Cannabis is slowly but surely gaining acceptance and has been legalized, or is in the process of legalization, in several nations, states, and other jurisdictions for recreational, medicinal, and other uses. In the U.S., Connecticut is the latest state that will legalize, tax, and regulate cannabis. This week, news also comes that Senate Majority Leader Chuck Schumer has proposed federal decriminalization of marijuana and wants to begin regulating and taxing it. The bill also would let cannabis companies use banking services and trade on major stock exchanges.
With such positive news, where lies the greatest potential to invest in weed stocks?
00:00 – StoneCastle Asset Management Portfolio Manager Bruce Campbell
00:57 – Major developments in cannabis sector
02:03 – Standout company developments
03:10 – California over saturation
04:46 – CBD market potential
07:32 – Runaway market leader
08:37 – Trulieve (TRUL) legal investigations & stock price risk
10:07 – Top 10 holdings
There are always the top 5 U.S. players that you see in the news and headlines. The large marijuana companies with dominance in certain regions in the U.S. Trulieve Cannabis Corp (CNSX:TRUL, OTCMKTS:TCNNF) in Florida, or Green Thumb Industries Inc (CNSX:GTII, OTCMKTS:GTBIF) in Illinois, for example. However, the real runaway market leader is yet to emerge as these large companies are still competing in other fringe markets.
In Canada, we are seeing prominent players start to lose market share. Canopy Growth Corp (NASDAQ:CGC, TSE:WEED) and Aurora Cannabis Inc (NASDAQ:ACB, TSE:ACB) seem to be missing out while companies like OrganiGram Holdings Inc (NASDAQ:OGI, TSE:OGI) are gaining with their new high quality, high potency, affordable pre-shredded dried flower: SHRED.
Possibly, the real opportunity is in the smaller U.S. operators. The niche companies where investors can get a multiple bump and opportunities for dramatic company growth. The golden ticket for investing in these companies would be the potential take-out opportunity by larger multi-state operators (MSO).
“We continue to have some of these niche players in the U.S. Ones that trade at substantial valuation discounts to the MSO’s is either targets for those MSO’s or targets for a roll-up strategy that is operating good profitable businesses. Vibe is one, Vext is one, C21 is another, those are good examples of that.” – Bruce Campbell, Portfolio Manager of the StoneCastle Cannabis Growth Fund & CIO of Cannabis Growth Opportunity Corp (CNSX:CGOC)
Watch the full interview to learn the significant developments in the cannabis sector, the companies with the greatest potential, and Bruce Campbells top 10 holdings to look out for.
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