The following is a quick update to show you that the road forward for marijuana investments continues to improve.
First, a few developments on the political side.
John Boehner and Bill Weld, both Republicans, recently joined the advisory board of Acreage Holdings, which owns a diverse group of marijuana operations in eleven states in the U.S. While Weld has always been a bit progressive, Boehner just nine years ago said he was “unalterably opposed” to marijuana legalization. Somehow, he altered his views.
Also, President Trump has promised Senator Cory Gardner of Colorado that he will support efforts to protect states that have legalized marijuana in exchange for Gardner’s lifting of the blockade on Department of Justice nominations. Gardner has held up about 20 nominations so far, and Trump’s support of states’ rights on marijuana will allow him to get his team at the DOJ in place.
Meanwhile, on the commercial side, an internal review by the FDA suggests that GW Pharmaceuticals’ (GWPH) Epidiolex—basically a pharmaceutical grade version of the CBD oil that’s widely available—might be approved as a treatment for early-onset drug-resistant epilepsy syndromes later this year. GWPH was one of my original recommendations back in August, and we sold for a small profit in November.) Some insurers have suggested that GW might charge $35,000 to $50,000 for a year of Epidiolex, even though you could get a similar product at your neighborhood store for far, far less.
As to the marijuana stocks, the consolidation continues, though the odds improve day by day that the bottom has passed. If I had to pick favorites today, I’d choose the stocks acting best, the stocks that are at or above their 50-day moving averages.
In my portfolio, these are CannaRoyalty (CNNRF), Canopy Growth (TWMJF), Innovative Industrial Properties (IIPR), Kush Bottles (KSHB) and Turning Point Brands (TPB).
Conclusion: I remain long-term bullish on the marijuana sector, aiming to build a diversified portfolio of the best U.S. and Canadian stocks, and I’m looking forward to delivering your next quarterly issue of Cabot’s 10 Best Marijuana Stocks in the middle of May.