Investing

Cannabis (Marijuana) Stocks

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  • Jan 17th, 2021 5:39 pm
Jr. Member
Sep 8, 2008
197 posts
1 upvote
Toronto
Any word from the Task Force on Marijuana Legalization?
I did a quick google search and nothing so far, but I thought it was supposed to be out before December?
Deal Fanatic
Feb 15, 2006
8758 posts
3209 upvotes
Toronto
Today's Nation Post had an interesting article about small caps, and it had a section on Marijuana stocks. He believes the marijuana stocks are all going to 10 cents, except for TNY that he has a position in.

...
Another very hot sector in the junior resource space has been marijuana stocks. It’s an area Palmer has largely avoided, as he is quite negative on the sector as a whole.

“I think investors need to be very cautious because these stocks are trading at crazy valuations, and there is nothing proprietary about the majority of them,” he said. “I believe they are all going to 10 cents within a couple of years, and it may happen sooner rather than later, when people realize these companies are not going to be as profitable as they thought.”

Palmer likens it to growing tomatoes. Companies are simply growing a plant, and the margins are going to get squeezed.

At the same time, he believes there is a lot of misinformation in the marketplace that marijuana cures everything under the sun.

“There is no scientific evidence for the majority of the claims,” Palmer said. “There are probably lawsuits that are going to come out of it all too, so it’s just not a space I want to be in.”

The manager does have a position in Tinley Beverage Company Inc. (TNY/CSNX), which makes beverages with hemp, and the CBD and THC product from marijuana plants.

“It’s unique because not many companies have a beverage, and they are targeting the U.S. market, which is far larger than the Canadian market,” Palmer said.

He also highlighted Tinley’s partnership with beverage maker Cott Corp. to formulate a proprietary mix that is actually appealing to consumers’ palettes, “because you can’t just throw marijuana oil into any food product and expect it to taste good.”
Member
User avatar
Feb 27, 2013
219 posts
144 upvotes
Calgary
Arrgh wrote: Today's Nation Post had an interesting article about small caps, and it had a section on Marijuana stocks. He believes the marijuana stocks are all going to 10 cents, except for TNY that he has a position in.

...
Another very hot sector in the junior resource space has been marijuana stocks. It’s an area Palmer has largely avoided, as he is quite negative on the sector as a whole.

“I think investors need to be very cautious because these stocks are trading at crazy valuations, and there is nothing proprietary about the majority of them,” he said. “I believe they are all going to 10 cents within a couple of years, and it may happen sooner rather than later, when people realize these companies are not going to be as profitable as they thought.”

Palmer likens it to growing tomatoes. Companies are simply growing a plant, and the margins are going to get squeezed.

At the same time, he believes there is a lot of misinformation in the marketplace that marijuana cures everything under the sun.

“There is no scientific evidence for the majority of the claims,” Palmer said. “There are probably lawsuits that are going to come out of it all too, so it’s just not a space I want to be in.”

The manager does have a position in Tinley Beverage Company Inc. (TNY/CSNX), which makes beverages with hemp, and the CBD and THC product from marijuana plants.

“It’s unique because not many companies have a beverage, and they are targeting the U.S. market, which is far larger than the Canadian market,” Palmer said.

He also highlighted Tinley’s partnership with beverage maker Cott Corp. to formulate a proprietary mix that is actually appealing to consumers’ palettes, “because you can’t just throw marijuana oil into any food product and expect it to taste good.”
Interesting stance, thanks for sharing. I 100% agree that current and potential investors really need to be cautious here and not put all their eggs in one basket. I would also echo the concerns about valuations which don't translate to the way this industry has been trading the last couple months.

However, where I disagree with Palmer is in his views about margins and health claims. Even though the health claims aren't necessarily proven, it does not mean this is an industry that will not take off. Everyone knows Tobacco/cigarettes are unhealthy, this is proven and common knowledge. Yet it still represents a $28-32 billion industry in Canada. Current estimates put the black market for marijuana in Canada at $5-7 billion. Also funny how he uses tomatoes as an example, yet you have companies like Heinz selling more than $1.5 billion a year in ketchup.

Secondly, regarding margins, the government has stated multiple times that they plan to have some degree of control in regulating the price per gram in order to ensure the supply is safe and controlled (think of minimal prices on alcohol sales). So there could definitely be some issues if the market is over saturated with entrants, but one would assume the biggest players like Canopy Growth will likely have the most optimum systems in place to realize higher margins.

