November 28, 2025
Commentary
Summary
In this month’s commentary, we discuss November market trends that have produced higher volatility. The healthcare sector was a beneficiary relative to other sectors where investors allocated to safe haven positioning. We discuss those trends and implications for Q1-26. During November one of our portfolio companies Abbott Labs (ABT) announced the acquisition of Exact Sciences for $21 billion. We also look at the US regulatory framework covering the cannabis sector and rescheduling while Congress passed legislation amending the Farm Bill of 2018, limiting the sale of intoxicating hemp derived THC beverages.
Our Equity Market View
The final US Federal Reserve (FOMC) meeting of the year took place on December 10th with the US Fed cutting rates by another 25bps to a range of 3.50%-3.75%. On inflation, the US economy has been running above the Fed’s target of 2% for over four years. However the FED is giving up on its inflation target instead ensuring that the funding markets operate normally keeping the economy from stagnating. The US labor market is slowing to a crawl at sub 1% growth YoY yet jobless claims remain low. While layoff headlines from name brand companies are notable, current employment levels sit near post-pandemic highs.
In the equity and bond markets, participants remain preoccupied with trade tensions, inflation data, labour market health, and the US Federal Reserve’s policy path. While we have experienced near-term turbulence, we remain moderately optimistic over the first half of 2026 where we anticipate economic growth improving and inflation decelerating.
Currently markets are in a state of consolidation, stabilizing yet not yet ready to confirm a bullish pattern. Over the next 6-12 months, we’ll likely see mildly lower interest rates and a resumption of US Fed balance sheet growth. We believe that markets are set to run hot into the 2026 midterms as various tailwinds converge in support of equity markets and risk assets.
During the month of November, equity markets were more volatile with negative returns for the major indices. Equity market participants became more cautious, second guessing stretched tech valuations and AI focussed names. The weighting of the top 7-8 names in the S&P 500 has led to extreme concentration over the last year that in November led to selective selling. Most sectors saw negative returns in the month. A standout for the Fund was our allocation to healthcare where various names provided sound returns for the month. Stand outs included JNJ + 9.7%, APO +6.2%, Cigna +5.4%, EYE 4.5%, RDNT +3.1%, ABT +3.4%, TMO + 3.2% and DGX + 2.3%.
The Ninepoint Cannabis & Alternative Health Fund is focused on the key drivers affecting cannabis, health and wellness, pharma and consumer health sectors. We invest in companies that are embracing new modalities, innovative technology and effective distribution. We believe that people globally are becoming more aware of alternative treatments and seeking out the best providers of select services. Our goal is to invest in those companies best positioned to take advantage of these macro changes.
Healthcare Sector Strength
Several factors have contributed to YTD underperformance in the healthcare sector relative to the overall market, including healthcare policy uncertainty, heightened volatility and focus on AI that has diverted attention away from many sectors.
Beginning in November healthcare stood out for a few reasons. First, healthcare is a recipient when there is a sector rotation away from aggressive growth, out of tech and AI and into more defensive equity allocations such as healthcare where there is constant need for services regardless of economic circumstances. Another macro driver in the month revolved around US Fed posture, October representing the second month in a row where there was a rate cut leading to cheaper cost of funds for M&A. November witnessed a change in investor interest in healthcare.
Policy uncertainty has receded, as some of the more extreme outcomes around drug pricing and broader changes have not played out as feared. Finally, we've started to sense interest in healthcare from a broader investor base, particularly those looking at the sector as a potential source of diversification. This could drive fund flows to the sector. Putting it all together, we think now is the time to start reengaging on the healthcare sector.
ABT Acquires Exact Science
On Nov 20, the Fund’s top ten holding Abbott Labs (ABT) announced a transformational transaction, acquiring Exact Sciences (EXAS) in a $21 billion deal. EXAS provides ABT with important diagnostic tests that ABT does not currently hold. EXAS developed a non-invasive colorectal cancer screening test, Cologuard that analyzes both stool DNA and blood biomarkers, finding 92% of colorectal cancers. Exact Sciences also has an early-stage breast cancer test, Oncotype DX, as well as Oncodetect which identifies molecular residual disease (MRD) which are DNA fragments that help assess the risk of cancer recurrence. ABT had been falling behind in oncology testing and the acquisition boosts ABT’s position in the growing multi-billion U.S. cancer screening and precision oncology diagnostics segment. EXAS “is a leader in cancer screening,” Abbott said in a statement.
To date, Abbott’s medical diagnostics testing business focussed on diabetes and cardiovascular disease. Abbott's diagnostics segment reported sales of $9.34 billion for fiscal 2024, down 6.5% from the year ago. Exact is projected to generate more than $3 billion in revenue this year meaning ABT could generate total diagnostics revenues of more than $12 billion annually. The transaction is expected to close by Q2-26. The transaction was unanimously approved by both companies' boards of directors.
The Farm Bill Loophole for Hemp is Closed
On November 10, the US Senate passed legislation that was primarily focused on budgetary issues to reopen the US government and related agencies and offices.
