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Cannabis Stocks Are Crashing: 3 Pot Stocks on Sale

A recent tumble in marijuana stocks may offer a great buy opportunity.

Marijuana stocks’ sky-high valuations have been coming back to earth in 2019 on worry that Canada’s legal, adult-use market sales are stalling and fervor over growing legalization in the United States is overdone. The tumble in marijuana market caps, however, could offer growth investors a second-chance opportunity to pick up pot stocks at bargain prices. There are a lot of pot stocks you can choose to buy on this dip, but I think HEXO Corp. (NYSE:HEXO) , CannTrust Holdings (OTC:CNTTQ) , and OrganiGram Holdings (NASDAQ:OGI) may offer the best bang for your investment buck.

This pot stock has big plans

Canada’s marijuana market is valued at an estimated 6 billion Canadian dollars per year. The prospect of shifting those sales to legal, regulated companies rightfully has a lot of investors excited, but the total dollar potential to marijuana companies could be much bigger. Why? Because most of Canada’s illegal marijuana market is for dried flower, not value-added products like oils, edibles, and other consumer products such as beverages and lotions.

Image source: Getty Images.

Recognizing there’s a lot of potential profit in marketing finished products that use marijuana as an ingredient, HEXO has taken steps to position itself as a major player in what could be the next big driver of demand.

In August 2018, HEXO inked a joint venture with beer giant Molson Coors Brewing to create cannabis-infused beverages. That company, Truss, is already deep into developing products that could hit the Canadian market as soon as the end of 2019, if regulators cooperate.

HEXO is also putting in place a U.S. consumer goods strategy that seeks to take advantage of December’s passage of the U.S. Farm Bill, which removed hemp — a strain of cannabis sativa — from the controlled substances list. The move clears the way toward enabling companies to market products consisting of hemp-derived cannabidiol (CBD), a chemical cannabinoid found in marijuana and hemp that’s associated with wellness.

HEXO’s management recently disclosed its inked supply agreements that provide the company with 260,000 kilograms of hemp through 2020. Its goal? To extract CBD from it for use in products that it can sell in up to eight U.S. states as early as next year.

The possibility of new products on the horizon is exciting, especially since HEXO’s guidance already calls for significant revenue growth, in part because of additional marijuana grow capacity that’s coming on line. The company’s annual marijuana capacity is currently about 9,800 kilograms, but investments have it on track to reach annualized production of 150,000 kilograms. The increase in production prompted management to set a goal of CA$400 million in sales in fiscal 2020 (12 months ending July 2020).

A big, beat-up bargain with lots of risk

CannTrust has been a disaster stock for investors this year, and it’s arguably the riskiest pot stock with the greatest potential reward from here. Let’s begin by listing all the bad news that’s derailed this company this year:

  • March 28, 2019: Reported quarterly results shy of industry watchers’ predictions.
  • April 22, 2019: Diluted existing investors by announcing a $200 million stock offering (which went off at a disappointing price on May 2).
  • May 14, 2019: Reported quarterly results showing little sequential revenue growth.
  • July 3, 2019: Ratcheted back expectations for outdoor marijuana grow production from up to 75,000 kilos in 2019 to 0 to 15,000 kilos because it had yet to receive a license for its newly acquired acreage.
  • July 8, 2019: Reported it had grown cannabis in five unlicensed rooms from October 2018 to March 2019, resulting in the halting of sales on over 12,000 kilograms of product.
  • July 12, 2019: Suspends all sales and shipments pending regulatory review of its noncompliance.

Needless to say, investors can’t be blamed for souring on CannTrust given that onslaught. There’s undeniably no telling how this shakes out, but it’s not out of the question that a path emerges that allows CannTrust to get back to business, rewarding investors in the process.

For instance, regulators could limit their action to a fine and greater oversight, rather than a revoking of CannTrust’s license. Couple such an outcome with the resignation of the company’s CEO — a must in my view — and a healing process with shareholders could begin.

