While we wait for more action on the cannabis market, we can look at indicators around pot stocks and what’s happening with these types of equities.
One thing you see is that, while top offerings like Canopy and Tilray are above their prices of a year ago, both are significantly down over 6 months after spiking higher in the days before the Canadian government greenlighted recreational use.
CGC’s CEO swears that the market will pick up with product demand – but in the meantime, we can also see that there are “alternative” marijuana stocks that are already climbing a bit higher on the exchange.
There’s the Canadian Cronos Group (ticker: CRON) that seems to be coming off of a bad bounce down near $6.50 around Halloween – and is now trading at over $8.
There’s also Intec Pharma (NTEC) a company that develops cannabinoid-based drugs for conditions such as low back pain and fibromyalgia. NTEC is sustaining a 6-month high near $6 per share.
Other product-related cannabis stocks like GWPH aren’t doing as well – the British company offers marijuana products for pain control, autism, and more, with clinical work currently underway. The stock, meanwhile, is lying down at a 6-month low.
The general idea here is that individual cannabis stocks fare differently related to their specific products, and that it will take time for many of these equities to “mature.” Yes, we now have dispensaries on both sides of the Canadian border, and yes, the long term signs point to U.S. legalization, but that doesn’t make cannabis products magically move through their delivery pipelines. We have to be patient about the potential for most marijuana stocks and take the long term approach.
Particularly, in the case of CGC, some analysts believe that this stock is NOT down for the count.
“This isn’t the end of pot stocks,” wrote Luke Lango at InvestorPlace just before Halloween. “Instead, it is just a temporary pause in a long-term secular growth narrative. Once this pause is over, it will be time to buy the best pot stocks. When it comes to the best pot stocks, there is one clear winner: CGC stock.”
Then there are others who urge delays on investing, some even contending that the best pot stocks don’t even exist yet!
“The landscape will be full of landmines for the next few years; it may be the 2020s before the cannabis industry can really go mainstream,” wrote USNews reporter John Divine this past summer, looking at a realistic timeline for U.S. legalization. That was before Sessions got thrown out with his hat from DOJ, but still…
Keep watching cannabis stocks both large and small to spot a chance at establishing a core position, and think for yourself about when is the right time to pull the trigger.
