Monday is Back to Business

Business

The day opened with concerns over Japan’s recession and a slump in small-caps led to fluctuation of stocks on the news. However, the S&P 500 worked its way to a marginal win to close at 2,041. The G-20 summit is carrying on and showing no great concern for the growing climate change issues. Meanwhile, the continued decline in energy prices is also showing some new movement in the sector with Haliburton making the first acquisition with Baker Hughes, Inc.

Cannabis indices were relatively quiet after such a positive week in Vegas. MJIC Marijuana Index posted a gain of 0.53% and Benzinga 420 Marijuana Index ticked lower by 0.96%. We would like to see more responsiveness to these types of industry successes, so we will keep watching.

Daily Positive: This should have come out last week but Vegas was all consuming as it is. However, there was a cannabis-specific company that actually posted a net profit. Yes, it can happen in this industry. Check out American Cannabis Company, AMMJ, for more details – they are quietly running a business with great success.

Daily Negative: Last Friday was the deadline for many cannabis companies to release their quarterly reports. Several are delayed, which is not unusual and yet it is still disappointing. For many companies who did report on time, their quarters were mostly self-serving. They showed lots of dilution and little business development progress, a key sign that management is filling their pockets instead of building shareholder value.

Last week was an historic week for the cannabis industry, with events in Las Vegas posting record numbers and selling out across the board. The interest in this sector is very real and is being shown by more and more serious and well-informed investors. We hope to see this reflected in the quality of trading that goes on in the public sector.

Also, we were inspired by Ben Cohen, co-founder of Ben & Jerry’s, as his message about the bottom line reflects our own. The businesses that grow and keep in mind the importance of contributing positively through their business practices to the community, will likely see the greatest lasting power and better returns. This industry is under heavy scrutiny, as the world watches to see how it will unfold, it is critical for businesses to aim for best practices, as this will only foster a truly strong sector and a more lucrative investment landscape. If only the G-20 could follow from Ben’s example.

 

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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