An addition to the legislation provided by Senator Mitch McConnell (R-KY) included language in the Agriculture Appropriations portion of the bill designed to close the “hemp loophole” created by the 2018 Farm Bill. Closing the loophole refers to the definition of hemp derived THC, allowing intoxicating derivatives such as delta-9 and delta-8 extracts being produced. The new language removes any ambiguity to allow only naturally occurring derivatives of hemp with lower than 0.3% THC content by dry weight as well as strict limits in total THC per package, effectively banning all intoxicating hemp products.
The ban doesn’t take effect for a year which has given the estimated $24 billion industry hope that there is still time to pass regulations that will improve the hemp THC industry.
Similar to cannabis, various state markets allow distribution of hemp derived beverages in convenience stores and gas stations, as well as wine and liquor stores. In state markets where cannabis is legal, hemp derived beverages and related products undercut heavily taxed and regulated cannabis products. In California, Governor Newsom has banned hemp derived intoxicating products that are outside the cannabis market. In Texas, there is a large hemp market, with Gov Abbott working to regulate sales of hemp, such as by restricting sales to those over 21. In Nebraska, lawmakers have instead considered a bill to criminalize the sale and possession of products containing hemp-based THC. It’s a patchwork of state by state market responses that prevents an efficient regulated approach to this popular hemp product category.
CBD Coverage under Medicare
The US Center for Medicaid & Medicare (CMS), announced that it would authorize insurance coverage for CBD products under some Medicare programs. CMS is expected to publish a Federal Register notice proposing broad updates to regulations governing marketing, drug coverage and enrollment in the coming weeks. In its notice, CMS addresses the issue discussed in this commentary with respect to Congress closing the loophole in the 2018 Farm Bill stating that hemp and related derivatives remain non-controlled substances until November 11, 2026. Those hemp products approved in the amended language will remain lawful. The policy could allow Medicare plans to reimburse patients for CBD products that meet federal standards. This opens up the potential for dialogue to determine how best to move forward with hemp derived CBD, with a federal agency approving use while Congress restricting use. There appears to be room for negotiation. This could be a major federal policy change toward hemp-derived therapeutics months after Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. met with Howard Kessler, head of the Commonwealth Project, the organization that produced the video promoted by President Trump on his Truth Social platform. In the video, there is a call to action for Medicare to cover CBD as the video highlighted CBD’s therapeutic potential for various ailments for seniors.
GOP Leaders Discuss Cannabis Re-Scheduling
Since the summer of 2024, while running for President, Donald Trump suggested that cannabis should be rescheduled at the federal level, while also suggesting that it’s a states rights issue, supporting each state’s right to establish its own cannabis market. Now in the White House, the President has once again suggested support however has not taken it a step forward in terms of legislation. Now a Republican congressional leader is optimistic that President Trump will provide the necessary leadership to ensure his Cabinet level appointees bring legislation forward.
Rep. Guy Reschenthaler (R-PA), the House chief deputy whip, said he believes rescheduling will happen under President Trump adding his personal view that it “serves as an alternative to highly addictive opioids”. Other Congressional Republicans are also supportive. Rep. Morgan Luttrell (R-TX), who has discussed his own experience receiving psychedelic therapy that helped him recover from serious brain injuries sustained in combat as a Navy seal. His view is that Congress must “make sure that veterans get care.” Reschenthaler has also stated. “You also then have the opioid epidemic, where we have an alternative that is not addictive [like] opioids.” Rep Reschenthaler took a shot at Canadian cannabis companies stating “It’s technically offensive that you can have Canadian companies involved in the same exact business activities as American companies that are traded on our stock exchanges,” Reschenthaler said.
Whether investors believe Republicans support cannabis rescheduling or not, a group of progressive Democrats is recruiting supporters to join a marijuana “advisory board,” warning of the risk that President Trump could beat Democrats in terms of causing constructive and lasting cannabis legislative change.
Options Strategy
Since inception of the option writing program in September 2018, the Fund has generated significant income from options premium of approximately CAD$5.27 million. We will continue to utilize our options program to look for attractive opportunities given the volatility in the sector and to assist in rebalancing the portfolio in favor of names we prefer as we strongly believe that option writing can continue to add incremental value going forward.
The Ninepoint Cannabis & Alternative Health Fund, launched in March of 2017 is Canada’s first actively managed mutual fund with a focus on the cannabis sector and remains open to new investors, available for purchase daily.
Ninepoint Cannabis & Alternative Health Fund - Compounded Returns* as of November 28, 2025 (Series F NPP5421) | Inception Date - August 4, 2017
1M |
YTD |
3M |
6M |
1YR |
3YR |
5YR |
Inception |
|
|---|---|---|---|---|---|---|---|---|
Fund |
-4.17% |
-7.38% |
-9.00% |
7.46% |
-12.31% |
-14.14% |
-14.64% |
0.23% |
Statistical Analysis
Fund |
|
|---|---|
Cumulative Returns |
1.91% |
Standard Deviation |
26.99% |
Sharpe Ratio |
0.07 |
The Ninepoint Cannabis & Alternative Health Fund, launched in March of 2017 is Canada’s first actively managed mutual fund with a focus on the cannabis sector and remains open to new investors, available for purchase daily.
Charles Taerk & Douglas Waterson
The Portfolio Team
Faircourt Asset Management
Sub-Advisor to the Ninepoint Cannabis & Alternative Health Fund