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Marijuana stocks weekend investor roundup: Analysis of the week's most important events in the cannabis industry (September 1)

By Scott Willis
Sep 02, 2018
PotNetwork is pleased to bring you our Marijuana Stock Weekend from our partner publication Grizzle. Grizzle journalist and Head of Research Scott Willis covers the marijuana stock market in-depth, with over 12 years of institutional investment management experience in analyzing both debt and equity securities. He has held senior investment research roles at Credit Suisse and TD Asset Management. He’s also a Chartered Financial Analyst and has been featured on BNN Bloomberg and CBC. For more of Scott’s writing check out Grizzle - the language of new money.

Citron Research sours on Cronos Group

In our view, Andrew Left from Citron knows how to make a flashy entrance into the market, but though he is always yelling about smoke he never actually finds a fire (Shopify is a case in point).

All Citron did is give cannabis investors a cheaper entry point leading up to legalization day.

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[Read More: Tilray: A budding stock, or an overvalued burn-out?]

BuzzFeed details a secret government committee focused on fighting legalization

The Marijuana Policy Coordination Committee is set up to spread negative information about cannabis and to identify problems with state-level legalization.

This news demonstrates that legalization will have to come from grassroots voters, not from a change in government ideology.

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Colorado charges $100 per week to test one strain

The Colorado Government is charging growers $100 a week for six weeks then $100 every month after that to test each strain they're cultivating. On a yearly basis, these costs add up to $1,750 per strain.

It will be interesting to see how high testing costs in Canada will be. Costs that are too high could stifle demand for micro growing licenses.

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[Read More: Mixed marijuana stock strains: Diversify your portfolio with these five Cannabis ETFs]

Study finds possible link between cannabis and schizophrenia

Looking at 180,000 people the study found that cannabis users are more likely to have schizophrenia and vice versa. The study did not prove that cannabis use makes one more likely to developing schizophrenia, only that there is a causal relationship.

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Israel moves into Europe, challenging Canada for dominance

After the Israeli government effectively shut down cannabis exports for the foreseeable future, we are not surprised local growers are building greenhouses outside the country.

Israel will be Canada's fiercest competitor in Europe and can stand toe to toe when it comes to medical research, growing expertise, and understanding the varied effects of the cannabis plant.

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Read More: These are five dividend-paying marijuana stocks for more predictable portfolio returns]

Nevada sells $425 million of cannabis in first year

Per capita sales in Nevada were $142 per person, compared to $128, $70 and $36 for Colorado, Oregon, and Washington in the first year of legalization.

Nevada made sure to keep taxes low and benefited from being a tourist hub. Other states should use Nevada as a model of how to regulate marijuana successfully.

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City in B.C. charging $5k a year for cannabis license

Kamloops Town Council voted to charge cannabis retail license holders $5,000 a year, compared to only $200 a year for beer and wine license holders.

The freedom cities and town have to set their own cannabis rules, and licensing fees will be one of the hurdles licensed producers and retailers will have to navigate in the early days of legalization.

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Marijuana stock performance for the week

Global marijuana stocks moderated their gains this week up 3 percent and are now up 33 percent in the last three weeks. Canadian stocks were up 8 percent as a whole with large-cap stocks under-performing small caps by 4 percent, a rare occurrence.

There is a significant M&A premium built into most of the large-cap stocks as investors expect large corporations to enter the market through licensed producer buyouts. If these deals don't occur soon, stocks could retrace recent highs.

Market Outlook

Stocks are now back above the yearly low they reached on April 9. The Canopy Constellation deal gave the market some new momentum which could potentially carry stocks higher into the October 17 legalization date.

Once the market opens, we expect retail and wholesale price compression from a legal oversupply. Falling cannabis prices will pressure producer stocks in 2019.


Source: New Cannabis Ventures

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READ LEGALIZATION IS INEVITABLE IN AMERICA  FOR AN IN-DEPTH REPORT ON WHY FEDERAL LEGALIZATION COULD BE A REALITY IN LESS THAN THREE YEARS

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