WHY GRNH WILL BE A 25-BAGGER THIS FALL
Upon evaluation of prior response to sector catalysts, as history is one of the best predictors of the future in terms of price action in a similar situation -- GRNH historically vastly outperforms the sector on any major catalyst.
GRNH was a 40-bagger in 6 trading days in January 2014 and an 8-bagger in 7 weeks this March/April -- that is best in the sector for each of those catalysts during their respective time periods.
Size of the "tradable float": this is obviously determined by subtracting out insider shares from total shares BUT there are a lot of other metrics that really influence this number besides % of insider ownership.
If one thinks of the float as the effective supply, then how tightly shareholders hold onto their shares during a rally is a very important metric -- and the rabidity of the shareholders has an outsized effect on this -- GRNH shareholders are very confident and passionate during a rally and are not quick to sell for a measly double or triple -- this effectively shrinks the float
The MMs who trade in this stock are of a similar mindset due to their prior experiences so there is also less MM churning of shares in GRNH in comparison to most other MJ stocks during a runup
There is no convertible debt so there will not be any new shares hitting the float during the rally, which obviously shrinks the float relative to most stocks down here
In addition, convertible debt invariably causes the owners of said debt to short all rallies in the stock so they can drive the stock price down, convert their debt and use those shares to cover at the bottom -- the less shorting that goes on, the smaller the tradable float
There are other certainly other factors that influence the size of the tradable float which certainly impact the supply of GRNH shares available to buy (and short) during a rally but the above are some of the larger ones
And then I like to think about the demand side of the equation:
GRNH is an old MJ stock, one of the original guard... So it is extremely well-known and popular... It is a huge favorite of those that follow the sector
Dollar volume is the single most important metric in regard to direct measurement of demand and GRNH's dollar volume is extremely high relative to the small float -- this is the perfect storm
The superior liquidity in GRNH, driven by the popularity of the ticker, further serves to drive demand and interest in the stock -- a huge reason why it is my largest holding
The CEO understands PR and knows how to create hype and excitement with press releases
Although true fundamentals in this situation are significantly less important, I do believe that GRNH essentially moved a ton of revenue from Q2 into Q3 so their mid-November report, the one all new prospective shareholders will be reading/following, should show a pretty significant increase in revenues and the all-important press release summarizing the quarterly results should come across as pretty impressive
The comparative superiority of GRNH as a stock with money-making potential becomes a self-fulfilling prophesy as buyers gravitate to this equity over other options
In the end, the supply/demand ratio in combination with the superior liquidity in this stock will not only attract a large number of new shareholders this fall, but even more importantly, it will attract a large number of deep-pocketed individuals and groups who are not just looking for a quick flip on the double -- and in the end, big money is what really drives share prices in these types of scenarios
As for the comparison between GRNH in 2016 vs 2014:
On the supply side, the float is about 10X larger
On the demand side, the daily dollar volume is 10-20X greater
On the price side, the takeoff point should be about .25 compared to .04 or 6X higher
You put all the factors together and it appears that the ratio of demand/supply is greater in 2016 than what we saw in 2014 and the price launchpoint is obviously in a different stratosphere
Now throw in the comparison of the significance of the catalyst -- Colorado launching sales of recreational pot vs. 5 states, including California and Massachusetts passing legalization of recreational pot -- I think 2016 is clearly a bigger catalyst
Now look at the readiness of investors to throw money into the sector -- The amount of money flowing into these MJ stocks in 2016 should absolutely dwarf the amount we saw in 2014 as the sector is a lot more mature, the risk of being federally illegal is virtually gone and the history of the bubble in 2014 serves as another motivating factor to buy up these stocks in 2016 so one doesn't miss out on the monster returns that MJ stock bubbles create
The only factor that favors 2014 over 2016 is the float size, which is a huge factor -- and that is why I can't be absolutely certain -- but I am reasonably sure that GRNH approaches the $1 level and has a very realistic chance at taking out its old highs of $1.20 this fall
