Canopy Growth & Constellation Brands Deal

The short story: big American alcohol distributor buys 9.9% of Canada’s largest marijuana producer. What might this mean? — people who sold their Canopy Growth shares might be crying tonight as tomorrow is the beginning of the trading week. Whether shares of WEED.T will spike is unknown but I think people are expecting it to. Cannabis stocks have risen over much less.

I can easily imagine cannabis infused drinks in mainstream culture. It may not replace alcohol but it will have its place. The fruits of this deal though will not come to light at least until edibles are legalized in July 2019. This deal is another green door that has opened for future major ventures, I believe.

During the humdrum periods of cannabis stocks we all get the itch to sell our shares. I never had the stones to sell them all because news like this just comes out of nowhere. CGC CGC CGC

https://www.newcannabisventures.com/fortune-500-constellation-brands-takes-191-million-stake-in-cannabis-industry/

Cannabis Portfolio Update. Maricann…BOO

Well, my Maricann endeavour hasn’t gone so well. After an announcement of a not-so-great financing deal and a delayed damaged greenhouse incident the stock took a HUGE dive. The lesson?

Even though Maricann would appear to be the best medium size LP it lacks popularity, uniqueness and cash. This industry already carries a high risk and the lower you go on the LP chain the more risk you add on. Anything can happen to a new company in a new industry. I’m sticking to the big 4 when it comes to trading and only at lower than average prices. Trading often gets me nowhere with effort. It often ends up being that I would have been better off doing nothing. Patience is the key. Don’t let the FOMO get the better of you.

Things are looking up in the cannabis sector. The good news just keeps rolling out. Any news that strengthens the road to legalization is a plus. The rumour is that Alberta and another province will be announcing their cannabis regulations this fall. I get the feeling that Canopy Growth and Aurora are going to have a positive earnings report this fall because of oil sales. I added a few hundred shares of Canopy at $8.40 recently and lucky that I did. Sometimes you get lucky and the stock starts to soar the day you buy it. With the stock price being $10 a share I should be dancing in my underwear after the pummeling it took in the spring and summer.

CGC, CGC, CGC, we will we will rock you!

 

 

Making All the Green Choices

In my last post I told you about some of my recent trades in the Canadian marijuana sector. Phewww….thank god that I made those moves..for now anyway.

I sold 2800 shares of Aurora Cannabis at $2.72 about 2 weeks ago and the price has dropped to $2.39.

2000 shares of OGI were traded for 2000 shares of Maricann. Organigram dropped almost .30 cents from where I sold it. Maricann went up 7%.

Supreme Pharmaceuticals got sold at $1.30. That same day I sold, it dropped 5%. As we speak today it’s dropped even further to $1.16.

The Midas touch! All of this means I have CASH! Not too long ago I was making all the wrong moves.

If Organigram or Aurora drop another 5-10% then I’ll probably pick some shares up. I’m okay with buying Aphria and Aurora when their market cap is in the 600 million range not the 900.

No trading in Canada tomorrow as it’s a holiday. Man, I used to hate Monday to Friday, now I look forward to it. Life is good.

Rebalancing Marijuana Portfolio

Since getting into the Canadian cannabis sector in late 2015 I’ve been mostly a buy and hold kind of guy. Having seen the different opportunities that have passed me by though I’ve realized I should have taken a more active approach.

When the spread of certain stocks are momentarily smaller than usual I should have taken advantage by selling one of them and then buying the other. For example, if Organigram is usually half the price of Aphria, I should sell Organigram when it’s significantly more than half of Aphria and then buy Aphria.

Some moves I made recently:

Sold 2000 shares of Aurora at $2.17 to buy 2000 shares of Organigram at $2.20. The price was 3 cents different and Organigram is usually 10% higher than Aurora.

Verdict so far: Bad move. Aurora jerked up leaving Organigram behind. A handful of good news for Aurora lately and no news for Organigram as usual. I also didn’t want so much exposure to Aurora since they were about 40% of my portfolio.

Sold 2800 shares of Aurora at $2.72 because it’s on the high end of their typical share price. I had to ask myself if it was going to go to $3 soon. I’m betting probably not. It’s gone up about 25% in the couple weeks. Who knows though, right?

Sold 2000 shares of Organigram at $2.52 and bought 2500 shares of Maricann at $1.62. I’m not a big fan of Organigram. Doesn’t seem like they are ever doing anything except screwing themselves up. I see them aiming to be a solid medium player. Besides, Canopy Growth just announced they are building a facility in the same town. Maricann appears to have good value at this price and have plans to expand into Germany. Their revenue is also much higher than Organigram’s.

Sold my side piece of Supreme today for $1.30. Made a couple hundred dollars. I don’t want to have money invested in a company that hasn’t sold more marijuana than I have. Their market cap is way too high for a company that has no revenue. At this point I’d rather have the cash.

Today was great until it wasn’t. All LP stocks ran up but crashed harder towards the end of the day. Last day of the trading week tomorrow. We’ll see how it goes. I want some euphoria going into the weekend!

