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The first half of 2017 was a tough period for cannabis investors and this has left many concerned.
Although the first quarter was not too rough, we saw several stocks move considerably lower in the second quarter.
During the first quarter, Canadian marijuana stocks were the hottest place to invest and we continued to see interest despite the frothy valuations. Just like 2014, we saw a surge in the number of Canadian marijuana companies going public and this trend accelerated over the following months. This rapid increased led to a drop off in liquidity as firms saw its average trading volume continue to decline.
These factors, coupled with tax season (due to the large gains on licensed producers like Canopy, Aphria, Aurora, Emblem, Organigram and Cronos) enhanced this weakness and some are down more than 50% this year.
Although this weakness is concerning, it creates opportunity for investors who are selective and patient. We recommend that investors focus on companies led by a solid management team that is focused on execution and creating value for its shareholders. Investors should target companies with a proven model, a strong balance sheet, and visible growth opportunities.
We want to highlight 13 stocks on our radar as we enter the back half of 2017:
- India Globalization Capital (IGC): Up 46%
- iAnthus Capital Holdings (IAN.CN): Up 35%
- Cronos (MJN.V): Up 16%
- Aphria Inc. (APH.TO): Up 7.5%
- Lexaria Bioscience (LXRP): Up 3.9%
- Aurora Cannabis (ACB.V): Down 5.2%
- GW Pharmaceuticals (GWPH): Down 9.8%
- Canopy Growth (WEED.TO): Down 11%
- Organigram Holdings (OGI.V): Down 25%
- Invictus MD Strategies (IMH.V): Down 33%
- Canabo Medical (CMM.V): Down 48%
- MassRoots (MSRT): Down 49%
- Emblem Corp (EMC.V): Down 57%
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This report was authored by and is property of Mushroomstocks. All information and data relied upon in drafting this report is publicly available. The author believes and considers its sources to be reliable, but does not guarantee the accuracy or completeness of any information contained in this report. Any and all information, data, analyses and opinions are provided for informational purposes only and is not intended, in any manner, as investment advice. Any projections or other information generated by Mushroomstocks regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. None of the material contained in this report is intended as a solution or offer to sell or purchase a specific stock or any other investment. This report is not directed to, or intended for distribution or use by, any person or entity that is a citizen, resident or located in any municipality, state, country or other jurisdiction where the distribution, publication, availability, or use of this report is contrary to any governing law or regulation. The securities discussed in this report may not be eligible for purchase and/or sale in certain jurisdictions or by particular individuals. It is important that you check any and all governing laws and/or regulations that may be applicable in your jurisdiction. Investing in securities of issuers organized outside of the United States, including ADRs, entail certain risks. The securities of non-United States issuers may not be registered with, nor be subject to the reporting requirements of the United States Securities and Exchange Commission. Please contact a Financial Advisor for professional advice regarding any and all securities investments. This report is intended for informational purposes only
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