Monday Traders and Investors


U.S. equities initially followed on from Friday’s strength as investors bid up shares for most of the day. However, late day lack of buyer interest led to stocks dipping into the red at the close. Ted Cruz announced his presidential run. Existing home sales were slightly below expectations but still showed decent year-over-year gains.

Cannabis traders hit the snooze button today as volumes were slow to get going. Remember, low liquidity generally leads to wide bid/ask spreads and potentially larger changes in percentage.

Daily Positive: Interest in Canadian cannabis companies seems to be picking up. Some of the recent support can be attributed to the short term decline of the USD versus the CAD. In addition, we are seeing decent capital raises and fundamental progress for several companies to our north.

Most of the action in the space this year is largely driven by day traders. Many people are day traders and often have good intentions to participate in the market. We are not negative on day traders, so long as they are generating liquidity and not manipulating prices. However, we would like to see the space evolve and attract investors, which we understand will require better, broader investment options.

Unfortunately, 90% or more of this market is plagued with toxic financings of the past, no revenues, too much promotion, which generally does not attract investors. We are continuing to look for signs of investor interest through new entrants in the space and opportunities down the road. We believe Canadian companies have a leg up on the U.S. stocks as more and more Canadian companies have institutional ownership. U.S. investors, retail and institutional, are already taking positions in Canadian companies. It is time for the U.S. to get on board with investable options for investors.


The discussion above is provided for informational purposes only and does not constitute an offer of, or solicitation for, any investment services or products offered by the author. The author is not making any investment recommendations and the opinions above do not constitute investment advice. Reference to above indices [and companies] is based on information provided by sources the author believes to be credible. Investing in the cannabis industry, as with other industries, presents certain risks including the risk of loss on an investment.

Morgan is a Founding Partner and Managing Director of Poseidon Asset Management. He is the Chief Investor of their Cannabis Focused Fund. Morgan previously worked for a privately owned Registered Investment Adviser and earlier was at UBS Financial Services focusing on wealth management. Morgan believes in the potential of the cannabis industry and likes having an active involvement as it develops. You can follow him on Twitter @PoseidonAsset.

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