Cannabis stocks are apparently some of the hottest stocks in the market with a number of financial experts giving the industry the thumbs up and the stocks performing quite well compared to stocks of other industries. The health of the cannabis stock market has led to capital investment from a growing number of investment bodies signalling the confidence in the cannabis market. A number of large scale companies listed in the Canadian and US stock exchanges have performed very well since listing. Cannabis is being seen as a long term industry to watch out for and is expected to shake up industries like pharmaceuticals, petrochemicals, construction, food, beverages, wellness, alcohol and tobacco industries in the coming years. The sustainable nature of the plant and its industrial applications and its huge potential to scale up globally in the coming decades mean cannabis stocks are worth investing in.
It is worth noting that during the fake pandemic Covid, and the resulting lock down, many of the US states that legalized cannabis for adult use declared cannabis as an essential service, along with food and other medicine. This clearly shows the growing awareness of cannabis as a key part of the economy and human well being. Cannabis as a powerful means of sustainable economics not only represents benefits for the economy, its growers and consumers, but also for investors, whether institutional or individual. Cannabis as a means of wealth creation for the individual is much better than wealth creation through petrochemicals, synthetic pharmaceuticals, construction, alcohol and tobacco industries that destroy humans and the planet. The global legalization of cannabis will enable many more cannabis businesses to be created, enabling a large number of individual investors to invest in them and create wealth that supports sustainable economics for the world. This will aid both the cannabis industry and the individual investor. Currently the number of individual investors are very limited, mostly belong to the high net worth category. Small investors veer away from cannabis stocks mainly due to its illegal status globally.
With new companies being created all the time and many going public to fuel their rapid growth trajectories, cannabis stocks are starting to sizzle.
Related articles
The following set of articles related to the subject are taken from various media. Words in italics are the thoughts of yours truly at the time of reading the article.
'Abstract
This paper analyzes the historical stock returns of 10 medicinal cannabis companies for the period between 2015 and 2020, when the legalization of recreational cannabis was debated in Canada. The results of our analysis indicate that the industry was responsive to the announcements of regulatory change that led towards legalization. Furthermore, we compare the performance of cannabis companies to that of similar businesses. The results of the comparative analysis indicate that the performance of the matched pairs is largely correlated over time. Additionally, the pre-legalization performance of cannabis companies was better than their post-legalization performance. Given that cannabis companies did not outperform their matched pair, we can confirm that legalization did not have a significantly positive effect on the industry. We can also infer that, from a stock market perspective, the legalization of recreational cannabis has been unsuccessful thus far.'
https://www.sciencedirect.com/science/article/abs/pii/S031359262100134X
This paper analyzes the historical stock returns of 10 medicinal cannabis companies for the period between 2015 and 2020, when the legalization of recreational cannabis was debated in Canada. The results of our analysis indicate that the industry was responsive to the announcements of regulatory change that led towards legalization. Furthermore, we compare the performance of cannabis companies to that of similar businesses. The results of the comparative analysis indicate that the performance of the matched pairs is largely correlated over time. Additionally, the pre-legalization performance of cannabis companies was better than their post-legalization performance. Given that cannabis companies did not outperform their matched pair, we can confirm that legalization did not have a significantly positive effect on the industry. We can also infer that, from a stock market perspective, the legalization of recreational cannabis has been unsuccessful thus far.'
https://www.sciencedirect.com/science/article/abs/pii/S031359262100134X
'While volatility has remained high throughout 2021, investors in cannabis ETFs have likely been pleased with their returns. For those who've been able to ride it out despite the significant pullback from February highs, investors are still sitting on year-to-date gains well into the double digits. Two of the larger ETFs in the space, the ETFMG Alternative Harvest ETF (MJ) and the Amplify Seymour Cannabis ETF (CNBS), are up more than 40% on the year, while a third, the Global X Cannabis ETF (POTX), has gained 36%.'
https://www.thestreet.com/etffocus/market-intelligence/marijuana-etfs-up-cannabis-sales-20-billion-2021
'If 280E no longer applies, many investors expect tax savings would directly flow into net income, and we have seen some simplistic analyses that point to 50% to 120% increases in earnings.
