Analysis originally distributed on July 05, 20176 By: Michael Vodicka of Cannabis Stock Trades
Three weeks ago I wrote about Mexican President Enrique Pena Nieto signing a bill legalizing the use of medicinal cannabis THC, CBD, and all cannabis derivatives. The new legislation also makes it legal to produce and distribute cannabis for medical and therapeutic purposes.
This week, the global trend of cannabis legalization continues in the U.S.
On July 1, Nevada became the fifth U.S. state to legalize recreational cannabis.
This is going to be another huge cannabis market, fueled by the tens of millions of tourists that visit Las Vegas every year.
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Right out of the chute, demand is already blowing past expectations.
Here's a report from the Denver Channel
"The demand for recreational marijuana has been such that dispensaries had to turn away customers in line over the weekend, and at least one extended its hours of operation. Dispensaries reported wait times of 45 minutes to an hour Saturday afternoon and up to 20 minutes Sunday.
The Euphoria Wellness dispensary had 50 people waiting to make purchases mid morning Monday. Its marketing coordinator, Jim Ferrence, said bud tenders helped at least 1,000 customers during the first two days of legal recreational pot sales".
According to Marijuana Business Daily, sales could reach $75 million in the first 12 months and eventually top off between $450 and $550 million annually as the cannabis trade moves out of the hands of illegal drug cartels and into the hands of law-abiding, tax-paying businesses.
As you can see this is a huge opportunity for young cannabis companies in Las Vegas and Nevada - and an equally big opportunity for cannabis investors.
Here's How You Can Potentially Profit
Terra Tech (OTC:TRTC) owns and operates five cannabis dispensaries under the name Blum. Its largest dispensary - for now - is located in Oakland. Its other four dispensaries are located in Nevada - with three of those location in Las Vegas and the final in Reno.
Despite its potential, Terra Tech has had a pretty brutal run in 2017.
Shares opened the year trading at $0.35. In May shares bottomed out at $0.16 - a 56% decline.
Those declines were driven by concerns over Terra TechTMs second quarter earnings report from April.
The problem that has been plaguing Terra Tech is that as revenue grows, so does its net loss.
For example, in the second quarter, revenue was up 340% from the same period last year to $6.8 million. Obviously that's awesome.
But while revenue increased, so did its loss. Net loss increased to $10.1 million from $4.1 million. Earnings fell from a loss of $0.1 to $0.02.
However, it looks like investors are once again getting interested in Terra Tech as the Nevada recreational market takes flight.
On July 3 when reports coming out of Las Vegas showed that early cannabis demand was stronger than even the most bullish projections, Terra Tech got a nice boost, jumping from $0.195 to $0.24, about 23%. Take a look at the nice bounce below.
The Big Picture Analysis On Terra Tech
Terra Tech still has a lot of work ahead to continue growing sales and move into profitability. Right now it looks like this stock is moving back into favor with investors with Nevada going legal on July 1. This could be the spark that triggers a longer-term rally.
Moving forward, I will be advising members of Cannabis Stock Trades on whether this is a long-term holding or a chance to grab a quick profit.
The information contained in this post is for informational and educational purposes only. The trading ideas and stock selections represented on the Cannabis Stock Trades website are not tailored to your individual investment needs. Readers and members are advised to consult with their financial advisor before entering into any trade. Cannabis stocks carry a certain level of risk and we accept no responsibility for any potential losses. All trades, patterns, charts, systems, etc. discussed are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author and do not necessarily reflect those of the publisher.