Just when you thought you would never have another opportunity to invest in a new sector that provides growth like the dotcom, cellular, or crypto market, enter the “Age of Cannabis”.
As an investor and trader I am always looking for Alpha. It does not matter the sector or space, where there is potential for profits I am in. Over the past week we have started our research and are putting together the S.C. Cannabis Portfolio. Click on the hyper link to view.
We will look to build a portfolio around a variety of pure and side plays. From growers to companies that will increase organic growth through new products. The goal is to build a solid portfolio of potential winners for the long term.
Keep in mind that as the industry gains acceptance more and more farmers will grow. That is right, do not think that growers have some edge over traditional farmers?
Politicians are always sensitive to farmers, and a multi generational farmer that is getting $9 a bushel for soy beans, is going to be quickly attracted to $9/gram for Cannabis. In the future we are as likely to see 500 acre cannabis farms as we saw the explosion of alt coins last year. Do NOT kid yourself.
Cannabis is a commodity and like cryptos can be grown by anyone with the knowledge and whereabouts to do so. The key in investing here is to not get greedy and take your money off the table when you can.
Thinking that indoor grow facilities are the only way to grow, will have you holding the bag like those currently holding crap coins like Tron and Verge. Eventually it will be like corn, soybeans or any other commodity that can be grown. If there is a market it will be bought by the bushel.
With that said there will be some successful companies and one company we are looking at is The Green Organic Dutchman. (TGOD) (TGODF) Many of these stocks are traded outside the US so you will have to verify if your broker offers them.
After more than doubling from their IPO it appears that we have started a broader impulse wave. Initial support is in the 6.35 area with the area we are looking to add between 5.35 and 5.85.
Unfortunately there are no options for this instrument so we are looking to buy the stock outright. Initially we have target prices of 8.15 and 10.0. All of our personal trades will be posted for our premium expert swing members, but this is a guide for our decision making.
The China Hustle:
Few of the pure plays we looked at were trading at prices inline with their growth. Since most of these are new companies there are few quarterly reports to go buy. Like many IPO’s they are subject to fudge accounting practices.
One company that we noticed had more flags than a Steelers game was Green Thumb Industries. This was a reverse takeover from Baywaters Uranium Corp. We mention this because like the crap coins there will be many crap chronics so buyers beware. Do not be mislead by shallow “buy now” articles do your homework.
Aurora Cannabis recently acquired a 17% stake in TGODF. They are one of a handful of certified organic growers and TGODF is the largest. The majority of medical consumers prefer organic and are willing to pay a 30% premium. In addition they are Leed certified with sustainable water and energy facilities.
When we lack quarterly reports or enough of them to assess a company, it does not imply we can not invest. There are more than financials that matter. With The Green Organic Dutchman what stood out to me was the team.
The company is lead by CEO Brian Athaide a former CFO and IT for Proctor & Gamble and Andrew Peller Limited. Andrew Peller is a large wine and craft alcohol producer in Canada.
Casaba Reider (President) – Former CEO of SunPac Foods and Xyience.
Julia Golubovskaya (Interim CFO) – Former Proctor & Gamble consumer products
Marc Cernovitch (VP) – CEO & President at Oro Ventures, former CEO and President of Halo Resources
Prem Virmani – (Chair of beverage science and research division) Current Vice President at Cott Beverage Corp. In addition he lead beverage development for Sam’s Choice (Walmart) and numerous other private label beverages from Publix to Safeway.
Anna Stewart – (General Counsel) – Former Assistant General Counsel Teva Pharmaceuticals
Andrew Pollock – (VP Marketing) – Formerly of Weight Watchers Canada with experience in subscription and the consumer package business
Mike Gibbons – (VP of Sales) – Over 25 years in consumer packaged food and beverage industry with branding, distribution and product development.
Jeffrey Scott – (Chairman of the Board) Mr. Scott has severed as Chair, board member and founder for a variety of energy companies from Postell Energy, Gran Tierra Energy to Empire Oil Refineries.
Andy Corcoran – (Regional Sales Manager) – Formerly helped established Southern Glazer’s Wine and Spirits business in Canada
I have yet to find a Cannabis stock that has not only a more experienced team, but a diverse. Key connections are with Proctor & Gamble, Food, Beverage and Pharmaceutical industries. Yesterday they announced Tim Seymour as an addition to the board. The team is experienced in not only running companies but growing them as well. Goes back to the old saying “its not what you know its who you know”. This company has a foot in the door to everything from hygiene, food and beverage, to the pharmaceutical and the knowledge to package and distribute.
There are numerous cannabis companies out there that have the potential for growth and investing. Throwing money at companies like Tilray are simply throwing your money in a fountain and hoping your dream comes true. This is just an overview of one company that we will dig deeper into, but smart investing starts with homework.
The stocks shown in our portfolio are the companies that make the preliminary cut during our initial research. We will further add and omit companies as we dig deeper into the fundamentals and potential for growth.
Investing in cannabis stocks is highly risky and should only be done with money you are willing and able to lose entirely.