Pot (Cannabis) Stocks

Discussion in 'Markets & Economies' started by Ipv6Ready, Sep 8, 2018.

  1. Ipv6Ready

    Ipv6Ready Well-Known Member Silver Stacker

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    Anyone following this sector?

    Huge run on US Stockmarket, these stocks are drawing all the moonshot investors and pumpers.

    Been looking at a few and still think many of these stocks can go up ten or hundred times earning and can see mergers of POT stocks to gain scale and size over the next 5 years.

    Seems like Budweiser or Coca Cola is looking closely to get in early.

    20 years ago people used to say google who, in 20 years time a POT stock could own Starbucks or Pizza Hut.

    Bearing in mind they are in fully regulated sector with more US states and countries legalising its use, just randomly picking a handful could make a big payday.

    Ten largest (legal and listed) producers currently produce about 100 tons to 40 tons of greenhouse pot per annum.

    Nine of the top ten are in the progress of expanding green house capacity double to ten times their current floor space.

    since they are listed it is easy to verify greenhouse capacity
     
    Last edited: Sep 9, 2018
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  2. oziwassabi

    oziwassabi Well-Known Member Silver Stacker

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    I was introduced to an aussie penny stock in this space by a friend so have done a little investigating/trading.
    As with a lot of the tech stocks back in the early adoption days, there are a lot of smaller companies setting up to try and take advantage of the hype as well as few larger companies that are establishing themselves and registering various IP's and patents focusing on the medical applications area.
    Perhaps a lot of the smaller companies with the usefull techs will be gobled up by the global pot players (Canopy, Aurora) or multinationals (such as coca cola, BAT) once they can validate their processes, whilst the remaining will drain money from investors and never be heard of again... I seem to have a nack for finding the later when playing in the markets o_O
    It seems the Canadians are doing well in this space.

    I think the user scottreeve(?) posted some time ago about this?
     
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  3. Ipv6Ready

    Ipv6Ready Well-Known Member Silver Stacker

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    When one considers that unlike, tech boom (vapourware) or crypto boom (no real life application), every POT stock has a product to sell.

    I think there are two ways of looking at, will POT companies become like Coca Cola / Pizza Hut or huge but unknown like JBR Avocadoes or AveHASS (both are multi billions dollar companies)
     
    Last edited: Sep 9, 2018
  4. Gullintanni

    Gullintanni Well-Known Member

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    Even here in NZ where pot is illegal we have a couple of companies that have gained EXCEPTIONS for growing and exporting.
    The problem i see here in NZ is that currently only Maori companies have been granted these exemptions so anyone else is shit out of luck.
     
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  5. SlyGuy

    SlyGuy Active Member

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    These go in spurts. I think these stocks were all the rage about 3 or 4 years ago (search for price history on CANN and PHOT etc etc etc). They all flew up for a month or two on hype and day traders capitalizing on greater fool theory, then they fizzled out even faster due to no real earnings or underlying assets. The SEC halted trading on a few of them. The graphs all look sorta like BitCoin will: a few people made some money, and most lost it all.

    GWPH (G&W pharma) is the only one that I know of which survived and did steadily ok (many regular S&P stocks did better... and paid dividends), and their balance sheets are on very sketchy ground for their valuations. Their P/E ratio being "N/A" should be your first clue that they're priced more ideas and sentiment and possibility than any actual profits.

    ...IMO, these are very risky and best left to day traders or other "get rich quick" types. You might see a blip rise in cannibus-related stock prices when a new state legalizes or something in the news is viewed as positive, but it will be hard to time it and based much more on hype than any real substance. Chances are that if there ever becomes a substantial profitable market for medical marij, then one of the regular tobacco or food farming outlets will control it (Phillip Morris, RJ Reynolds, Kraft, etc etc) via engineering a mass production system or buyout of one. Unfortunately, even in that "best case scenario," you don't make too much when you hold the shared of the small companies that get bought out. The big companies aren't stupid, and they won't typically overpay for the buyout.

