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.
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.
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.
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.
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.
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.