A Blastoff for Marijuana Stocks
Yesterday saw strong buying in marijuana stocks across the board, with both U.S. and Canadian stocks benefitting.
One reason for the strength was apparently Kamala Harris’ remark Wednesday night that she would decriminalize marijuana at the federal level. But there are bigger reasons, in my opinion, with the biggest being the fact that the broad market as a whole is now strengthening, with growth stocks leading the way—and marijuana continues to be one of the fastest-growing industries in the country. Plus, the sector had a nice rest, so there were buyers waiting to get on board.
In my Wednesday update, I discussed the first signs of this renewed uptrend, and recommended some buying of the strongest stocks. The portfolio averaged up in Innovative Industrial Properties (IIPR) and added a new position in TerrAscend (TRSSF), the fifth largest U.S. producer.
Thursday’s broad and powerful move higher strengthens the case for the sector and thus now I’m feeling even more aggressive, particularly about the five leading U.S. producers.
As a result, in the portfolio, I will now average up in the stocks of the five U.S. producers—Cresco Labs (CRLBF), Curaleaf (CURLF), Green Thumb (GTBIF), TerrAscend (TRSSF) and Trulieve (TCNNF)—increasing our position in each by 50%. This will reduce the portfolio’s cash level to roughly a 20% level.
As always, we will adapt to the action of the stocks in the days ahead, and if this renewed uptrend continues, we will quickly become fully invested again.
I’ll keep you posted.
FYI, our portfolio is now up 21.7% YTD while the Marijuana Index is down 7.3%.