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

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.

Chuck Rifici and Tweed Feud

Recent tweets from Tweed co-founder Chuck Rifici have given the strong impression that he harbours some angst towards Tweed or at least towards some of the people who run it. It remains publicly unknown why he got voted out of the Tweed island but it is likely the source of his negative feelings towards them. Whatever the reason is it must have been something colossal to want to kick out one of the founding members. One would think that you would rather have Rifici on the Tweed team than against.

Now Chuck appears to want revenge with the launch of his new company, Cannabis Wheaton. To form a larger LP than Tweed perhaps seemed daunting so his plan is to gather a bunch of smaller fries. Whether Cannabis Wheaton is a well-thought out idea or just a desperate attempt to make another name for himself in the weed game remains to be seen. He may not be necessarily driven by revenge but you have to think that it’s a big part of his fuel mixture.

Rifici tweeted that he has sold off all of his Tweed shares and referred to it as, “good riddance.” I wouldn’t doubt that his sell off of millions of shares contributed to a recent drop in Tweed’s share price. Any comment he has recently expressed about Tweed have appeared to be jabs. Just days ago he announced the “poaching” of Tweed’s master grower.

If I were Chuck Rifici I would be swimming in the millions of dollars he has gained from shares of Tweed, Aurora Cannabis and Supreme Pharmaceuticals instead of tears and rage but it’s probably not about the money anymore.