WHERE THE MJ SECTOR STANDS NOW
The emotional response that many instinctively feel when a sector gets beaten down can make one become a prisoner of the moment
A common reaction to being such a prisoner is to develop the belief that the sector is dead and will remain so indefinitely
One may even start to believe that there are no catalysts that can reignite the mania in 2018, but upon careful examination, that way of thinking is actually pretty irrational
I experienced something pretty similar in November 2016 after the sector mania ended due to the negative catalyst of Trump being elected, and even though there weren't any future catalysts in 2017, the MJ sector mania still reignited in January 2017 after a 7-week bloodbath that wiped out November and December 2016
If history repeats itself, and it's been about 7 weeks of a bloodbath since 1/4/18, the bottom in the MJ sector is literally being put in right now and the reversal will begin shortly
The difference between 2017 and 2018 is that we have many significant catalysts this year -- some are in the Spring, and even more are in the Summer
So why wouldn't the MJ sector reignite?
I think the only legitimate argument for why the sector won't reignite is if one thinks Sessions is going to launch a significant crackdown or that MJ in America is going to take a big step backwards in 2018
I don't think this is the case, and in the continued absence of any crackdown, this fear should continue to melt away as we move into the 3rd month after 1/4/18
And if you look at the actual list of catalysts below, there is a big gap between the 1st meaningful catalyst (California) in January and the 2nd/3rd in March/April of NJ and 4/20/18
We have been stuck in that "catalyst gap" in Jan/Feb after Sessions interfered with the mania so early on in January
This catalyst gap of Jan/Feb is likely a key reason why the MJ sector's recovery hasn't begun yet
There simply haven't been any other positive events since January to counteract the negative catalyst of 1/4/18 nor did I predict in the thesis that there would be in this timeframe
On my list of catalysts in the thesis, the only one I listed between California in January and NJ in March/April/May was Vermont, which I rated as insignificant with a score of "2"
If you think of the excitement/fear ratio as the sentiment metric that drives MJ stocks, I think the fear of a crackdown has gradually dropped since 1/4/18 to the point where today I would rate this fear as a 3 on a scale of 1-10
Call it medium-low
On the other hand, the excitement of California was quickly wiped out after 1/4/18 and has remained low since then as there haven't been any other positive catalysts in January or February to create excitement
So the excitement has been pretty low as well
But now as we begin trading in the month of March, when we actually look at the calendar of catalysts, there is a reason to be optimistic about March and April, and even more optimistic about May, June, July, August and September
JANUARY
California begins Rec MJ sales
FEBRUARY
NO CATALYSTS -- this caused a full 2 month catalyst gap because Sessions acted so early in January on 1/4/18
MARCH/APRIL/MAY
New Jersey passes Rec MJ through legislature
Legislation in federal funding bill due 3/23 -- the door is still open for Rec MJ to be protected
Decision on Hemp/CBD lawsuit against DEA -- this is especially huge for VATE & SIPC as this is their subsector -- this could cause a specific mania in Hemp and CBD stocks
4/20/18 -- has been a catalyst in every even-calendar year, and even in 2015, when the MJ sector was in much worse shape than it is now -- the 4/20 effect has historically caused the MJ sector to runup starting in the 2nd week of March
MAY/JUNE/JULY
Epidiolex being approved by FDA on 6/27
(Biggest direct catalyst since 1/1/14 when Colorado started sales and touched off the biggest mania to date)
Massachusetts launching Rec MJ sales on 7/1
AUGUST/SEPTEMBER
Canada passing Rec MJ legalization in August
FDA/DEA Reschedules CBD (Epidiolex) as Schedule IV
OCTOBER/NOVEMBER
November 2018 Elections
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THE 2018 MJ MANIA will reignite soon due to the number and quality of catalysts in the Spring and Summer, along with the fact that there has been no sign of any crackdown
Decreasing fear + Increasing excitement = conditions for the reignition of the mania will grow increasingly favorable as we move forward through March
Sleek
AI
