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.

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.

MedReleaf: Two Days After the IPO

“Damn it, I knew I should have bought it.” At the $7 range it was said to be a “screaming buy” by marijuana stocks researcher, Alan Brochstein. Unfortunately for some, the recent doom and gloom of the industry may have stopped them from picking this one up. In terms of revenue MedReleaf(LEAF) is an equal rival to Canopy Growth.

MedReleaf is now hovering in the low $9 range meaning us chumps missed out on about a 20% gain. Been there done that but it never feels good. The way I see it is that at $7.50 even if it went lower the price would eventually get back to $7.50. In the weed space, MedReleaf is a solid company being one of the early LPs providing medical marijuana since 2014. The experience, quality of products and attractive valuation should have made it almost a no-brainer. But when the rest of the space are at their recent depressing lows it’s hard to pull the trigger. In this type of environment many can’t help but think, “maybe it will go lower.”

 

Recent Lows in Canadian LP Share Prices

An unwritten agreement that you made with yourself when you signed up to be in this industry was that volatility would punch you in the gut at times. I’m not too bothered with Canopy Growth being in the $8 range but any lower would bug me. It shouldn’t bug me given that I’d still be up but giving up all those gains is a stinger.

To put it back in perspective when I started this journey of investing in marijuana stocks I told myself that I was in it for the long run. I didn’t even expect Canopy Growth to be at $8 at this time. If these stocks just arrived to where they are now I would be insanely happy. It just goes to show that emotions are a victim of the current trajectory and not the destination. Damn you feelings.

The bright side is that legislation has been announced furthering the possibility of legalization. The bad side is that the number of publicly traded LPs has increased which dilutes the industry. I think I’m more worried about potential regret than I am of this sector not working out.