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At least four states posted record cannabis sales in June and July, Illinois, Maryland, Massachusetts and Missouri.

These sales trends and ongoing legalization around the world are why global cannabis sales will hit $104 billion a year by 2030, says a recent report from Vantage Market Research. That would represent an annual growth of 26% a year from 2023 to 2030.

Despite these positive trends, cannabis stocks are being held back by delays in reform efforts in Washington, D.C.

Inflation cooled last month to its slowest pace in more than two years, buoying markets even though the Fed may raise interest rates later this month.

While the Nasdaq composite is a basket of more than 3,000 stocks listed on the Nasdaq exchange, the Nasdaq 100 is the basis for the QQQ – the second-most heavily traded ETF in America, after the SPY ETF which tracks the S&P 500.

After the stellar finish to last year, the market rally is continuing, sort of.

The S&P 500 is up for the year. But it’s only up 1.69% and participation is far less broad than it was. Technology stocks are driving the market higher but most of the other sectors are down. The AI euphoria is continuing, but the interest rate rally is gone.

It’s earnings season again! And this one should be more important than most.

Earnings are, of course, a big deal for the individual company. But in addition to company-specific fundamentals, Wall Street will be carefully watching what company earnings indicate about the macro environment.

Today’s stock is from one of the hottest sectors of the market, China, and it’s got a big growth story—as well as the beginnings of a move to expand outside of China. As for our current stocks, in general all is well, not least because of the market’s recent rebound. In fact, we’ve got several stocks hitting new highs!

Today’s bargain is a little-known stock in the fast-growing industry of marijuana farming, production and distribution, which recently was selling at a discount of more than 50% from its recent high. It’s rebounded a bit since then, but is trading calmly, and I think this is a decent entry point.

Today’s portfolio changes: Archer Daniels Midland (ADM) moves from Strong Buy to Buy, Boise Cascade (BCC) moves from Buy to Hold and Tesoro (TSO) moves from Hold to Buy.

This week’s Friday Update includes our comments on earnings reports from four companies and more color on our initial review of another company that reported last week. If Hollywood makes a movie about this market cycle, perhaps it will be called “Revenge of the Moat.”

Today’s note includes earnings updates, ratings changes and the podcast.

Many of the underlying trends in cannabis continue to be favorable even if this is not reflected in the stock prices, which are down sharply this month.

States continue to advance legalization of recreational use. Lawmakers remind us that federal regulatory reform in banking remains on the table, and will get taken up by key Congressional committees this year. Europe should begin to advance recreational use legalization within the next several weeks, starting with Germany. Cannabis sector insiders are stepping up to buy stock. Industry consulting firms continue to affirm robust sales growth projections of 13% a year through 2027. There are tentative signs that price compression is neutralizing.

Last week had a couple of big news items and, not surprisingly, the market was all over the place, with some strong up action, a wild reversal and then some support after the Fed’s talk. All in all, we consider the shows of support modestly encouraging, along with the fact that sentiment has taken a sharp turn lower as the worries of the world come back into focus. But nothing has really changed with the here and now: The intermediate-term trend of the major indexes and most stocks is pointed down, with few names making any progress. That can obviously change, but for now, we’re still patiently waiting for the buyers to retake control. We’ll leave our Market Monitor at a level 5 tonight.


This week’s list is another mixed set of stocks, though we like the fact that we’re seeing a few more positive earnings moves. Our Top Pick is trying to leave behind a multi-month range after its recent earnings surge.

The market looked ugly early last week before finding some support, but we’re going to need to see more before changing our stance. We will say that, with September in the rearview mirror, there are many studies that point to a year-end rally and we continue to see a decent number of potential growth-y leaders that aren’t far from overcoming some technical hurdles. In other words, now’s not the time to stick your head in the sand, but as always, we want to see it first (some decisive buying) before taking much action. We’ll leave our Market Monitor at a level 5.

This week’s has a broad array of resilient stocks, with our Top Pick in pole position to be one of the top growth stocks—if and when the market gets going.

Friday was an encouraging day, not just because the indexes were up—for the first time in a while, we finally saw a few stocks that were holding up well really pop higher. However, does that change what we’re thinking? Not yet—from a top-down perspective, the intermediate-term trend remains for the indexes and the vast majority of individual stocks. The way we’d think about it is that what we’re seeing out there is a good first step, but the market will have to show more to gain enough momentum for a sustained advance. We’ll leave our Market Monitor at a level 5 for now.

This week’s list targets many of the stocks that are perched near (or are already hitting) new high ground. Our Top Pick is leading a possible new group move in cybersecurity stocks—you can start small here, though we prefer to look for pullbacks as selling on strength is still the norm in the market.

The major indexes all closed last week near their highs, which is one big factor keeping the top-down evidence very bullish; nothing has changed with our big picture positive thoughts. That said, right now, we don’t think the situation is as strong as the indexes suggest—just looking at a variety of names, it’s clear many are consolidating even as the S&P and Nasdaq tested new high ground late last week. Again, we’re not saying that’s a big bugaboo, but right now, we continue to think being more discerning when looking for entry points makes sense, as does pruning some laggards if you have them. We’ll keep our Market Monitor at a level 7.

This week’s list has something for everyone, with a decent amount of cyclical exposure but also some true blue growth names as well. Our Top Pick is helping to lead a new group move in metal stocks in general (and copper in particular).

Last week was another doozy for the bulls, with the major indexes suffering a good-sized decline and many growth stocks taking it on the chin. With the major evidence still pointed down, we continue to advise holding plenty of cash and doing little on the buy side. That said, it’s also important to remain flexible, as there remains plenty of underlying potential positives, including another round of hugely pessimistic sentiment measures and a positive divergence in the broad market. As we’ve written before, if something actually goes right in the world, it’s possible the bulls could make a run at things, but we have to see it for more than a day or two to believe it. Our Market Monitor remains at a level 3.

This week’s list actually has a lot of names that look poised for intermediate-term moves … if the market can get out of its own way. Our Top Pick is an old friend in the medical device space that actually has four months of positive momentum on its chart.