Cannabis Industry finds new Growth
Background
Although still illegal at the federal level, more and more states are legalizing the recreational use of Marijuana. There are 15 states that have legalized recreational use (included seven in the most recent election), 15 states that have decriminalized its use (you'll get a misdemeanor), and 26 states that allow some level of home or commercial growing of Cannabis. There is only one state that still considers recreational Marijuana.
The democratic controlled house recent voted to decriminalize marijuana at the federal level, leaving it up to states to set and enforce laws regarding its use. Although the bill still faces challenges to pass thru the senate, it is expected that this action will happen within Biden's first term.
Types of Cannabis Companies
Many companies play more than one role in the Cannabis industry. You can break those roles into:
1) Cultivation - grow and process the cannabis plant.
2) Product Manufacturing - create products using Marijuana or Hemp
3) Agricultural Tech - produce and sell equipment and technology to help grow cannabis
4) Real Estate - Financial companies that lease land to cannabis growers
5) Consumption Devices - produce tools and products for consuming Marijuana products
6) Tech and Media - online services, advertising, sales
Top Performers
These are some of the top performers for 2020 in the Cannabis industry:
GRWG - Agriculture Tech- 842.68%
PW - Real Estate - 245%
TCNNF - Cultivation - 177.03%
IIPR - Real Estate - 148.50%
GTBIF - Manufacturer - 139.59%
CURLF - Finance - 102.12%
CCHWF - Manufacturer - 88.96%
GrowGeneration
GrowGeneration is the largest retailers of hydroponic products in the United States and is engaged in the business of marketing and distributing horticultural, organics, lighting and hydroponics products, including lighting fixtures, nutrients, seeds and growing media systems, trays, fans, filters, humidifiers and dehumidifiers, timers, instruments, water pumps, irrigation supplies and hand tools.
They make products that help grow Cannabis (and other less popular plants).
Fundamentals
* Market Cap - 1.8b
* Last three quarters sales YoY +152%, +123%, +153%
* Last three quarters EPS - -0.06, 0.06, 0.06
* Fund Ownership 41%, Management Ownership 14%
* Listed since December 2019
Technicals
*1320% price increase since March lows
*90% growth since 11/11 Earnings release
*50d MA is 33% below the most recent close, very extended
*Broke into new highs last week
*10d ATR of 7.6% is high
Buy Point
*Buy Point: 39.10
*10d ATR (x2.7) Stop: 31.07 (20.54%)
*Position Size: R4.87 (Small)
This one will be choppy and requires a looser stop. It's better just to keep it in the watch list, waiting for a better entry. If you do jump in, use very small position size and pyramid up as the investment proves its working.
Although still illegal at the federal level, more and more states are legalizing the recreational use of Marijuana. There are 15 states that have legalized recreational use (included seven in the most recent election), 15 states that have decriminalized its use (you'll get a misdemeanor), and 26 states that allow some level of home or commercial growing of Cannabis. There is only one state that still considers recreational Marijuana.
The democratic controlled house recent voted to decriminalize marijuana at the federal level, leaving it up to states to set and enforce laws regarding its use. Although the bill still faces challenges to pass thru the senate, it is expected that this action will happen within Biden's first term.
Types of Cannabis Companies
Many companies play more than one role in the Cannabis industry. You can break those roles into:
1) Cultivation - grow and process the cannabis plant.
2) Product Manufacturing - create products using Marijuana or Hemp
3) Agricultural Tech - produce and sell equipment and technology to help grow cannabis
4) Real Estate - Financial companies that lease land to cannabis growers
5) Consumption Devices - produce tools and products for consuming Marijuana products
6) Tech and Media - online services, advertising, sales
Top Performers
These are some of the top performers for 2020 in the Cannabis industry:
GRWG - Agriculture Tech- 842.68%
PW - Real Estate - 245%
TCNNF - Cultivation - 177.03%
IIPR - Real Estate - 148.50%
GTBIF - Manufacturer - 139.59%
CURLF - Finance - 102.12%
CCHWF - Manufacturer - 88.96%
GrowGeneration
GrowGeneration is the largest retailers of hydroponic products in the United States and is engaged in the business of marketing and distributing horticultural, organics, lighting and hydroponics products, including lighting fixtures, nutrients, seeds and growing media systems, trays, fans, filters, humidifiers and dehumidifiers, timers, instruments, water pumps, irrigation supplies and hand tools.
They make products that help grow Cannabis (and other less popular plants).
Fundamentals
* Market Cap - 1.8b
* Last three quarters sales YoY +152%, +123%, +153%
* Last three quarters EPS - -0.06, 0.06, 0.06
* Fund Ownership 41%, Management Ownership 14%
* Listed since December 2019
Technicals
*1320% price increase since March lows
*90% growth since 11/11 Earnings release
*50d MA is 33% below the most recent close, very extended
*Broke into new highs last week
*10d ATR of 7.6% is high
Buy Point
*Buy Point: 39.10
*10d ATR (x2.7) Stop: 31.07 (20.54%)
*Position Size: R4.87 (Small)
This one will be choppy and requires a looser stop. It's better just to keep it in the watch list, waiting for a better entry. If you do jump in, use very small position size and pyramid up as the investment proves its working.
Disclaimer
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