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The Great Green North

With Canada legalizing, what stocks are set to benefit?

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you’re probably a little late my friend.

I’ve been in MEDFF, continuing to hold. They are currently profitable and are the biggest player in the oil market, which is where the margins are. Oil is also healthier and I believe will lead to more widespread adoption outside of the stoner crowd.

you basically need to come from a target school pedigree/work at prestigious firm in the US/have a really good connection.

- AF hivemind

im in TGOD which is set for IPO Q1 2018.. we’ll see where that goes i guess.

'A flute with no holes, is not a flute. And a donut with no hole, is a danish'

Nice jump in these stocks since 12/7:

WEED: $18->$28…55%

MEDFF: $12->$13.50…12.5%

ACBFF: $5->$6.30…26%

New ETF (MJX) launched, which could be interesting for technicals. I’ll be keeping an eye on it.

Franky, this goes to show you should not listen to naysayers unless they have some rationale besides a need to feed their ego through condescension.

you basically need to come from a target school pedigree/work at prestigious firm in the US/have a really good connection.

- AF hivemind

the naysayers are not extreme momentum players like you clearly must be. there is no remnant of value here. just pure speculative frenzy.

you do understand that the market value of PUBLIC Canadian marijuana stocks is at CAD$21 billion today (and the private market is likely valued at several billion more), that the market size is merely ~CAD$6 billion and at least 1/4 of that will be taxed away while another 1/2 will go to the retailer, if LCBO pricing structure is appropriate, which it likely is (see the LCBO pricing structure link below). this assumes the low initial taxes stick. i predict they’ll rise substantially over time as the average canadian comes to terms with the negative effects associated with weed. the average person still thinks its harmless.

so you have likely ~$25-$30 billion in total market cap chasing $1.5 billion in wholesale revenues and maybe $0.5 billion in profits. BUT they need to spend billions to make that half billion in profits so if current market prices stick, their market caps will likely go up another 30-50%. so $32-$45 billion chasing $0.5 billion in annual profits many years in the future. AND this assumes the legal market crushes the black market down to nothing and that nobody grows their own despite home grow ops being legalized as well.  

http://hellolcbo.com/ci/fattach/get/99870/0/session/L2F2LzEvdGltZS8xNTE0NDc1MTUzL3NpZC9Xb2xCZmxCbg==/filename/Pricing+Examples+November+2017.pdf

good day to buy Jan $25 puts on WEED for $0.90. let’s see where WEED is in 2 weeks. i bet materially lower than $25.

YUM & DPZ

I play momentum or value when appropriate. It is good to be flexible and to recognize what approach makes sense or doesn’t make sense for a given stock and/or market environment.

You cited many figures; some are fact and some are conjecture. I will simply say that valuing a soon to be legal market based on an existing quasi black market is flawed for many reasons. The principal reason is that finding a dealer and participating in an illegal transaction creates much more market friction than going online or walking into a store and ordering the same product. I am not certain how you arrived at the numbers you cite, but this logic appears to be present in other sources many articles reference.

Unfortunately, I have never owned WEED. I have owned MEDFF for some time, as I view less risk in the medical market and higher margins with oils. I also have more faith in the projections around the medical market due superior underlying data and known delivery networks.

The fact is, had Franky invested in one of these stocks at the time of his initial post he would have experienced strong returns. Why do you believe January is a good time for puts? Investors taking gains for 2018?

you basically need to come from a target school pedigree/work at prestigious firm in the US/have a really good connection.

- AF hivemind

timing is mostly due to technical factors running out of steam. and the fact that everyone at christmas dinner wanted to know my opinion on weed stocks and bitcoin and then weed stocks and bitcoin went up ~30% in the two days after christmas. haha.

the bottom line is that the valuations in no way can support the potential profits available in the system given the amount of capex required to serve the market. the canadian producers are pricing in complete domination of the global weed markets and assumes legalization continues in most places. the problem with this is that most countries will likely favour local ownership and local product and weed is unlikely to have the same brand value as beer or spirits making it difficult for foreign companies to compete internationally.  

and i think it is insane to think that the future legal marijuana will be much larger than $6 billion given the alcohol market is only $22 billion and a lot of that $22 billion was spent at restaurants at inflated prices. not really much opportunity to sell weed at inflated prices. i think $6 billion is aggressive considering personal grow ops will be legal.

it’s not like i’m a permanent naysayer. we dabbled in these stocks a bit in 2015 and 2016 when they still had some optionality to them but have been mostly out since late 2016. these days, i know far too many people whose entire portfolio is pot stocks to not be concerned and the number of companies being founded to take advantage of investor demand for pot stocks is always a concerning sign of a bubble. in fact, this is the #1 sign of a bubble. just like how an iced tea company changed their name to take advantage of blockchain mania. while weed stocks have value and many blockchain companies and cryptos likely have no value, they are likely tied by the hip as the two manias feed each other.