    You would probably be wiser just owning MO or PM (NYSE)... or BAT (if you have access to London SE). Those giant companies have decades of strong growth and dividends... and they are the surest bets to benefit from a tobacco-like product (pot) entering the legal USA market.

    When it comes to risky stuff like this, there is the only saying from Peter Lynch: "You don't lose anything by not owning a stock." I would say that applies well here. It doesn't matter if your brother bought Tesla for $25 or your neighbor got BTC for $100. Yes, everyone hates missing potential gains, but back in reality, you haven't lost anything by not rolling the dice on those huge question mark picks. There are many, many much better fundamental values in the paper markets which have real earnings and assets... and they often even pay dividends.

    Besides, if any of these cannabis companies take off and are clearly becoming profitable, then they will still be a good investment at that time also. Almost anything that is a good investment today will surely be a good investment a year from now also, so you can sidestep the hype and mitigate your risk by simply waiting until the picture becomes more clear. GL
     
    Last edited: Sep 29, 2018
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  6. milled

    milled Active Member

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    risky stuff and as above, prone to speculation. MXC is one that I looked at several years ago. I haven't looked since, but from memory it was an Israeli outfit which began selling cannabis product cosmetics and if I remember it right was in the development process of something called "Nose-Sip" a medical nasal inhaler of cannabinoids as an antiepileptic drug. As a medical product, it would need to go through types of trials and wait a long time before approval by TGA.

    What is more relevant is that legislation to legalise cannabis has bipartisan support in the ACT and that means different ways of profiting. The ACT has a small population, about 500000 but lies in the west of NSW, so the bigger market would be that and perhaps related tourism. I don't see it as a good thing, but money doesn't care what I think.
     
  7. Ipv6Ready

    Ipv6Ready Well-Known Member Silver Stacker

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    Very risky, that’s why one must invest in these faddish momentum stocks just as every mainstream pundits starts talking about it and on its way up...

    Once all the pundits are in agreement giving advice it is basically pumping the market but when few pundits start saying it’s a bubble, you get ready to parachute off and get out as it will burst... just like bitcoin.
     
  8. SlyGuy

    SlyGuy Active Member

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    Ding ding ding

    https://www.barrons.com/articles/cronos-group-altria-investment-1544463992
     
  9. GRETZKY427

    GRETZKY427 Active Member Silver Stacker

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    Are all the companies over in the US currently or is there talks/have already started in Australia ?

    Cheers, HAPPY STACKING :)
     
  10. SlyGuy

    SlyGuy Active Member

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    Most of the companies are Canadian... but a lot of them are traded on US exchange. You can surely find an online article with all of them (seems like new ones every week), but the major ones are Canopy, Aurora, etc.

    ...it is a fool's errand, though. The big tobacco companies will just buy the good ones and out-compete the weaker ones. The tobacco giant stocks are always "unclean" stocks since tobacco is not exactly healthy, but money is money... they are good buys since they pay nice dividends and will ultimately reap the best of any recreational or medical marij market growth.

    Even the decent Canadian marij companies have waaaay too many shares outstanding since they just buy things by creating more and more shares. I have a few hundred shares of ACB (one of the biggest, with decent fundamentals) that I picked up last summer before they went from Toronto exchange onto the US exchange, and it did not spike as well as I hoped. It, like any of them, also pays zero dividend, so the only way I've made anything from it is by selling options every month to fools who think the stock is going to skyrocket up. That is unlikely at best with now nearly a billion shares outstanding, lol. It usually goes up a bit here and there just enough to excite people, but it is generally down or stays flat since new companies keep coming in and they all keep adding more shares. I think I bought ACB around $7 USD and it went higher yet is now around $5 or something. People keep buying my options every month thinking it will go to $10 or even higher, though. I can't complain. Lol
     
    Last edited: Jan 4, 2019

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