Marijuana Stocks Today

Aphria

It was earnings day today for Aphria and the results are better than expected with positive news for the future. On the downside their sales are still suffering from the cut back of the veteran’s medical program and their very questionable investment moves. The share price has gone up about 10% today. I feel that I need to increase my portfolio weighting with some more Aphria shares since it is my smallest core holding. Unless if their strictly greenhouse model under-performs then I’m confident Aphria will continue to be a leader in the marijuana space.

Aurora Cannabis

Aurora’s been making big moves or at least many moves recently. Today they announced some apparently good news regarding progress towards a possible German production facility. They’ve also announced the conditional uplisting to the TSX which hasn’t meant anything in the past in terms of share price going up for other LPs. Still, it’s good news. Aurora’s going for gold and has become one of the big players. A lot of their success is banking on their Aurora Sky project which appears to be progressing nicely but that’s just what they tell us. I could show you a picture of me and two beautiful women but it doesn’t mean they let me apply sunblock on their backs.

Canopy Growth

There once was a time not too long ago that this stock was double of Aphria. More often now they are only about a third higher. I believe much of that has to do with the psychological aspect of Canopy’s share price. When I tell people I recently bought Google, Facebook or Dollarama they comment on how expensive it is. There’s a a reason why companies do stock splits and why people feel confident buying penny stocks…cheaper share price. Canopy is doing great things but people also don’t like the big losses. At this point of the game, Aphria is providing better security for the minds of investors with its low product costs and smaller losses. Bruce Linton recently stated that he’s not looking to win the warm up. I like his rationale and his analogies. Canopy has recently released their own spray of good news but I guess not good enough.

Organigram

Many analysts seem to favour this one but they don’t seem to be doing much. My guess is that people like their valuation compared to others. I can’t remember the last time they have had any good news. Last week I traded some Aurora shares for Organigram and I guess so far it’s been a mistake. Aurora has jumped from their recent good news while Organigram has fallen. Worst of both worlds. Some times you lose some and then lose some more. I chose to own a little more Organigram because of analyst sentiments and the risk profile of them vs Aurora. I traded the shares when they were both at very similar prices because my other rationale is that most of the time Organigram trades at a higher price than Aurora.

Like always, we’ll see what happens.

Canopy Growth’s “Disappointing” Q4, Fiscal 2017 Earnings

Disappointment is often relative to what the expectations are and sometimes expectations are too optimistic for no great reason. Analysts were hoping for a few million dollars more in revenue and probably lower losses. Apparently a 191% increase in yearly revenue wasn’t impressive enough.

Canopy Growth is in extreme growth phase which means there’s going to be a lot of money spent. If you’re in the Canadian marijuana industry the time to make moves is now while everyone else is way behind you. While the medical marijuana industry is significant it’s all about the recreational side of the industry. Once it goes legal it’s going to be going from zero to sixty. Any earnings made now are not a great indication of success for the future.

Next quarter should be much more impressive given that they have their oil extraction machine in operation now, new line of gel capsules and the Mettrum facilities in order. This Bruce Linton guy appears to be the visionary of the industry. I like what he’s doing.

Post-Nov 16th Blues

Nov 16th, 2016 might have been just another day for you unless if you had money in cannabis stocks. All stocks went parabolic only to crash in the last hour of the trading day. I was up around $200,000 at the peak when I was sleeping. When I awoke I was up around $170,000. By the end of the day I was up only $130,000. “Boo hoo,” right? Still, money is money regardless of how much you start with. Sure, negative $70,000 would have been much worse but it still hurts.

Since then I’ve been thinking about that roller coaster of a day probably every day. I suppose I should have sold everything but the mindset that had you stay in the game for that long is also the mindset prevents you from selling.

My game plan was to hold these stocks long-term. The flaw in that strategy is that these stocks are short-term stocks for many. It doesn’t matter what I believe it’s what everyone else is doing that matters and everyone else is looking for a quick profit.

The hold strategy did me well in the beginning. While I got caught holding much of the bag, there were many who sold way too early. If you sold Canopy Growth anywhere from $3 to $6 you would have missed out big time and not have had a chance to buy back at a lower price.

Some thoughts since then…

Lesson #1: Be able to change gears. When Canopy hit $15 and change I should have thought that the price was way too high in this stage of the game.

If I sold, the worst case scenario would be that I would be up $170,000. How much higher could those stock prices go from there anyway? Would it not ever come back down? Hindsight is 20/20 though. If the prices did continue to go up then I would have said, “I knew it!”

I’ve learned it’s all about what happens after the fact that decides your perspective. When the stocks were on their 3 month run, all I thought was “I knew I should have bought more!”

I did sell some Canopy at $12.40 and also a couple side positions. That was part of my reason for not selling more on Nov 16th. I didn’t want to give away any more shares of my beloved Canopy. Don’t get emotionally attached to a stock, I know. I’m not sure if I’m emotionally attached or if I just believe in them a lot. It’s not the same.

If I was somewhat rich already I probably wouldn’t care too much about the wild swings but I’m just a poor boy and nobody loves me. My life is sort of riding on these stocks. Sounds sad, eh? We all got to have a dream.