Disconnected Cannabis Stocks
It’s the best of times and the worst of times for cannabis.
Michigan cannabis shops opened for business over the weekend, the three now-legal dispensaries generating more than $221,000 in sales on day one.
Lines wrapped around stores as consumers piled in to buy.
The Detroit Free Press reports:
At Exclusive Brands, where more than 900 customers bought products, more than 200 people waiting in line were turned away when the store had to close at 9 p.m.
This week, Wayland Group, a publicly traded Canadian cannabis grower, announced that it’s filing for bankruptcy protection. A few days ago, the firm had unsuccessfully tried to restructure its debt.
On the one hand, the cannabis industry is undergoing massive growth. Pot is becoming legal in new jurisdictions, drug developers are making breakthroughs and we’re inching toward federal legalization.
On the other hand, we’re entering the first wave of pot-related company failures.
Both are good for us.
Fact is, there will be winners and there will be losers in the cannabis business.
I’ve been saying that for quite a while now.
Some cannabis stocks are going to absolutely explode higher in the months to come — and others will probably go to zero.
I really believe there’s a disconnect between what’s happening in the markets and what folks are seeing in their businesses.
During a new dispensary opening in Florida in October 2019, Trulieve CEO Kim Rivers had to offer to FaceTime with a “depressed” banker to get him to believe that a crowd of 100 people were lined up waiting for the store to open its doors.
That’s how much the market’s recent action has twisted investors’ perceptions about pot stocks.
And there’s a world of difference between the innovators in the legal cannabis market and the also-rans trying to ride last year’s hype of publicly traded pot.
But it’s not always easy to tell the two apart — especially for investors who don’t follow the industry closely.
The good news is we’re seeing those two groups of pot stocks start to separate.
Wayland’s bankruptcy may be the first step toward that.
For us, with a portfolio jam-packed with names most likely to wind up winners, that means big gains are on deck.
Stay tuned — things are set to get exciting.
Meanwhile, I’m getting ready to hit the road. Next week, your update will come from Las Vegas, where the whole cannabis industry will descend on MJBizCon, the biggest pot trade show in the world.
I’ll be talking with some of the companies in the portfolio and scoping out some new potential plays.
More details to come.
For Technology Profits Daily,
Chief Technology Expert, Technology Profits Daily