Opinions
David Cockfield
Horizon's Medical Marijuana
HMMJ-T
COMMENT
Dec 14, 2017
Stock price when the opinion was issued
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This asset class has been down for 5 years during a long period of investor apathy. But when an asset class has been down for longer than 3 years, you start to consider it. HMMJ has US exposure where there is growing public support for legalizing canopy. Maybe start with a small position. This is a volatile sector.
He's not the best person to talk to, because he doesn't believe in them. He's seen too many people lose money. It's been a rough ride. Be really careful. At some point you're not investing, you're just gambling. As well, the reverse stock splits get hidden in the ETF price.
Just because it's been reclassified, doesn't mean it's going to get widespread rollout in the US. How far away is that, and will some of these companies even be around at the rate they're burning cash?
If you're determined, own the ETF instead of individual stocks. That way, you have sector-specific risk, but not company-specific risk. If you want a home run, pick one and pray that it works out.
The cannabis space has had time to consolidate, taking out the weaker players. The sector has been down for 5 years. There's long-term opportunity in this space following persistent negative returns. Consolidation clears the decks, though. Wait till February to see if selling has abated, following tax-loss selling at the end of last year, and maybe there will be a rebound. This is a small position in your portfolio overall.
Very dubious about the whole marijuana sector. It's an area where you can sort of put your sign up saying we are now in the marijuana business, and away you go. There are some big legitimate companies that are going to do well, but we really don't know exactly how well they are going to do. He is not sure they will be very profitable.