P.S. Just throwing around some ideas, so please don't take this as argumentative, but rather as encouraging healthy conversation
~Let your actions reflect your desires
Sr. Member
User avatar
Jan 16, 2011
712 posts
164 upvotes
Hamilton
“I believe they are all going to 10 cents within a couple of years" Seriously? This doesn't make any sense what so ever.
Me thinks he wants all the weed stocks for himself!
Sr. Member
Oct 11, 2010
966 posts
317 upvotes
Charlottetown
So who's buying EMC on Dec 9th?
Deal Fanatic
Feb 15, 2006
8758 posts
3209 upvotes
Toronto
superlink wrote: “I believe they are all going to 10 cents within a couple of years" Seriously? This doesn't make any sense what so ever.
Me thinks he wants all the weed stocks for himself!
I don't think he is really saying they will be worth exactly 10c, but that most of those companies won't survive. It's similar to the beginning of the automobile industry. There were 100+ companies at the start and most of them failed after a short while. The valuation of most weed stocks are really really high. If they start to make lots of money soon that's fine. But there are still lots of if's.

On a separate note. He likes TNY because it's not just selling weed, but in beverage. Isn't EAT also another company that's trying to sell weed in food?
Sr. Member
Oct 18, 2013
562 posts
118 upvotes
Oshawa
I think he is bitter as he missed the boat! He probable wishes he was in when they were all pennies.
Sr. Member
Oct 18, 2013
562 posts
118 upvotes
Oshawa
jfall wrote: So who's buying EMC on Dec 9th?
I'm in! might not own it for a long time.
Sr. Member
Aug 24, 2006
657 posts
104 upvotes
Scarborough
GeneP66 wrote: I'm in! might not own it for a long time.
Anyone know what time today it starts trading ? ( EMC )
Sr. Member
Oct 11, 2010
966 posts
317 upvotes
Charlottetown
ahlavanthan wrote: Anyone know what time today it starts trading ? ( EMC )
It's tomorrow, at open
Deal Addict
User avatar
Nov 27, 2005
1845 posts
1142 upvotes
So expected price opening is to be at $1.50-$2.00.

Anyone expect to buy that low at 9:30 am?
Sr. Member
Oct 11, 2010
966 posts
317 upvotes
Charlottetown
djpr wrote: So expected price opening is to be at $1.50-$2.00.

Anyone expect to buy that low at 9:30 am?
I have a feeling it will pop up to 2.50-3 quick
Member
User avatar
Jul 11, 2015
296 posts
120 upvotes
Victoria, BC
jfall wrote: I have a feeling it will pop up to 2.50-3 quick
so how do you find this stock? whats the actual name not just the abbreviation?

Anyone know if quest trade will have access to it?
You're the average of the five people, you most associate with.
Sr. Member
Oct 11, 2010
966 posts
317 upvotes
Charlottetown
jointedhornet wrote: so how do you find this stock? whats the actual name not just the abbreviation?

Anyone know if quest trade will have access to it?
It's opening public tomorrow on TSX-V symbol EMC. The company name is Emblem Cannabis
Sr. Member
Oct 18, 2013
562 posts
118 upvotes
Oshawa
jfall wrote: I have a feeling it will pop up to 2.50-3 quick
I'm expecting it to open at$4+ range? CRZ opened at &5.00 and settled down at $3.20
Deal Fanatic
Feb 15, 2006
8758 posts
3209 upvotes
Toronto
New kid in town. CRZ

The Financial Post reports in its Thursday, Dec. 8, edition that CannaRoyalty, a U.S.-based marijuana company, will become the first United States firm to sell stock on the public market, listing its shares in Canada, a move it is forbidden to make south of the border. The Post's Sunny Freeman writes that the company, which holds a portfolio of 18 marijuana companies -- 15 of which are in the U.S. -- will sell its stock beginning Thursday on the Canadian Securities Exchange using the symbol CRZ. CannaRoyalty had a pre-listing valuation of $150-million, but declined to say what its opening price would be, saying the last private trades were in the range of $4.25 to $4.50 a share. Chief executive officer Marc Lustig says he chose the CSE after pushback from the Toronto Stock Exchange because the company was not a pure medical play. Medical marijuana is currently the only legal way to sell the product in Canada, but that is expected to change, given the federal government's plans to introduce legislation that would legalize recreational marijuana this spring. Canadian marijuana stocks, including CannaRoyalty investor Aphria, have been on a tear in recent weeks in anticipation of a recreational market.
Sr. Member
Oct 18, 2013
562 posts
118 upvotes
Oshawa
EMC is not ipoing tomorrow, but Monday now.

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