I do not have a background in the cannabis industry. I’m just a trader/investor that sees the value and has spent THOUSANDS of hours researching the sector (from seed to distribution, from bills to laws), and hundreds of cannabis and cannabis-related companies, both publicly traded as well as privately owned.
Four years ago I saw the same eye-opening spike across an entire industry and it of course peaked my interest. Out of around 100 publicly traded cannabis companies that I researched about 70-80% had basically identical charts for a 3-6 month period in 2012. This was the ONLY industry/commodity that had 1000-2000%+ spikes, across 3/4ths of an entire sector, in a one-two quarter period... that’s insane! Which kind of happened again in the pre-election run... and for the record, during the pre-election I was up over 300% in my entire “pot stock” portfolio (winners and losers)... im talking about tens of thousands in about 20 of my positions. And yes I held, didn’t sell and my same portfolio is still double that of what I put in, so I’m very comfortable and still smiling... I guess this is where others would like to point out how anyone trading or investing in pot stocks doesn’t know what they’re doing (sarcasm).
Out of those 100 companies, I narrowed it down to 50 worth looking into (company history, negative news, sector news, financials, charts, trends). Out of those 50, I found 25 that were the perfect balance of:
* Solid companies with health balance sheets and strong business models.
* New companies with minimal-medium risk (based on recent financials, fillings and charts).
* And finally what I like to call “lottery tickets”, money you’re willing to lose with huge upsides... like NGBL, USMJ, PHOT and VAPE. Again, I consider these “LOTTERY TICKETS”, big gambles.
I currently own/hold exactly 26 pot stocks (I was given 75,000 shares of PURA because of my position in USMJ), all of which I’m long on with the occasional purchase on the dips (lowering my cost basis)... why hold and not trade? Because there is enough data out there that shows and supports there will be four major events for the entire existing sector that will make 1000-2000% spikes in 2012 seem like child’s play... which IMO will happen within five years (possibly less) Here are the events I’m referring to:
* Deschedulization as a schedule I drug, which would allow more robust pharmaceutical testing and open the doors for phase 1-3 trials.
* Federal decriminalization for users, not dealers... just like many, many other countries have already done, most notably Portugal (they actually decriminalize ALL drugs in 2001). Unfortunately this would affect the private prison industry in this country and that’s a whole other can of worms.
* Federal legalization of MEDICAL cannabis... two words, big pharma! This would also allow MEDICAL cannabis distribution centers to deposit cash with banks, take CC’s, get loans and obviously would created a huge boom.
* Federal legislation of recreational cannabis... I don’t need to say anything, we all know what would happen then.
Unless you’re a private investor, angel investor or a private equity firm; existing OTC pot stocks are your ONLY option for investing money in the cannabis sector for when (not if) these event takes place. For the first and last time in our lifetimes we have an opportunity to capitalize on a commodity that has been in prohibition for decades.
As for OTC pot stocks in general that some people refer to as worthless penny stocks, they should look into companies like GWPH, AXIM, CBDS, OGRMF, CANN, etc., all companies well over $1.00. And just in case you’re wondering what GW Pharmaceuticals has to do with cannabis sector, they currently have in their pipeline Epidiolex (CBD) and GWP42006 (CBDV)... Epidiolex is a liquid formulation of pure plant-derived CBD as a treatment for various orphan pediatric epilepsy syndromes.