HAHAHAHAHAHAHA. awesomely predictable. timing could’ve have been slightly better but a complete waterfall collapse was inevitable. 20% down midday in 16 minutes. the option i proposed went up as much as 133% from the value quoted yesterday. up only 44% now that everyone’s panties aren’t so wound up.

What was? WEED? You buy options?

MEDFF was volatile but ended flat after up 20% yesterday. 

you basically need to come from a target school pedigree/work at prestigious firm in the US/have a really good connection.

- AF hivemind

yeah, weed tanked. medff is doing well. congrats. keep a tight stop on that baby.

ACBFF just pumped 55mm into my pre-ipo play TGOD for 18% stake. Also includes options to increase stake when hitting milestones and a supply contract for up to 20% of production

'A flute with no holes, is not a flute. And a donut with no hole, is a danish'

and they keep going again. next put buy in a day or so. if WEED hits $40, buying $3 puts probably makes a lot of sense. mama loves a $7.3 billion valuation for $350 million in tangible assets.

geez. vols are insane. tough to buy puts with 120%+ implied vol. truly reaching the point of insanely bubblishous. january effect in full gear. it’s like the mining speculators have all turned their attention to weed stocks but the market caps are so large. first year junior miners have not rebounded strongly in dec-jan in a decade or so by my count.

Yeah, had a bought deal today on MEDFF, so down ~10%. Still up 80% from when I mentioned it on here on 12/7. Up much more from cost. I am actually thinking about rotating out of Canada and into the US market ahead of initial sales reports, especially if Sessions gives me some vol for an entry point.

you basically need to come from a target school pedigree/work at prestigious firm in the US/have a really good connection.

- AF hivemind

TGOD largest canna-ipo started trading today. making some good $$$

'A flute with no holes, is not a flute. And a donut with no hole, is a danish'

Looks like takeout could be in the cards for MEDFF:

https://twitter.com/_deepakanand/status/991859842447888384

you basically need to come from a target school pedigree/work at prestigious firm in the US/have a really good connection.

- AF hivemind

not sure ACB can pay much for MEDFF given its size but will be interesting. congrats on sticking through and likely getting paid out.  

^Thanks! We’ll see. Both ACB and MEDFF halted.

you basically need to come from a target school pedigree/work at prestigious firm in the US/have a really good connection.

- AF hivemind

Medreleaf acquisition confirmed, 34% premium from current price:

https://www.newswire.ca/news-releases/482519231.html

you basically need to come from a target school pedigree/work at prestigious firm in the US/have a really good connection.

- AF hivemind

Nice job. I have no idea about this space

whats legit here?

"You want a quote? Haven’t I written enough already???"

RIP

As always, do your own DD. The market is extremely volatile. However, things like legalization are once in a lifetime regulatory changes that should present opportunities. I’ve focused more on companies that license product, produce extracts, operate dispensaries or provide a service to the industry. Reddit’s weedstocks subreddit is a good place to get a look at some relevant companies, but 60% of the posts on there are just pumping their names.

you basically need to come from a target school pedigree/work at prestigious firm in the US/have a really good connection.

- AF hivemind

check out TGOD - fully licensed producer of plant & just approved to make oil products. Just completed the largest canadian pot IPO in history, Aurora owns a large stake & frankly will probably buy the company at some point over the next year or two. Money raised will be used to creat a massive new production facility in quebec & they already have an agreement to sell to both Aurora & SAQ (i believe thats the name, the booze dealer in quebec) so their sales channel is strong & the management team has a track record of success

full disclosure - im long TGOD so take with a grain of salt as this is the bull case

'A flute with no holes, is not a flute. And a donut with no hole, is a danish'

you guys shoulda got in on TGOD … killing it!

'A flute with no holes, is not a flute. And a donut with no hole, is a danish'

LEAF up 10% today. Debating how long to hold.

What’s going on with TGOD, hype or reasonable…basically: you selling or holding?

you basically need to come from a target school pedigree/work at prestigious firm in the US/have a really good connection.

- AF hivemind

where can i get free access to indsutry report on mary j. asking for a friend

I love my cheese. I got to have my cheddar.

Nerdyblop wrote:

where can i get free access to indsutry report on mary j. asking for a friend

Don’t think you’re going to find any from reputable sellside shops. Plenty of crap on SA though.

Didn’t dawn on me that Canada’s vote to legalize is today. Should be interesting.

C-45 passed. Cannabis legalized in Canada. 

you basically need to come from a target school pedigree/work at prestigious firm in the US/have a really good connection.

- AF hivemind