But we think much of the tax savings will be reinvested into the business instead, because a tax cut is just a low-cost source of capital and the nascent legal cannabis industry still needs to invest billions to build out the entire supply chain.
All the money that went to 280E taxes won’t flow to investors via increased free cash flow or distributions, but smart investors will be happy to own a larger, faster-growing business in the future with less equity dilution today.'
https://mjbizdaily.com/how-will-cannabis-stocks-be-impacted-if-section-280e-is-scrapped/
https://www.thestreet.com/etffocus/market-intelligence/marijuana-etfs-up-cannabis-sales-20-billion-2021
'If 280E no longer applies, many investors expect tax savings would directly flow into net income, and we have seen some simplistic analyses that point to 50% to 120% increases in earnings.
But we think much of the tax savings will be reinvested into the business instead, because a tax cut is just a low-cost source of capital and the nascent legal cannabis industry still needs to invest billions to build out the entire supply chain.
All the money that went to 280E taxes won’t flow to investors via increased free cash flow or distributions, but smart investors will be happy to own a larger, faster-growing business in the future with less equity dilution today.'
https://mjbizdaily.com/how-will-cannabis-stocks-be-impacted-if-section-280e-is-scrapped/
'While these institutions’ compliance officers could change their minds about allowing access to the sector, the more likely read is that when you see an elephant or two, the herd isn’t far behind. Legitimate growth at reasonable multiples with an expanding total addressable market would excite any investor but for small-cap growth managers, it’s their lifeblood; and those animal spirits have now been unleashed.
As other portfolio managers await approval from upstairs, Advisor Shares announced plans to launch an exchange-traded fund (ETF) focused on U.S. multistate operators as early as month-end. If successful, it would create the first NYSE-listed vehicle that provides pure exposure to U.S. cannabis stocks and it could channel much-needed liquidity into the space.
There’s no denying that challenges remain for the sector, the markets and the world at large; and yes, the pandemic disrupted life as we knew it. But in time, as history reflects on 2020, we believe the emergence of the U.S. cannabis industry as an economic driver and job creator will be seen as one of the most important and positive progressions of this era.'
https://www.investopedia.com/barbarians-at-the-gate-institutions-are-buying-u-s-cannabis-stocks-5075004
'Massachusetts-based Curaleaf made its trading debut on the Canadian Securities Exchange on Monday after a $400 million private placement.
The multistate cannabis firm raised almost three times its initial offering target of $150 million, giving the company a valuation of $4 billion.'
https://mjbizdaily.com/marijuana-firm-curaleaf-makes-stock-trading-debut-in-canada-with-4-billion-valuation/
'Shares of cannabis companies traded broadly, and in many cases sharply higher Wednesday, as U.S. midterm elections are likely to usher in a green wave, with Michigan voting to legalize recreational pot and other states supporting medical marijuana likely just the beginning.
https://www.marketwatch.com/story/cannabis-stocks-surge-again-after-michigan-votes-to-legalize-recreational-pot-2018-11-07
'Three top American cannabis firms made their trading debuts on the Canadian Securities Exchange (CSE) this week, continuing the frenzy of U.S.-based marijuana companies turning to Canada’s public markets to raise capital.'
https://mjbizdaily.com/us-cannabis-firms-list-shares-canadian-stock-exchange/
'A few big news items came out of the cannabis industry this week.'
https://www.benzinga.com/markets/cannabis/19/01/13042073/pot-stocks-etfs-top-news-and-data-from-the-cannabis-industry-this-we
'After a monumental 2018 for cannabis — with Canada passing full legalization, the first pot company going public on the U.S. stock market and the substance becoming even more mainstream — CNBC's Jim Cramer is now looking ahead.
"I still think that legalized weed is one of the great growth stories of our era," he said Monday. "So, for those of you who want to speculate on the bull market for bud — hopefully at lower levels than where we are right now — I've got five predictions for the future of the marijuana industry."'
https://www.cnbc.com/2019/01/28/cramers-pot-predictions-for-2019-legalization-deals-brands.html
'This stands to be a big year of sales growth for marijuana stocks. Even with a number of pot stocks operating on noncalendar fiscal years -- i.e., their fiscal year ends on June 30 or perhaps a different date other than Dec. 31 -- and therefore unable to take full advantage of Canada's legalization and/or state-level expansion in the U.S., Wall Street and investors are still expecting big sales figures.