There’s plenty of potential if — and this is a big if — this best-case scenario plays out. CannTrust’s current expansions could result in annualized production of 50,000 kilos in Q3, and if it finally gets its acreage licensed, outdoor growing could increase production to 200,000 kilos in 2020, making CannTrust one of the largest second-tier Canadian growers.

Nevertheless, it could be an even bigger disaster if a regulatory verdict doesn’t go CannTrust’s way. Since we don’t know what’s going to happen, only those who can withstand a complete loss should probably consider buying this one off the clearance rack.

IMAGE SOURCE: GETTY IMAGES.

Potentially the top pot stock

A three-tier grow system allows OrganiGram to produce a lot of high-quality marijuana indoors on the cheap, and that may make it the most attractive beat-up pot stock to buy on this list.

Last quarter, OrganiGram’s net revenue jumped 620% year over year to CA$24.75 million, and over the past nine months its sales were CA$64.1 million. Its quarterly sales performance was driven by a sharp increase in kilograms sold to 4,615 kilos that only hints at the potential revenue associated with its planned increases in production.

OrganiGram’s current annual production capacity is 61,000 kilos following it securing licenses for its phase 4A expansion last month. It’s already in the process of filing rooms from its phase 4B expansion for approval, and if licenses are granted, that would add another 28,000 kilos of production per year. Finally, it’s targeting the filing of its phase 4C rooms for approval by year’s end, which would increase total production to 113,000 kilos if regulators give them a green light.

That’s a substantial increase that could allow the company to make big headway toward profitability. OrganiGram’s gross margin dipped because of lower yields associated with a pilot grow program that didn’t pan out last quarter, but management expects margin to return to industry-leading levels. For perspective, before dipping to 50% last quarter, its gross margin was 60% two quarters ago, which was miles higher than many of its peers.

If OrganiGram can hold the line on its expenses and its yields recover to where they were before its failed pilot program, then a substantial increase in sales resulting from its production capacity growth could position it perfectly for best-in-class operating margin someday, making it my favorite of the three to buy on sale.

A recent tumble in marijuana stocks may offer a great buy opportunity.

Cannabis Lots – Legit 1000% Gains or Scam?

Tom Gentile of Cannabis Power Trader

Looking for reviews of Cannabis Lots ?

Wondering what the Cannabis Lots website is really all about?

I recently received an email about “Cannabis Lots” which is a video from journalist John Burke that reveals an investment into Cannabis stocks that can make as much as 1000% returns.

Below you can find my honest review of Cannabis Lots and discover what this is really all about.

Before I start…

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It’s helped me earn over $300,000 in the last 12 months alone:

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Cannabis Lots Review

Here is what I’ll cover inside this review:

Table of Contents

  • 1 Cannabis Lots Review
    • 1.1 What Is Cannabis Lots?
    • 1.2 Who Is Tom Gentile?
    • 1.3 How Does Cannabis Lots Work?
    • 1.4 Is Cannabis Lots A Scam?
    • 1.5 Pros of Cannabis Lots
    • 1.6 Cons of Cannabis Lots
  • 2 Verdict For Cannabis Lots
    • 2.1 Before you leave

What Is Cannabis Lots?

Cannabis Lots is an investment opportunity that Tom Gentile says presents people with the chance to make $20,000 or more every week.

I’ve reviewed a lot of similar programs lately including others from Tom Gentile like his Alpha-9 Trader.

I’ve also shared reviews of numerous cannabis investment services like Pot Stocks Entering “Acceleration Phase” and No.1 Marijuana Stock For 2019.

The Cannabis Lots video is presented by journalist John Burke however it promotes an investment newsletter called Cannabis Power Trader.

Tom Gentile claims to have found a loophole that can allow investors to make a lot of money in the Cannabis industry.

The Marijuana industry is growing very fast.

As medical marijuana legalization gains traction in the US as well as other countries, we are witnessing unprecedented growth; growth that presents investors with a rare opportunity.

Acknowledging this, Tom assembled a team of data scientists to develop a formula that can unlock the riches in the cannabis industry.

They came up with an algorithm that can read the patterns that he uses to find cannabis lots with a 90% win rate.

