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Chris Lau

Will Cannabis Sector Survive Bubble Burst?

A few companies that will make it through not being apparent, but I wouldn't say the industry is toast. The legal industry has hardly begun to grow and there's no doubt that holding equity in the industry leaders will be lucrative. Unless my stop-losses manage to trigger, I don't really care where these stock prices sit. I purchased my pot stocks with the intent of seeing at least one of these companies being bought out or leading the industry. A speculative play I wouldn't suggest for anyone who needs to survive off of this investment.

But I'd be more upset missing out on one of these companies going all the way than I will be taking these losses. There is no doubt that a few industry leaders will make some people a hell of a lot of money. Here's hoping I picked one of them.

above notes via a user.

Tickers: $ACB $CRON $CGC

Avoid: $TLRY, $CTST

User barry writes:

The fundamentals all still are heavily in favor of a robust cannabis sector if the timeline is long enough. Currently, that's 5-10 years.

Look at this year, other than stock prices. VC doubled over last year in July. Retail builds are way up, research way up, employment numbers way up, grow space way up. The industry is rolling right along by not using stock market cap for financing.

The US is advancing banking legislation. CGC's appointment of STZ CFO David Klein as board chair is a great move for the future.

It's just that, right now, the industry is way overextended financially. Overall, it pursued growth over anything else. Now, it has to deal with the effects. It's the consolidation phase I have expected to come.

US legalization is eventually going to leave Canada in the dust. I'm not even sure if these Canadian companies will be based in Canada longer term. The enthusiasm about pot profits was based on a much more liberal regulatory environment than the Canadian governments wound up providing. People gripe about California's regulation. It's minor compared to Canada, where even branding is severely restricted.

A big immediate bright spot is Illinois in January. Eventually, Mr. Market will come snooping around these stocks again.

Oh well, at least it has cleaned Seeking Alpha out of all the "pot guru" authors who were pumping and dumping before. Coverage of the sector is WAAAY down. :-)

$CGC, Canopy Growth Corporation / H1

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