When perusing more than four dozen marijuana stocks, 10 stand out as being on track to produce north of $100 million (U.S.) in sales in 2019. And when I say "2019," I mean each respective company's fiscal 2019. That could mean ending on June 30, 2019, or it could represent a normal calendar year, meaning any comparisons between companies probably wouldn't be apples to apples. This screen was also limited by minimal coverage from Wall Street firms, and, in many instances, sales estimates from just one or two analysts.'
https://www.fool.com/investing/2019/02/20/10-pot-stocks-on-pace-for-more-than-100-million-in.aspx
'"I've never seen a sector have the political tailwinds, the economic tailwinds, and the wellness tailwinds that this sector potentially has," he said on "Fast Money."'
https://www.cnbc.com/2019/02/14/pot-industry-has-tremendous-tailwinds-the-big-shorts-danny-moses.html
'There's no doubt that cannabis investing has never been more popular. Many high-profile companies serving the marijuana market have posted amazing gains to start 2019, and the prospects for further growth in the budding industry are only looking brighter as the year goes on.
The race to profit from the booming marijuana market has led to dramatic share-price increases for key players in the industry. Although huge numbers of companies with exposure to cannabis have seen their stock prices soar, four stand out for having delivered a double to their shareholders in just the first two and a half months of the year. Below, we'll look more closely at these four top performers and whether their early success points to even better times ahead.'
https://www.fool.com/investing/2019/03/20/these-marijuana-stocks-have-doubled-so-far-in-2019.aspx
'Shanghai Shunho -- whose products include cardboard and filament -- had soared 378 percent this year through Wednesday, while Jilin Zixin rose 142 percent, joining the euphoria that’s driven a rally in marijuana-focused stocks elsewhere in the world. Cultivation of industrial cannabis is legal in China but only for use in fiber and seeds, the China National Narcotic Control Committee says. Other uses including for medical purposes are forbidden.
Chinese investors have piled into stocks with the slightest hint of a link to industrial cannabis, ignoring companies’ warnings and a government notice said to urge authorities to tighten approval of hemp-related licenses. Shunho’s issued at least six warnings in the past two months alone reminding investors of risks in hemp.'
https://www.bloomberg.com/news/articles/2019-03-28/cannabis-craze-comes-to-china-stocks-drawing-regulator-s-ire
'The S&P/TSX 60 index will add Canopy Growth, an Ontario-based cannabis company, on April 18.
Canopy is believed to be the first cannabis company included in the Canadian Large-Cap Index.'
https://mjbizdaily.com/marijuana-giant-canopy-growth-to-join-sp-tsx-60-index
'British Columbia-based Tilray’s stock soared Thursday in the company’s first day of trading after it became the first marijuana company to complete an initial public offering in the U.S.'
https://www.seattletimes.com/business/marijuana-company-tilrays-stock-climbs-nearly-32-percent-in-first-days-trading/
'Bottom line: Things have really changed over the past year or two when it comes to investing in cannabis stocks. Real money has shown up, and it’s being deployed now beyond just Canada. Better and better companies that are more representative of the U.S. cannabis industry are now available to public company investors, who have a chance to participate in its growth compared to just gambling on pump-and-dumps for short-term trading gains only a few years ago.'
https://www.leafly.com/news/industry/cannabis-stocks-are-soaring-and-this-rally-is-based-on-reality
'Limited supply and red-hot demand for investment opportunities in Canada’s marijuana industry have caused stock prices and market capitalizations for cannabis companies to surge ahead of legal adult-use sales later this month.'
https://mjbizdaily.com/chart-canadian-cannabis-companies-market-caps-rise-into-the-11-figures/
This looks to me like an opportunity to get into a genuine green energy business that is a sustainable way to the future, closer to green reality and further away from battery-charged science fiction.
https://www.cnbc.com/2018/09/27/tesla-falls-4percent-on-report-elon-musk-sued-by-sec.html
'Reefer Madness has gripped Wall Street..
