All Trends are Good — No Changes
With all five states that voted on marijuana proposals last week saying “Yes,” the trend toward nationwide legalization is now clearer than ever—and marijuana investors have been acting accordingly. Buying volume has soared, while selling pressure has been minimal.
In our own portfolio, the majority of our stocks now have very strong charts. And even the ones that are lagging (JUSHF in particular) still look very healthy.
So today I’m making no changes. Oftentimes, the best thing to do is nothing. Sit tight, and let the stocks do the work. My only temptation is that we still have roughly 11% in cash, and I’d like to get that invested, but I’ll wait and see if an opportunity presents itself.
As for news, there are a couple of items regarding our stocks.
Canopy Growth (CGC) reported third quarter revenues of $101.5 million on Monday, up 76% from the year before, but the company is still losing money—and there are no profits in sight. Still, the stock has been very strong. And today the company, in partnership with Martha Stewart, announced the availability of an elegant 60-count sampler box featuring 15 seasonal flavors of CBD gummies. The flavors are Black Currant, Black Raspberry, Blood Orange, Calamondin, Pink Grapefruit, Green Apple, Huckleberry, Kumquat, Meyer Lemon, Passion Fruit, Persian Lime, Quince, Red Raspberry, Rhubarb and Strawberry. Retail price is $64.99 at ShopCanopy.com. If you try them, let me know what you think.
Green Thumb (GTBIF) will release third quarter results after the market close today. Analysts are looking for revenues of $135.4 million (up 99% from the prior year) and EPS of a penny.
GrowGeneration (GRWG) will also release third quarter results after the market close today. Analysts are looking for revenues of $47.4 million (up 117% from the prior year) and EPS of seven cents.
Innovative Industrial Properties (IIPR) released third quarter results last Friday and the results were terrific. Revenues were $34.3 million, up 197% from the prior year, while funds from operations were $1.28 per share, up 49% from the year before.
Lastly, a word about New Jersey going legal. Technically, the legalization vote (with 67% in favor) says that marijuana will be legal to sell in the state on January 1. However, the fastest state to go from a legalization decision to actual retail sales was Nevada, with eight months. Maine took the longest—47 months. New Jersey therefore is likely to be somewhere in the middle, but almost certainly toward the shorter end. In fact, Boris Jordan, Executive Chairman of Curaleaf (CURLF), says his company is already constructing large facilities in New Jersey, and expects the state could be well-supplied by the middle of next year. Curaleaf has allocated more than $100 million to build out additional cultivation facilities in Arizona, New York, New Jersey and Pennsylvania so there’s no question it will remain a major contender for national leadership.
FYI, our portfolio is now up 43.8% YTD, while the Marijuana Index is up 9.4%.