Canopy Growth & Tesla

Detractors of the Canadian marijuana industry say the stocks in the industry are WAY overvalued, wouldn’t touch them and recommend others not to as well. Yes, from a value perspective it would go against conventional rules to do so. What some of these old guys in suits who have never smoked a joint in their life before don’t realize is that there is a huge marijuana market going on right now. These guys have the same rationale as Warren Buffett with technology stocks. Recently, he admitted that he “blew it.” If a guy like Warren Buffett can blow it then these guys on BNN can as well. They don’t even have the talent that Buffett ┬ápossesses in one fingernail.

If you think Canopy Growth shares are overvalued then you shouldn’t even think about Tesla. Sure, Elon Musk is a wizard but his ambitions are much more speculative than a thriving Canadian marijuana market. Electric cars have not solidified its place yet in society and there are existing giant car makers all over the world who are competing in this industry. Tesla isn’t just a car maker but its other industries also face the same challenges and more. The only real hurdle that I see for Canopy Growth is whether or not legalization happens as planned. It is believed that there will be a shortage of marijuana supply for the recreational and medical markets or if not then just enough. If Canopy Growth can sell to its maximum capacity which will be close to 100 million grams then the share price will leave the single digits forever.

It’s easy to be scared off by these old stiffs bashing Canopy Growth but in my opinion there’s much more promise for delivery of success than there is with Tesla.

Marijuana Legalization & UN Treaties

As far as an average schmuck can tell, the road to marijuana legalization appears to be on its way. Those of us with Canadian pot stocks though might not feel as secure as others. Aside from the legislation not being passed yet there’s still the question of the UN drug treaties that the Canadian government hasn’t addressed.

If Canada does not deal with the legalities of their position with the treaties by July 1st, 2017 then they will not be able to legally legalize marijuana in the eye of international law. It sounds like a big deal but maybe it’s not. Still, investors do not like uncertainty. More importantly I do not like uncertainty.

One of the options and possibly the best option is for Canada to simply withdraw from the treaties. It makes you wonder why they just don’t go ahead and do this. Does the government have more ambitious plans with dealing with the treaty issue? When asked about this issue last week, Trudeau deflected with a politician’s answer leaving everyone to wonder.