He says that with this system, you need a mere 10 minutes every day to double, triple, or quadruple your stake.

Moreover, you do not need a lot of money to get started; you can do with as low as $100.

Every week, he promises to send new, low-risk recommendations when you join Cannabis Power Trader (more on this below).

Who Is Tom Gentile?

Tom Gentile – Image credit: source

Tom Gentile is known as America’s number one pattern trader.

He has spent much of his career developing trading algorithms that read the markets and come up with patterns that help him spot hidden, lucrative investment opportunities.

He began his career in the finance industry in 1986.

In 1993, he helped found Optionetics, a company that trained investors in options trading.

After selling the company, he continued to teach investors how to trade options as well as spot profitable opportunities.

He joined Money Map Press for whom he runs investment newsletters like Fast Fortune Club, Weekly Money Call, among others.

How Does Cannabis Lots Work?

To join Cannabis Power Trader, you have to pay the annual subscription fee of $2,450. And in doing so, you are entitled to the following:

    • Weekly Cannabis Lot Alerts: An alert is an email that contains a full analysis of all the trending investment opportunities as well as the prices you should enter or exit them for. It also comes with the expected exit parameters.
    • Weekly Cannabis Lot Videos: In these weekly training videos, Tom lets you look over his shoulder as he places his trades. If you are a newbie, these videos will show you how trading works, live.

  • Cannabis Lot Profit Alerts: When you receive this alert, it means that it’s time to sell and cash in. It also comes with easy-to-follow instructions as well as specific sale details .
  • Cannabis Lot Masterclass: It is a series of videos in which Tom lays down the strategies behind Cannabis Lots. He explains the tricks he uses to beat the markets and outperform Wall Street analysts.
  • Cannabis Trader network: The trader network is a forum in which you get to meet other like-minded cannabis investors who are also subscribers to Cannabis Lots. In this forum, you talk to the other members and learn from them.
  • The Cannabis Trader Mastermind: It is a webinar in which Tom invites all members to hold discussions that center on making money from cannabis.
  • National Institute for Cannabis Investors (NICI) 2020 Retreat : As a member of Cannabis Lots, you will receive a free invite to the annual retreat. Here, you will meet the people run the industry so that you can learn from them and perhaps learn how you will mold your strategy.
  • NICI app: This app grants you unfettered access to your Cannabis Power Trader account. It has everything else you find on this list; alerts, video presentations, tutorials, model portfolios, you name it.
  • NICI hotline: You can reach the customer support team and ask any questions regarding your subscription.

Tom promises to deliver at least 12 opportunities that will give you 1,000% returns each.

If he doesn’t, you will receive an extra year of membership free of charge.

Is Cannabis Lots A Scam?

Cannabis Lots is not a scam.

Tom Gentile has been involved with the finance industry for decades.

He has earned the respect of his peers and has even been asked to share his insights on popular business programs.

With that sort of record, I think that he has enough credibility to run a genuine service.

It may not make you a fortune but it will put you in a better financial position.

Pros of Cannabis Lots

  • There is a low barrier to entry. You do not need much to get started; even $100 will suffice.
  • The profit margins are higher than what you’d get trading stock.
  • Lower risk. You typically keep a position open for about 24 hours before closing it and moving on to the next one. This strategy minimizes exposure.

Cons of Cannabis Lots

  • Limited membership. They have only opened the doors to around 600 new members.

Verdict For Cannabis Lots

The Cannabis market is one of the fastest-growing industries in the world today.

For the past few months, it has grown by an estimated $4 Billion and can only get better if legalization kicks in.

With shrewd investments, you can tap into this growth and set yourself up for financial success.

Although you may not make as much money as he says you will, you will be better off with his advice.

Before you leave

If you’re tired of scams and want a real solution for making money online check out my no.1 recommendation.

It’s helped me earn over $300,000 in the last 12 months alone:

(This is a 100% free training)

Looking for reviews of Cannabis Lots? Wondering whether Tom Gentile's Cannabis Lots can really deliver 1000% gains? Read my honest review and get the truth! ]]>