MSO Stocks Index, went DOWN 13.8% last year during the week ending December 17th and the Index went DOWN 11.0% during the same period this year. Last year the Index declined a further 20.7% by the end of the year. Can we expect the same sell-off again this year?Below are the performances of the 7 constituents in the American Cannabis MSO Stocks Index last week, in descending order:

  • TerrAscend Corp. (TSNDF): DOWN 7.7%
  • Verano Holdings (VRNOF): DOWN 9.0%  
  • Green Thumb (GTBIF): DOWN 9.0%
  • Curaleaf Holdings (CURLF): DOWN 11.1% 
  • Trulieve Cannabis (TCNNF): DOWN 11.2% 
  •  Cresco Labs (CRLBF): DOWN 17.1% 
  • Ayr Wellness (AYRWF): DOWN 20.9%  
  •  Summary The non-tradable munKNEE American Cannabis MSOs Index was DOWN 11.0% last week while the AdvisorShares Pure US Cannabis ETF (MSOS) was DOWN 10.9%.More By This Author:AI-Focused Drug Discovery Stocks Index Up 10.6% Last Week
    Psychedelic Drug Stocks Index Declined 1.6% This Week
    Canadian Cannabis LP Stocks Index Down 5% This Week – Here’s Why


    • Total Score 0%
    User rating: 0.00% ( 0
    votes )

    Leave a Reply

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