It has been a while since my first interview with CannaInsider, and host Matthew Kind invited me for a follow-up. I noted that the huge progress the cannabis industry has made over the past almost two years has not been matched by the publicly-traded stocks in the U.S. At the same time, the Canadian cannabis industry has advanced dramatically, but, in contrast, the market there for its publicly-traded stocks has indeed developed positively.
I discussed the current state of the cannabis stock market, which remains relegated to the OTC (over the counter), and suggested that no one should invest in any company that can’t meet the burdens of filing with the SEC. Even when a company does file with the SEC, it is almost always extremely risky when it trades on the OTC.
I explained my focus list, which is a process of creating a watch list that investors in general should consider. For the cannabis sector, there are 25 names (now 24) that I “watch” and don’t necessarily recommend. In fact, many of them are almost certain to fail, but, at least for now, traders actively buy these stocks, which can have substantial market caps.
We spent some time discussing the Canadian cannabis stocks. The medical program there has some tough limitations, like mail order and potency caps on extracts, but the rules are improving and the program, MMPR, is also growing rapidly. Further, legalization for adults is on the near-term horizon. While I didn’t mention the stock that I thought at the time (which was in May, by the way) with the most appreciation potential (and it was!), I did discuss Canopy Growth (TSXV: CGC) (OTC: TWMJF) and Aphria (TSXV: APH) (OTC: APHQF).
Matthew brought the conversation back to the U.S., and we discussed MassRoots (OTC: MSRT), which has been somewhat disappointing to me in terms of their recent progress. Again, the interview was conducted a few months ago, so we now know that they weren’t able to uplist to the NASDAQ, but I had suggested that it was premature.
I also spoke favorably about Surna (OTC: SRNA), which has some issues with which it is contending but has experienced strong top-line growth and has new products that it is introducing to customers. I spoke about their management turnover and the outside-experience that the new CEO brings to a company that does seem to have cannabis industry know-how and experience already.
In response to Matt’s question about institutional investors, I suggested that only GW Pharma (NASDAQ: GWPH) and the Canadian LPs are of interest at this time.
1:30 – How has cannabis investing changed over the last couple of years
4:37 – Alan talks about his background in cannabis investing
6:31 – Alan explains what a CFA is
7:37 – Is there room in everybody’s portfolio for cannabis stocks
11:42 – Alan talks about the quality of OTC stocks
15:15 – Alan discusses the fundamentals
16:39 – Alan talks about Canadian stocks
23:53 – Alan discusses the state of MassRoots and other companies
31:11 – Alan talks about big institutional investors
33:37 – Matt challenges Alan to pick one stock to invest in
37:55 – Alan’s book recommendation
39:24 – Alan’s tool he uses on a daily basis that is crucial to his work life
40:41 – 420 Investor contact details
Read the transcript or listen to “Cannabis Stocks Getting Better? with Alan Brochstein”: http://www.cannainsider.com/alan-brochstein-cannabis-stocks/