Alert: How to Screen Weed Stocks

by Vlad Karpel

Weed stocks are on a tear as comprehensive medical marijuana use has is now legal in 22 states. In addition 14 states restrict weed use to the controlled distribution of CBD only products. When added together, 47 of America’s 50 states allowing for cannabis sales in some form.

PROGRESS TO LEGALIZE RECREATIONAL MARIJUANA MADE

Despite the calls from a number of anti-drug interests, the steady progress being made to legalize recreational marijuana use is being made. For weed stocks this means continued growth and profits.

11 STATES HAVE LEGALIZED WEED ALTOGETHER

To date, 11 states have legalized weed altogether, which includes both medical and recreational use. The weed stocks that you should be watching will have a presence and growth trajectory in these states.

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MEDICAL MARIJUANA USE NOW LEGAL IN 22 STATES

Comprehensive medical marijuana use has is now legal in 22 states while 14 states restrict weed use to the controlled distribution of CBD only products. When added together, 47 of America’s 50 states allowing for cannabis sales in some form. Weed stocks targeting the retail sales and support in these states are poised for sustained performance.

ADULTS CAN POSSESS UP TO ONE OUNCE

The trendsetting states for recreational use include California where adults can possess up to one ounce and gift one ounce of pot to another adult. Weed stocks in California have already demonstrated growth.

USERS CAN LIGHT UP IN CANNABIS CAFÉS

While public consumption is technically illegal, users can light up in cannabis cafés. Adults can also maintain a home pot garden consisting of no more than six plants. If you’re looking for weed stocks focused on this category, see below for our weed stocks screener!

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LEGALISATION IN ALASKA

Alaska has also legalized recreational pot consumption with very similar limits to possession and home-grown garden production as that of California.

Here too, smoking pot in public is prohibited, but a law passed in March 2019 now allows for on-site weed consumption at licensed retailers (a.k.a. – emporiums).


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COLORADO NOW ALLOWS FOR THE AUTHORIZATION OF CANNABIS CAFÉS

The same holds true for Colorado, the groundbreaking state in the broader pot movement. Again, public consumption is outlawed, but just this month, May 2019, a new law allows for the authorization of cannabis cafés where patrons can enjoy their favorite strain of ganjah with friends. Once again, possession and home-grown production limits are aligned with those of California and Alaska.

WASHINGTON D.C. ALLOWS FOR THE POSSESSION OF TWO OUNCES

Washington D.C. allows for the possession of two ounces of weed that must be used in privacy while the production of 6 plants is legal.

THE STATE OF MAINE ALLOWS FOR THE POSSESSION OF 2.5 OUNCES

The state of Maine allows for the possession of 2.5 ounces of pot for recreational use. Massachusetts lets adults own one ounce of weed.

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MICHIGAN HAS A 2.5-OUNCE LIMIT

Michigan has a 2.5-ounce limit like D.C. Nevadans can own one ounce. Citizens of Oregon can own one ounce and those that live in Washington State can possess up to one ounce of weed.

It’s clear that most of the possession, home-growing and use laws are fairly similar in those states that have legalized recreational pot use. There are some uniform laws that apply to all though.

USERS MUST BE 21 YEARS OF AGE

Buyers and those possessing cannabis must be 21 years of age. Pot cannot be transported across state lines. Local governments can override the state’s legalization laws and driving while high is an offense under DUI regulations.

NEW LAWS OPEN QUESTION WHICH COMPANIES WILL BENEFIT MOST FROM SALES

With what appears to be a widening path of new laws for the open use of marijuana for pure pleasure, it begs the question of which companies operating in the cannabis space are going to benefit most from sales and profits of the recreational weed rollout. It stands to reason that the biggest volume producer of weed is a likely winner in this race to supply the burgeoning market that at the moment is limited to ten states.

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AURORA CANNABIS (ACB) FAVORITE TO BE WINNER FROM THE NEW LAWS

From the various companies I’ve highlighted is past months, Aurora Cannabis (ACB) seems to be one of the odds-on favorites.

AURORA AND ITS COMPETITORS

The company is on track to produce more than 1.2 million kilograms of cannabis in 2019, which is more than twice that of its nearest competitor Canopy Growth (CGC) at 560,000 kilograms followed by Emerald Health (350,000 kilograms) and Tilray (TLRY) at 320,000 kilograms.

AURORA CANNABIS POSTED SEQUENTIAL REVENUE GROWTH OF 20%

In the most recent quarterly report, Aurora Cannabis posted sequential revenue growth of 20% of $65 million, up from $54 million in the prior quarter. The company saw a growth of 37% in the recreational use market. Year-over-year revenue growth was a staggering 305% from $16.1 million.

THE COMPANY ALSO REPORTED STRONG INTERNATIONAL GROWTH OF 40%

The company also reported strong international growth of 40% in sequential quarterly sales. ACB posted a wider loss than expected, but investors are betting the robust top-line growth will show up in bottom line profits at some point.

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ACB MANAGEMENT PROMISE BRIGHT FUTURE

Billionaire activist Nelson Peltz is heavily involved with the company and is instrumental in helping to guide ACB’s international expansion plans. Having a hands-on corporate veteran like Peltz is a very good strategic move on the part of ACB management.

A BREAK ABOVE $10 SHOULD OPEN WAY FOR TESTING $12

Shares of ACB are trading just under $9 and have been trading in a fairly tight range, as pot stocks go. A break above $10 will really open the way for the stock to re-challenge $12 and potentially trade higher as the underlying fundamental story improves along with more headlines about the relaxation of recreational pot laws in the U.S.

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SIGN UP AND BECOME MEMBERS OF ROBOINVESTOR

With the investment theme being established, I encourage all readers of this column to sign up and become members of RoboInvestor, my stock and ETF advisory service for investors that want to own stocks for more than a few hours or a few days. I take a buy and hold approach to our picks in this service, with the objective of booking profits over the course of weeks and maybe a few months.

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INVESTING THE CANNABIS SECTOR INTO DURING THE COURSE OF 2019

We haven’t bought into the cannabis sector yet as the data history is somewhat limited, but as the sector matures during the course of 2019, we’ll be looking to participate the best names with the most bullish readings that will generate consistent profits for us. As is with any new disruptive technology or mega-theme like cannabis, having the right tools to guide one through the minefield of winners and losers is vital.

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Make RoboInvestor your guide to better and more consistent market gains today and join me in my quest to conquer new and exciting sectors that are tomorrow’s blocks of building wealth and fortunes. RoboInvestor – don’t invest without it.

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 “I’m investing my own money in each and every stock as my AI platform identifies.”

And remember we’re not talking about day-trading here.  I’m looking for 50-100% gains inside of the next 3 months, so my weekly updates are timely enough for you to act.

Click Here – To See Where I Put My RoboInvestor Money

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