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Cannabis Investor
Profit from the Best Cannabis Stocks

Cabot Marijuana Investor Update

This is an unscheduled interim update to give you some guidelines to deal with the current strength of marijuana stocks.


This is an unscheduled interim update to give you some guidelines to deal with the current strength of marijuana stocks.

First, as I said in last week’s issue, if you want to succeed as an investor in individual stocks, you’ve got to invest in sync with the sector.

The sector had a long consolidation period from mid-January through August 15, when Constellation Brands’ $4 billion investment in Canopy Growth (CGC) sent a wake-up call to institutional investors that they’d better get into the sector. This was a big event, and a big reason to believe that the current uptrend of the sector will run longer than a few weeks. Even yesterday, investors were still piling into CGC on big volume!


But you’ve got to recognize and respect the volatility of these stocks, particularly those that trade under $10. They can drop 20% or more in one day, and if you’ve just bought, that doesn’t feel so good—thus my common advice about waiting for pullbacks to buy, or starting small.

Also, note that there are forces—short-selling outfit Citron Research among them—that thrive when these stocks fall, and that try to release their research reports (typically showing how overvalued a stock is) at exactly the moment that stocks are at record highs.

In recent days CV Sciences (CVSI) and Cronos (CRON) have been targets of Citron, and yesterday Citron targeted Tilray (TLRY) as well—to no effect so far. This may be a sign that investors are tired of the boy crying wolf, or it may simply be a sign that institutional buying money (combined with short-covering) currently dwarfs the selling power of the bears.

In any case, short sellers are just a small piece of the puzzle, and in the long run, I have no doubt that the flood tide of money coming into the sector—the fastest-growing industry in America—will dwarf the efforts of bears to make money on the short side.

Thus, the biggest challenge for most of you today is to identify sensible entry points for the stocks that interest you most of the 13 I profiled in last week’s issue.

And the biggest challenge for me is similar: finding decent entry points for reinvesting the 20% cash position that came from profits I took out of the Marijuana Portfolio last week—keeping in mind all along that the goal is to help you build big long-term winners in the sector that might well be held even 10 years from now.

Stocks that offer fairly decent entry points today are ACBFF, OGRMF, ITHUF and CVSI, which is not in the portfolio yet.

So today, I’m investing in CV Sciences (CVSI), the biggest vendor of CBD oil in the U.S., noting that the stock bounced off its 50-day moving average last week, and is in a relatively calm spot compared to other stocks in the industry.


I’ll invest a third of the portfolio’s cash, and as usual, our transaction will be recorded at the average price of tomorrow’s trading range.

The rest of the cash will wait patiently until other opportunities arise. Time is on our side.