Friday Trends and Month Ends

insys

“The trend is your friend”

Today was a continuation for many of the recent trends: equity volatility, U.S. dollar rallying and bonds rallying. Investors are not feeling all that great about 2015 after a frustrating month. Stocks ended very weak with the S&P 500 declining by 1.30% to 1,995. It was also a light day today for cannabis.

Daily Positive: First month of the new year is in the books!

Daily Negative: Cannabis stocks traded poorly today. Fridays are generally plagued by poor volume and price weakness. Month ends exhibit similar characteristics. Today, we have the displeasure of experiencing a combo of a Friday and month end. As a consequence, cannabis stocks were weak, generally closing lower for January.

In another world of trends, we watch and examine many things that seem to really take off in this industry. One area is the technology around medical cannabis delivery. There are a few frontrunners and of course some “me too” companies jumping in, but the key question that investors ask is about the legality. Ah, the joys of investing in cannabis. Something that seems like a good idea in one market is totally unviable in the next.

In California, the legality can vary from town to town. However, the need for medical patients to easily and safely access their cannabis is legit as there is demand for this service. The other key issue around this service is the safety for drivers and patients alike. With the banks still sidestepping the industry and no clear payment alternative, this leaves cash as the only solution. How do drivers feel about carrying product and cash? Ideally, they have built out safety provisions and hopefully there is a solution around the corner.

Nonetheless, we are interested to see what’s next in this world and laud the creators of these services, who are stepping out as trailblazers willing to give it a go in the name of innovation and access.

 

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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