SWI CANNABIS MARKET UPDATE AUGUST 2026

Published by: StockWatchIndex Research Team

Rainer Poertner, Chief Analyst

Portfolio Analysis: Development Since 2022

The SWI portfolio provides broad exposure to the cannabis industry, but it is not genuinely diversified, even though it represents several different business models. Nearly all of our holdings depend on the same underlying forces: cannabis regulation, access to capital, consumer demand, taxation, and investor sentiment.

The result since 2022 has been severe and persistent capital destruction across most stocks. Based on the supplied prices, 13 of the 14 securities trade below their January 2022 reference price. Glass House Brands is the only clear long-term winner.

The portfolio still has recovery potential, but it should be treated as a highly speculative cannabis-sector portfolio – not a balanced investment portfolio.

What Actually Matters (next 12 months)

While nearly all values in our portfolio have increased somewhat over the last two months, only if U.S. Rescheduling (the catalyst) is finalized will we see a sector-wide, consistent re-rating. If rescheduling is delayed, stocks will continue to trade sideways / grind. If federal rescheduling occurs within the next 12 months, the strongest upside among major cannabis stocks is likely in companies such as Curaleaf and Glass House, while Innovative Industrial Properties offers a more conservative way to participate in the sector’s recovery.

Several apparent price increases are also reverse-split effects rather than investment gains:

• Canopy Growth completed a 1-for-10 consolidation in December 2023. Canopy Growth announcement
• Tilray completed a 1-for-10 reverse split in December 2025. Tilray announcement
• Curaleaf completed a 1-for-3 reverse split in June 2026. Curaleaf announcement
• Verano completed a 1-for-5 reverse split in June 2026. Verano announcement

Therefore, the portfolio’s reported totals and percentage changes should not be read as “actual” investment returns, but simply as a general guideline.

2022–2023: Sector Collapse

The quoted-price total fell from approximately $506 in January 2022 to $129 by September 2023. While this is not a valid portfolio return, it accurately reflects the direction and severity of the sector decline.

2024: Temporary Recovery and Another Breakdown

The table shows a recovery into September 2024, driven in part by Glass House, Green Thumb, Trulieve, and Innovative Industrial Properties. That recovery was not sustained. By December 2024, the nominal total had fallen approximately 47% from September. This pattern demonstrates the portfolio’s dependence on short-lived regulatory expectations and sector-wide trading momentum.

2025: Extreme Volatility without a Durable Trend

The portfolio fell through June 2025, rallied sharply in August, and weakened again during the fourth quarter. The August rally was broad enough to demonstrate the portfolio’s upside sensitivity, but it did not establish a durable recovery. The portfolio behaved more like a regulatory-event trade than a compounding investment portfolio.

Overall Conclusion

The portfolio’s strength lies in its broad exposure to a potential recovery in the cannabis industry. Its central weakness is that nearly every holding requires some combination of regulatory progress, improved profitability, and renewed investor interest. The historical evidence is brutal:

• Only one holding clearly exceeded its January 2022 price.
• Most holdings lost more than half their nominal value.
• Several lost more than 90%.
• Reverse splits make the reported recovery look stronger than the underlying shareholder return.
• Short rallies repeatedly failed to develop into sustainable portfolio appreciation.

Continuing to hold can be justified only as a deliberate, high-risk recovery strategy. Another approach would be to rank the companies by balance-sheet quality, cash generation, and regulatory leverage, concentrate capital in the strongest operators, and impose explicit review or exit criteria on chronically underperforming positions. It may still be worthwhile to hold because the sector is deeply depressed, regulatory reform could sharply improve industry economics, and the surviving operators may emerge with stronger competitive positions.

Selective Holding Strategy

Higher-conviction hold – Green Thumb, Trulieve, Cronos, Glass House

Brands Income/specialized hold – Innovative Industrial Properties

Hold under close review – Curaleaf, Verano, Organigram, Aurora

Require measurable improvement – Canopy Growth, Tilray, Cresco Labs, WM Technology

Limit to speculative capital – LiveWire Ergogenics