Monolithic Trading

[TheMonolith]

The Next Cannabis Mania Phase

While the U.S. cannabis market is many multiples of Canada, it's been Canada where the major market gains have been seen. That's obviously been driven by clear legislation from the Federal level. The next phase of Canada's cannabis legislation is oils. It will likely be legal this October to January 2020.

As we saw with Bill C-45, the monster run came 1 year before passing and lasted 3 months, with another wave the 3 months leading into the official day of legalization.

Oils are roughly 8-10 months out from being legal, and are going to be front and center in the spotlight over the next several weeks.

The cannabis pie by use, especially looking at mature markets like Colorado, is rapidly being taken over by oil in the use of vape pens. The ease of use, rapid onset, conspicuousness, cool factor, etc. is being rapidly adopted. There's been several years now of use by early adopters, but mass adoption is now underway. Kids today don't care much for flower. Older users, who still love flower most, are now seeing that the oil vape pen is something they should have in their tool chest.

Until now, investors have not had the ability to participate, in a very direct way, in this sub-sector of the market. With Federal legislation now within reach, several companies now have licenses, and the first major deals are now being signed, the TIME IS NOW.

Not only is the time now, the beauty of oil is that it's a great spot to focus on the value chain. They have much smaller risk than LPs, and better margins.

I believe we will see an amazing run in the extraction/oil companies in Canada over the next few months.

I've not analyzed the companies in-depth yet, but my first impression is that MLCPF/LABS.V is the best one.

MLCPF/LABS.V- Great management pedigree(key.) Executing well, see management pedigree. Monster December revenues out of the gate, and transformational/landmark deal was announced this past week. They are setup for exporting oils, have a new facility in Australia coming online, have over $1B in annual revenue capacity, soon to probably be $2B.

VGWCF/VGW.CA - Management looks good, but not great. Same capacity as Medipharm. Interesting partnership with Thermo Fisher Scientific. Supply agreements with major LPs in place.

RDDTF- Aurora is in bed with them and they may have a very special process.

NEPT- I haven't looked at it yet.

I believe there is at least one more, but still researching.

Major risk is the legislative process and possibility the cannabis market could see a significant correction. Otherwise, I believe a company like MLCPF could see 200-300% from here.