Cannabis stocks have been on fire in 2019. The North American cannabis stock index is up 42% in the first 10 weeks of the year. Take a look at this big rally below.
Some of our favorite cannabis stocks are up even more.
- Aurora Cannabis (ACB) is up +102% in 2019.
- GW Pharma (GWPH) is up +77%.
- Canopy Growth Corp (WEED, CGC) is up +72%.
Take a look at the big gains below.
I see Three Triggers for the Big Rally
#1 Cannabis stocks fell sharply in the fourth quarter and were deeply over sold at the end of 2018: Many investors, including me and my clients viewed this as a great opportunity to buy these stocks at the 52-week low. Knock on wood but its turned out to be the right move. Take a look at the big sell off in the fourth quarter and big bounced in 2019.
#2 A steady stream of good news has hit the cannabis industry in 2019: we’ve already seen a ton of good news in 2019. For example, multiple US states are quickly moving forward to legalize recreational cannabis. That includes Illinois, New York and New Jersey – three states with a massive population that would have a huge impact on the us cannabis market.
#3 More countries across the world are legalizing cannabis: The us is currently the largest cannabis market in the world but there’s a steady stream of countries across the world that are legalizing cannabis. That includes some of the largest countries in Europe such as France and Italy.
As you can see things are looking good for the cannabis sector. We’re off to a strong start in 2019.
While most of our cannabis stocks have been crushing it – we had two that struggled.
I Recently Sold Two Cannabis Stocks for my Clients
Auscann (AC8) and Cann Group (CAN) were two of the first companies in Australia to win permits to sell medical cannabis. I have been a huge fan of both of these companies – to me they looked like the second coming of Canopy and Aurora – except in Australia. Both looked like they would emerge as future cannabis industry leaders in Australia. That could still happen.
However despite the promising outlook – both of these companies have struggled on the chart – both spent most of the last 12 months trending lower – hitting a series of new 52-week lows. Take a look below at how weak these two stocks have been.
That’s the reason I decided to dump these two cannabis stocks – selling all shares from my client portfolios.
Here’s the good news – I am using the extra cash to buy some new cannabis stocks that look very exciting.
Two of my favorite targets?
- Cresco Labs (CRLBF)
- Charlottes Web (CWEB)
Here’s a recent report I wrote on Cresco.
I’m really excited about both of these new additions to my client portfolios and I am expecting good things.
What Should We Expect from Cannabis Stocks Moving Forward?
Cannabis stocks are off to a great start in 2019 – and looking forward I am expecting more of the same.
I see a very bullish pattern on the North American cannabis stock index. A big rally, up trend began in March of 2016 – and even though its been a bumpy ride – the cannabis sector is still very much in that up trend.
If the index can bust through this ‘double top’ at the 52-week high I am expecting the sector and many individual cannabis stocks to make a big run deep into a new all-time high. Take a look.
How Do I plan to Proceed for my Clients?
My plan is to keep holding all cannabis shares for my clients. We’re in a bull market and I see more gains ahead.
Your Investment Partner,
This report is for entertainment purposes only. Every investor should consult with an investment advisor before making investment decisions. The Vodicka Group, Inc. is not a broker/dealer. We do not receive compensation for mentioning stocks. At various times, the clients, publishers and employees of Vodicka Group, Inc., may buy or sell the securities discussed for purposes of investment or trading. Michael Vodicka owns shares of Canopy Growth Corp, Aurora Cannabis, GW Pharma, Cresco Labs and Charlotte’s Web.