Cannabis Earnings — Here’s What To Expect
We all saw what happened Monday and then again Wednesday in the markets.
The selling was relentless. In less than a week, the major averages coughed up their summer gains, landing at prices we haven’t seen since early June.
Today we’re seeing more sideways action as stocks try to make up for some of yesterday’s losses with small gains today.
But amongst the madness a rally could be taking shape in a sector almost completely insulated from trade war drama.
And while pot stocks are not disconnected from the greater markets completely…
We are starting to see some divergence this week as earnings roll in and folks slowly start to realize pot stocks offer a safe haven from stocks subject to heavy swings every time Trump tweets.
And it could spark a major green rally very soon.
M&As, Earnings & Capital Raises
There are a lot of cannabis companies out there today. A lot more than there were a few years ago.
And CEOs across the cannabis landscape are realizing that diverse revenue streams fueled by having multiple positions in the cannabis supply chains are crucial to surviving as the market slowly matures and consolidates.
That’s why we are seeing a massive uptick this year in capital raises and merger activity.
Additionally, capital fund raises are also soaring.
We’re also smack dab in the middle of earnings season, which I expect could be the spark to light the fuse on our rally.
Next week some of the biggest names are reporting. This includes:
- Greenlane Holdings (NASDAQ: GNLN): Aug. 12
- Tilray (NASDAQ: TLRY): Aug. 13
- Acreage Holdings (OTCBB: ACRGF): Aug. 14
- Canopy Growth (NYSE: CGC): Aug. 15.
If we can muster up strong earnings reports, we have a fundamentally strong foundation for a huge surge in pot stocks.
And About Those Protective Moats Pot Has…
It’s near impossible for the trade war to affect these companies, because unlike large multinationals, they are often limited to small jurisdictions like states and provinces.
And as if the sector were waiting for us to give it the green light, many of our favorite pot companies were starting to rip higher as of Tuesday.
Take for instance the ETFMG Alternative Harvest ETF (MJ). This ETF holds all the big names in pot from Aurora Cannabis to Tilray. And using this ETF’s chart, we can see pot stocks are pulling away from the major averages in a big way this week:
Previously in these pages we’ve predicted pot stocks were hitting bottom through Q2.
It’s still too early to call the current action a rally, but if we can sustain positive momentum through the week, we’re confident the pot sector will surge to its 2019 highs again.
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Chief Technology Expert, Technology Profits Daily