Cannabis stocks are having a very good year and with more US states and countries legalizing I am expecting more gains.
I hope everyone is having a great Memorial Day weekend. Today – I am dropping in for a quick update on the cannabis sector.
Cannabis stocks are having a very solid year in 2019.
The North American cannabis stock index is up 25%.
Many of our favorite cannabis stocks are up even more.
US based Cresco Labs (CRLBF), one of the largest US cannabis companies and a direct play on Illinois’s attempt to go legal, is up 117%.
US based cannabis landlord Innovative Industrial Properties (IIPR) is up 90%.
Cannabis biotech GW Pharma (GWPH) is up 82%.
The largest cannabis company in the world, Canopy Growth Corp (CGC) is up 58% in 2019.
Those big gains have been driven by two triggers.
#1 the cannabis sector was over sold in the 4th quarter of 2018 after a nasty bear market: the cannabis sector suffered a very tough bear market in the fourth quarter of 2018. The cannabis sector became over sold – and it ended up creating a great buying opportunity and a sharp rebound in the first quarter of 2019. Take a look at the sharp down turn below.
#2 more US states and countries are going legal: the tidal wave of cannabis legalization continues to accelerate. For example, Illinois, one of the most populous states in the US is on the fast track to legalizing recreational cannabis. Connecticut, New Hampshire, Vermont and Minnesota are also moving toward legalizing recreational.
Outside the US, more countries are following suit.
Mexico is on the fast track to legalizing recreational cannabis by October 2019.
Mexico Has Plans to Legalize Marijuana by October 2019
I expect Mexico to deliver on its goal – and if it does – it would make the US the only country in North America that has not legalized medical and recreational cannabis on the federal level. That would serve as a very strong catalyst for the US to finally go ahead and introduce federal legislation. If that happened in the US – it would be an enormous win for the industry and I would expect cannabis stocks to post a huge rally.
What should we expect from cannabis stocks moving forward?
Looking forward I am optimistic on cannabis stocks.
June and the second half of the year have been seasonally strong periods for the cannabis sector.
I also expect more US states and countries to move toward legalization.
I did some re balancing of the cannabis portfolios for my clients going into 2019 – adding more US cannabis stocks such as Cresco Labs (CL), Charlotte’s Web (CWEB) and Harvest Health and Recreation (HARV). Those moves are working out well with all three performing great in 2019.
My plan is to stay aggressive with the cannabis sector. Short-term volatility is part of the game – but the long-term trend is super bullish and I am expecting a strong second half of the year.
If anyone has questions feel free to say hello.
- mike@vodickagroup.com
- mikevodicka@gmail.com
Disclaimer: This report is for entertainment purposes only. Every investor should consult with an investment advisor before making investment decisions. The Vodicka Group, Inc. and Weed Stock Advisor website 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 Cresco Labs, Innovative Industrial Properties, Canopy Growth Corp, GW Pharma, Charlotte’s Web, Harvest Health and Recreation.
