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PotNetwork is pleased to present its Marijuana Weekend, published by our partner publication Grizzle. Scott Willis, journalist and director of research at Grizzle, covers the marijuana stock market in depth. He has over 12 years of experience in managing institutional investments in the analysis of debt and equity securities. He has held investment research positions with Credit Suisse and TD Asset Management. He is also a Chartered Financial Analyst and has been introduced to BNN Bloomberg and CBC. To learn more about Scott's writing, check out Grizzle – The Language of New Money.
Final result: The profits of Canopy Growth will lead the sector to new heights or disappointing results will throw cold water on this rally of early 2019. Keep reading to find out …
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Final result: Aurora has become a major player in the leisure market, with approximately 20% of the leisure volume market share in the quarter ending in December.
However, the rapid rise in income and especially the profits expected patiently by investors is likely to take much longer than expected. It now seems likely that investors will have to wait until 2020 to earn a positive profit and EBITDA. Management had initially announced that they would be profitable by the end of 2017.
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Final result: The Special Committee's findings confirm that the brief report of Quintessential Capital Management was nothing more than a charge of Aphria overpaid for its assets in Latin America (LATAM) disguised as investigative report on a network world of fraud.
As argued by Grizzle, and that third parties have confirmed, Aphria (NYSE: APHA, TSE: APH) has paid the prevailing market rate for assets acquired.
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Final result: Some banking analysts are finally realizing that their optimistic estimates must come true. Scotia has reduced Canopy's revenue forecast by 30% in the next quarter and thinks, as we do, that the black market will keep at least 70% of the cannabis market in 2019. Be prepared for a chaotic launch of the all-purpose leisure market. throughout the year.
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Final result: The most interesting part of this story is that hemp with less than 0.3% THC can ripen during storage and transportation and end up with an upper limit to the legal THC limit. This creates serious problems for CBD manufacturers and hemp shippers under the current national ban on products containing more than 0.3% THC.
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Final result: Like Europe, the United Kingdom considers that any product containing a cannabinoid falls under the "new ingredients" regulation. CBD-based foods may not be marketed in the United Kingdom and other parts of Europe for up to three years until they achieve "novel foods" status, which means that they can be sold with little regulation. You will probably find CBD products in stores, regardless of the type of market, because the gray market usually develops until regulations catch up.
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Final result: On January 19, Canada approved the first importation of cannabis from Colombia. The dried flower was used for research purposes only and should only be sold to patients in accordance with Colombian regulations.
The real milestone to look for is when Colombia approves recreational exports and that a company successfully imports this product into Canada. Then we can say that Colombia has become a global competitor of the Canadian record company.
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Weekly performance of marijuana stocks
Marijuana shares outperformed the general market this week, up 3.5% from the S & P 500, up 2.5% and TSX up 1.3%. For the second week in a row, Canadian names outperformed US multi-state operators (MSOs).
Interestingly, so far this year, the top four Canadian record groups have outperformed the overall cannabis index and the US MSO by 11% and 24%, respectively. We believe US MSOs will start outperforming if the state law authorizing the cannabis bank is adopted, possibly in 2019.
Market Outlook
The stocks rallied in the first quarter, after being sold in November and December. The general sentiment is more and more positive vis-à-vis the entire market, so it is difficult to see stocks cross another decline of 20% in the first quarter with no news of negative results or a recession World. The complete takeover of a cannabis business by a consumer product or a pharmaceutical company would be a powerful positive catalyst for the entire industry.
From a fundamental point of view, be careful in holding cannabis stocks in the next two quarters of revenue. Bottlenecks in distribution and a government monopoly do not bode well for the ability of licensed producers to meet or exceed the high estimates of profits. However, until now, the market has shown satisfaction
In the longer term, with the legalization of the Canadian market, we expect a compression of retail and wholesale prices resulting from a legal oversupply by the second half of 2019. Falling cannabis prices will exert producer stocks later in 2019. After easing, the remaining stocks will be better positioned. long term buying opportunities.
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