Billions of dollars have poured into the stocks in the last few months, and investors smell green (money, not leaves) in the air as they consider the opportunities these companies might have as the marijuana market in Canada grows, along with the possibility that the U.S. and other countries could follow suit.'
https://apnews.com/032c53df79c64b9185c63a4f74a6c18d
Ganja is no short term man-made phenomenon...its been around and will be for a long, long time...
'The $1.5 billion short bet against cannabis stocks is costing $2.4 million a day, or 200 times more than an equivalently sized bet against a basket of stocks including Apple, Amazon, IBM and Goldman Sachs, said Ihor Dusaniwsky, head of predictive analytics at S3 Partners.'
https://www.nytimes.com/2018/09/17/business/dealbook/shorting-cannabis-stocks-costly.html
As other portfolio managers await approval from upstairs, Advisor Shares announced plans to launch an exchange-traded fund (ETF) focused on U.S. multistate operators as early as month-end. If successful, it would create the first NYSE-listed vehicle that provides pure exposure to U.S. cannabis stocks and it could channel much-needed liquidity into the space.
There’s no denying that challenges remain for the sector, the markets and the world at large; and yes, the pandemic disrupted life as we knew it. But in time, as history reflects on 2020, we believe the emergence of the U.S. cannabis industry as an economic driver and job creator will be seen as one of the most important and positive progressions of this era.'
https://www.investopedia.com/barbarians-at-the-gate-institutions-are-buying-u-s-cannabis-stocks-5075004
'Massachusetts-based Curaleaf made its trading debut on the Canadian Securities Exchange on Monday after a $400 million private placement.
The multistate cannabis firm raised almost three times its initial offering target of $150 million, giving the company a valuation of $4 billion.'
https://mjbizdaily.com/marijuana-firm-curaleaf-makes-stock-trading-debut-in-canada-with-4-billion-valuation/
'Shares of cannabis companies traded broadly, and in many cases sharply higher Wednesday, as U.S. midterm elections are likely to usher in a green wave, with Michigan voting to legalize recreational pot and other states supporting medical marijuana likely just the beginning.
https://www.marketwatch.com/story/cannabis-stocks-surge-again-after-michigan-votes-to-legalize-recreational-pot-2018-11-07
'Three top American cannabis firms made their trading debuts on the Canadian Securities Exchange (CSE) this week, continuing the frenzy of U.S.-based marijuana companies turning to Canada’s public markets to raise capital.'
https://mjbizdaily.com/us-cannabis-firms-list-shares-canadian-stock-exchange/
'A few big news items came out of the cannabis industry this week.'
https://www.benzinga.com/markets/cannabis/19/01/13042073/pot-stocks-etfs-top-news-and-data-from-the-cannabis-industry-this-we
'After a monumental 2018 for cannabis — with Canada passing full legalization, the first pot company going public on the U.S. stock market and the substance becoming even more mainstream — CNBC's Jim Cramer is now looking ahead.
"I still think that legalized weed is one of the great growth stories of our era," he said Monday. "So, for those of you who want to speculate on the bull market for bud — hopefully at lower levels than where we are right now — I've got five predictions for the future of the marijuana industry."'
https://www.cnbc.com/2019/01/28/cramers-pot-predictions-for-2019-legalization-deals-brands.html
'This stands to be a big year of sales growth for marijuana stocks. Even with a number of pot stocks operating on noncalendar fiscal years -- i.e., their fiscal year ends on June 30 or perhaps a different date other than Dec. 31 -- and therefore unable to take full advantage of Canada's legalization and/or state-level expansion in the U.S., Wall Street and investors are still expecting big sales figures.
When perusing more than four dozen marijuana stocks, 10 stand out as being on track to produce north of $100 million (U.S.) in sales in 2019. And when I say "2019," I mean each respective company's fiscal 2019. That could mean ending on June 30, 2019, or it could represent a normal calendar year, meaning any comparisons between companies probably wouldn't be apples to apples. This screen was also limited by minimal coverage from Wall Street firms, and, in many instances, sales estimates from just one or two analysts.'
https://www.fool.com/investing/2019/02/20/10-pot-stocks-on-pace-for-more-than-100-million-in.aspx
'"I've never seen a sector have the political tailwinds, the economic tailwinds, and the wellness tailwinds that this sector potentially has," he said on "Fast Money."'
https://www.cnbc.com/2019/02/14/pot-industry-has-tremendous-tailwinds-the-big-shorts-danny-moses.html
'There's no doubt that cannabis investing has never been more popular. Many high-profile companies serving the marijuana market have posted amazing gains to start 2019, and the prospects for further growth in the budding industry are only looking brighter as the year goes on.
