Marijuana ETFs are Moving

Since the elections in early November, marijuana stocks and marijuana ETFs have been moving higher at a healthy clip. Now may be a perfect time for investors who have been waiting to get into this industry but didn’t want to be too early.

The moves come after four States passed the legalization of recreational marijuana use, which now brings the total number of US States to 15 that allow citizens to consume marijuana in essentially the same manner that someone’s consumers alcohol.

Furthermore, 2 more States passed laws allowing marijuana to be used for medical purposes. Now the US has 35 States that allow medical marijuana usage.

Another catalyst is that with Vice President Joe Biden winning the White House, many believe the push for national level decriminalization of marijuana is more likely to occur. This is even though the Republicans still control the Senate.

Finally, as I have mentioned before, with the pandemic and massive budget deficits occurring all around the country, State and local governments, and even perhaps the Federal government may start looking at alternative ways to increase tax revenue. One easy avenue is to allow marijuana use and place a hefty tax on it, as the government already does with alcohol and tobacco sales. As things currently sit in most States, those that have not passed the legalization of recreational use would argue that marijuana is being sold; it’s just not being taxed. Most politicians would probably agree with that to some extent, and some would undoubtedly love to get some more tax money, especially during times like these. Continue reading "Marijuana ETFs are Moving"

Mexico Ready To Unleash A $2 Billion Market

The United States is dominating the cannabis headlines because four states are set to vote on legalization on November 3 with the U.S. presidential election.

Cannabis investors could have easily missed a huge investment opportunity that is rapidly developing just south of the U.S. border.

Mexico is on the fast track to legalize recreational cannabis – most likely by the end of the year. Here are some more details from marijuanamoment.com.

The Mexican Senate will likely vote on a bill to legalize marijuana within the next two weeks, the chamber’s majority leader recently said.

It’s not clear if the legislation will go through the committee process or straight to the floor given that tight timeline. Zara Snapp, a legalization activist with the Instituto RIA and the coalition #RegulacionPorLaPaz, told Marijuana Moment that advocates have similarly heard from senators that the plan is to quickly pass the proposal and they’re “hopeful” that’s the case.

If the Senate passes the legal cannabis bill it will still have to go before the other house of the nation’s Congress, the Chamber of Deputies. President Andrés Manuel López Obrador said in August that marijuana reform legislation will advance in the new session. The bill was approved by several committees earlier this year, but the COVID-19 outbreak derailed negotiations.

Legalization in Mexico is important for two reasons. Continue reading "Mexico Ready To Unleash A $2 Billion Market"

Canopy CEO Predicts U.S. Legalization by 2022

I call it the “holy grail” of the cannabis industry – a game-changing event that would mint the first cannabis billionaire and richly reward early investors.

I’m talking about the federal legalization of cannabis.

Some say it’s still a pipe dream, years away at best. However, the reality is that federal legalization could be right around the corner.

If you don’t believe me, check out what the CEO of the largest cannabis company had to say in an interview with Jim Cramer on Mad Money.

Here’s the clip from CNBC.

David Klein, the head of Canopy Growth, told CNBC’s Jim Cramer on Tuesday that as states continue to gradually permit medical and recreational use of marijuana, Congress will have no choice but to act.

“My assumption is that 2022, for me, is the magic number,” he said in a “Mad Money” interview. “I think, as you watch more and more states move to legalization for medical or rec, you really bring in almost two more senators each time who are really going to feel compelled to not make criminals out of the people in their state who are doing what’s legal in their particular state.”

Why Klein’s Comments Are an Important Signal

#1 – CEOs have an incentive to establish realistic goals that are attainable. It doesn’t do a CEO any good to set expectations really high and then fall short. For Klein to publicly project legalization in 2022, it tells me he knows about things that are happening behind the curtain. I think he’s showing his hand.

#2 – U.S. federal legalization by 2022 is the most optimistic projection that I’ve heard from anyone on Klein’s level.

#3 – As the CEO of Canopy, Klein has access to the best contacts and information in the industry. His opinion about the cannabis industry carries a lot of weight.

Current Events Are Pointing Towards Legalization

COVID-19 just made the case for legalizing cannabis stronger than ever. The U.S. economy shed around 40 million jobs in eight weeks. According to recent reports, many of those jobs are never coming back. Tax revenue has plummeted. Officials are calling it catastrophic. Politicians are desperate for new sources of taxes. Continue reading "Canopy CEO Predicts U.S. Legalization by 2022"

Will Canopy Growth Corp (CGC) Jump 250%?

Aurora Cannabis (ACB) just jumped 250% in two days after reporting third-quarter earnings that crushed expectations.

Not many people saw that huge jump coming. If you missed it – don’t worry.

I see a high probability that the same pattern will repeat itself on Friday morning when the largest cannabis company in the world reports highly anticipated fourth-quarter earnings.

Here’s what you need to know and how to play Friday’s big event.

Aurora Cannabis (ACB) is one of the largest cannabis companies in the world. Shares of ACB jumped 250% in two days last week after reporting third-quarter results that crushed expectations.

Here are some more details from Aurora.

  • Net revenue, excluding provisions, of $78.4 million in Q3 2020 was up 18% quarter over quarter. Cannabis net revenue, excluding provisions, was $72.6 million, up 15% over Q2 2020.
  • Consumer cannabis net revenue, excluding provisions, was up 24% from the prior quarter to $41.5 million, demonstrating the impact of the launch of Daily Special, Aurora’s value brand, and a full quarter of Cannabis 2.0 products. Medical cannabis net revenue, both Canadian and international, showed healthy growth of 13.5% overall.

Aurora Cannabis Announces Fiscal Third Quarter 2020 Results & Operational Reset Update

Canopy Growth Corp

These results send an important and encouraging message to investors – cannabis stocks are shifting into a bullish phase.

In 2019, pot stocks fell short of lofty expectations. Today, the sector is crushing more realistic expectations.

Canopy Growth Corp (CGC) is the largest cannabis company in the world with a market cap of $7 billion and operations on four continents.

Canopy is scheduled to report fourth-quarter results on Friday, May 29, 2020, before the opening bell. Aurora’s impressive results tell me that Canopy is also going to crush expectations.

Here’s why… Continue reading "Will Canopy Growth Corp (CGC) Jump 250%?"

Cannabis Sales Surge On Coronavirus

Coronavirus is having a devastating effect on many industries in the United States and across the globe.

For example, millions of US citizens are canceling travel plans and that is crushing US airline industry revenue. That's why the US airline industry just asked for a $50 billion financial bailout from the federal government that would be three times the size of the airline bailout after September 11.

This big drop in sales is causing a lot of pain for shareholders. Airline stocks have been getting hammered.

United Airlines Holdings Inc. (UAL) is down -60% from the 52-week high, much worse than the S&P 500’s -12% decline from the 52-week high.

UAL

However, not all industries are struggling right now. In fact – some are thriving.

Cannabis sales have been one of the few bright spots while most industries are in a tailspin. Continue reading "Cannabis Sales Surge On Coronavirus"