Green Thumb Industries Inc (GTBIF)

[FUNMAN]

"...we expect to be very strong and profitable growth for some of the largest MSOs as positive factors in 2020. Additionally, we expect to see more states embrace adult-use and medical cannabis through the ballot box and, increasingly, legislative action, a theme that is already playing out in just the first few weeks of the year."

An interesting recap of the week. - FUNMAN

New Cannabis Ventures,

Friends,

https://mailchi.mp/newcannabisventures/a-sudden-sharp-shift-in-sentiment-and-7-stories-from-new-cannabis-ventures?e=[UNIQID]

After a rough start to the year, cannabis stocks exploded higher this week, with the New Cannabis Ventures Global Cannabis Stock Index rallying 16.3%. We checked the last few years, and this was the best performance since the week ending 1/5/18, when the market jumped 16.6% and, the week before, 12/29/17, when it soared 20.7% as the implementation of California legalization was about to begin.

Driving the index higher was the largest Canadian LPs, with the New Cannabis Ventures Canadian LP Tier 1 Index surging 22.5% during the week. These 9 stocks, along with Sundial and Tilray, represent 27% of the broader market index. The recent low nearly matched the prior multi-year low set in November, creating the potential of a "double-bottom" that would hopefully signal the end of the downturn that began in late March:

The rally in the beaten up large LPs and other names follows two years of sharply negative returns for the sector that followed two very strong years. We have been expecting the market to bottom, but the timing has been elusive. Tuesday began with disappointing results and a diminished outlook for Aphria that only marginally hurt its price while not really impacting the stocks of its peers. After the close on Tuesday, Organigram reported number that were much stronger than expected, though many analysts quickly pointed to a large portion of the revenue coming from an unexpected and potentially difficult to repeat source, wholesale. Nevertheless, the market took off. Capping off the week, Canopy Growth delayed the roll out of beverages, and the stock rallied despite this marginal setback.

The improved sentiment extended beyond the large Canadian LPs into the broader market, with volumes accelerating and many names moving substantially higher. While the capital crunch will persist and likely weigh on the market this year, it seems as though traders and investors may be realizing that the worst is probably behind for most companies. For example, the vaping crisis appears to have played out. We continue to point to improvements in the product set as well as distribution in Canada and what we expect to be very strong and profitable growth for some of the largest MSOs as positive factors in 2020. Additionally, we expect to see more states embrace adult-use and medical cannabis through the ballot box and, increasingly, legislative action, a theme that is already playing out in just the first few weeks of the year.