The race to profit from the booming marijuana market has led to dramatic share-price increases for key players in the industry. Although huge numbers of companies with exposure to cannabis have seen their stock prices soar, four stand out for having delivered a double to their shareholders in just the first two and a half months of the year. Below, we'll look more closely at these four top performers and whether their early success points to even better times ahead.'
https://www.fool.com/investing/2019/03/20/these-marijuana-stocks-have-doubled-so-far-in-2019.aspx
'Shanghai Shunho -- whose products include cardboard and filament -- had soared 378 percent this year through Wednesday, while Jilin Zixin rose 142 percent, joining the euphoria that’s driven a rally in marijuana-focused stocks elsewhere in the world. Cultivation of industrial cannabis is legal in China but only for use in fiber and seeds, the China National Narcotic Control Committee says. Other uses including for medical purposes are forbidden.
Chinese investors have piled into stocks with the slightest hint of a link to industrial cannabis, ignoring companies’ warnings and a government notice said to urge authorities to tighten approval of hemp-related licenses. Shunho’s issued at least six warnings in the past two months alone reminding investors of risks in hemp.'
https://www.bloomberg.com/news/articles/2019-03-28/cannabis-craze-comes-to-china-stocks-drawing-regulator-s-ire
'The S&P/TSX 60 index will add Canopy Growth, an Ontario-based cannabis company, on April 18.
Canopy is believed to be the first cannabis company included in the Canadian Large-Cap Index.'
https://mjbizdaily.com/marijuana-giant-canopy-growth-to-join-sp-tsx-60-index
'British Columbia-based Tilray’s stock soared Thursday in the company’s first day of trading after it became the first marijuana company to complete an initial public offering in the U.S.'
https://www.seattletimes.com/business/marijuana-company-tilrays-stock-climbs-nearly-32-percent-in-first-days-trading/
'Bottom line: Things have really changed over the past year or two when it comes to investing in cannabis stocks. Real money has shown up, and it’s being deployed now beyond just Canada. Better and better companies that are more representative of the U.S. cannabis industry are now available to public company investors, who have a chance to participate in its growth compared to just gambling on pump-and-dumps for short-term trading gains only a few years ago.'
https://www.leafly.com/news/industry/cannabis-stocks-are-soaring-and-this-rally-is-based-on-reality
'Limited supply and red-hot demand for investment opportunities in Canada’s marijuana industry have caused stock prices and market capitalizations for cannabis companies to surge ahead of legal adult-use sales later this month.'
https://mjbizdaily.com/chart-canadian-cannabis-companies-market-caps-rise-into-the-11-figures/
This looks to me like an opportunity to get into a genuine green energy business that is a sustainable way to the future, closer to green reality and further away from battery-charged science fiction.
https://www.cnbc.com/2018/09/27/tesla-falls-4percent-on-report-elon-musk-sued-by-sec.html
'Reefer Madness has gripped Wall Street..
Billions of dollars have poured into the stocks in the last few months, and investors smell green (money, not leaves) in the air as they consider the opportunities these companies might have as the marijuana market in Canada grows, along with the possibility that the U.S. and other countries could follow suit.'
https://apnews.com/032c53df79c64b9185c63a4f74a6c18d
Ganja is no short term man-made phenomenon...its been around and will be for a long, long time...
'The $1.5 billion short bet against cannabis stocks is costing $2.4 million a day, or 200 times more than an equivalently sized bet against a basket of stocks including Apple, Amazon, IBM and Goldman Sachs, said Ihor Dusaniwsky, head of predictive analytics at S3 Partners.'
https://www.nytimes.com/2018/09/17/business/dealbook/shorting-cannabis-stocks-costly.html
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