Cannabis Stock Portfolio – The Green Organic Dutchman

Overview:

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.

Reality Check:

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.

TGODF Weekly:

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.

TGODF Fundamentals:

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 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.

Summary:

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.

23 Responses
  1. jlhequities

    Hey Boss-
    Thanks for Looking into these opportunities. Great info on this new sector. 1 other question I have is being a newer trader, do you guys recommend any prop trading groups? Ones that offer some accountability and over sight to the trades a new trader makes? This is much needed help. You guys are excellent but I could use a little more in-depth help on sticking to a trading plan and executing it. I have found that when I’m the boss I just change the rules as I go. Need help from platforms and oversight into decision making. Just wondering

    1. Andrew Gonci

      Hi JL – As you know we are very rule bound in both trading and investing. One of the challenges with cryptos right now is we are trading counter trend, to the mid term trend. You bring up some good points, and I believe I posted some rules for trading, but I will make it a point to get an article this weekend in forming a plan and strategy as well as taking the emotions out of trades. Appreciate your comments as always.

    2. Andrew Gonci

      One challenge for traders is they tend to overtrade. This is probably the most difficult emotion to control. The other is watching a minute by minute play of the trade, which triggers the emotions that lead to over trading and subsequent losses long term. then when the market is right for trading, they are trading out of a hole. Capital preservation should always be a traders first thought when entering a trade. “Is this really a good setup or am I just wanting to be in the game?”.

  2. Kevin Meiner

    Great post! I like the comparison to crypto but I have to ask what makes Verge and Tron specifically, crap coins? I only ask because I’ve seen lots of people on social media say that XRP and XLM are crap. I’ve seen people write about that shit coin called Lite coin and Ethereum Classic. Some people even call bitcoin shit because it’s so wasteful to mine. Mostly these posts are fueled by politics and opinions and are not data driven but I wonder, what’s drives your statement? Honestly, I’m curious because I follow seeking cryptos and I respect your analysis.

    1. Andrew Gonci

      Great Question Kevin and appreciate the comments!

      XRP & XLM are more utility tokens so to consider them crap when Walmart IBM JP Morgan and other large companies are using the platforms is a reach. But what is their potential investment value? Not as clear.

      Litecoin is a little different then ETC in my opinion. Litecoin is more of a fiat currency type coin. Which fiat currencies gain mass adoption only the future beholds. Dash BCH and XMR are in the same space. There is room for more than one.

    2. Andrew Gonci

      Verge and Tron really bring nothing new to the game. What can they do that Litecoin BCH or XLM can’t do? Not that they do not make it, they may be successful. But first market movers have an advantage. In my opinion, there will likely be a handful of coins that make it for long term. Is Tron and Verge in that category? They may rally when the cryptos are in favor but long term I just do not see a market for them.

      1. Kevin Meiner

        Thank you for the response. You make some great points. Personally, I’m always reminded of my college years when mp3’s were being download on Napster and Bearshare and everyone was on MySpace. Those in first paved the way for where we are today. I guess for me, I try to just stay open minded and I diversify. I’ve never been good at trading but I missed many once in a lifetime investment opportunities by being close minded. And just because a business doesn’t bring anything new to the table, doesn’t mean that they don’t do it better.

  3. amussic@gmail.com

    Is this a normal stock or otc? I tryed to make an order but I couldnt stating it is otc so I dont really know whats the case.

    And for the stock that you are looking into, can you tell me or write an article about how you find the stocks that are worth looking into. You probably search them on Finviz, whats your Filters.

    Thanks

    1. Andrew Gonci

      It is an OTC in the US. It is listed on the Toronto Exchange (TSX). TD Ameritrade offers them over the counter not sure if Interactive brokers does. TD Ameritrade (Toronto Dominion) is a Canadian bank so they offer it.

  4. jlhequities

    You guys should do a prop trading membership, have a capital contribution and demo trade account and once a trader proves he is profitable, then put up capital with theirs and take a cut of the profits like the rest of the groups do. You guys have the educational piece perfected, do some more in-depth help and make even more money.

    1. Andrew Gonci

      Appreciate the comment JL. It is an interesting area, however, we are more interested in educational, swing, position and investing. Prop shops do not really provide education they generally make money off commissions, your profits and teaching general trading practices. If a trader is really good he is not selling his secrets like “Trade with Chuck” ;). There is a reason Paul Tudor Jones does not have a book or a Prop Shop. It is also very time intensive. One issue with these memberships is they force a lot of trades just to show they are trading.

  5. Kcollins5311

    Hi Andrew,
    I see that the stock is trading today at $4.81 which is obviously below the $5.35 and $5.85 “areas to add” that you mentioned above. I’m just curious if you did add, and if not, what was the strategy behind waiting? I have been following you guys religiously and I suspect the answer is you are waiting for the right signal…if so, any thoughts what that signal may be? Thanks!

  6. Kcollins5311

    p.s. I am looking at the price on Yahoo Finance, so I’m looking at this in $USD and the prices above are Canadian denomination? Apologies for any confusion.

    1. Andrew Gonci

      Hi collins, yes it is TGODF for USD. Nothing wrong with adding a little on a pullback. This is why we slowly step into positions not all in on hype. I would like to see some support but tomorrow it could be 6.50 😉

  7. JW911T

    Hi Andrew – I am going to follow your lead and build a portfolio. There is a lot of research online and what strikes me is the general consensus about the market potential. For example ‘Canada and California are poised to capture 41% of the world market by 2022″, source; https://tinyurl.com/y8llwa9m

    I am eagerly looking forward to your next installment. Canopy Growth seems another potential stock to invest in (https://tinyurl.com/yarcv98q). They seem to invest significantly in R&D, filled a fair amount of patents plus they seem to have the bandwidth to grow. Interested in your views here of course. Kind regards, JW

    1. Andrew Gonci

      Hi JW,

      I think that eventually, sooner then later, the US starts to decriminalize it, or at least leaves it up to the states. We saw this with the Supreme Court’s decision on gambling. We could see a similar decision here.

      With that said, these companies are difficult to value so it is based on growth and sentiment only. Our goal is in these types of markets, like cryptos, to get our initial capital out as quickly as possible. I like CGC for sure, and it is on our list. A side off of CGC is STZ (constellation brands)

      Thank you for your comment!

  8. JW911T

    There is some behavioral research done on consumer sentiment by Deloitte (https://www2.deloitte.com/content/dam/Deloitte/ca/Documents/consulting/ca-cannabis-2018-report-en.PDF) which exposes some interesting angles such as whether Cannabis will be a complement or a substitute for liquor. Personally I am not sure it will replace my single malt 🙂 but this consumer behavior study is another piece of the puzzle worth taking into consideration. This also leads us to researching whether retail outlets should be part of the portfolio.

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