Monday Big Industry

Big Industry

U.S. equities struggled for the start of the week as oil prices slipped, dragging down energy names. In the end, the markets closed nearly flat after a lift this afternoon. The S&P 500 closed out at 2,110.

Cannabis stocks were pretty quiet today. A few announcements came out about companies looking to expand their product lines. We encourage companies to adapt and respond to market demands, but always watch for “me too” or trend hopping.

Daily Positive: It was a pretty quiet Monday. Perhaps everyone had too much fun watching the Oscars.

Daily Negative: The Canadian market is digesting more news of companies being less-than-honest with their potential investors about the various aspects of their business. In the investment world, it is required and encouraged to disclose the potential risks associated with the business. Apparently, these companies were failing to share the potential downside appropriately with investors.

While we are not fortune tellers, we try to see envision and track what the market might do in the future. The entrance of other big industries into the space is likely to occur and it is just a matter of time before it does. This time, Big Tobacco has been looking at the sector.

The root of the tobacco industry has been agricultural and it was considered one of the key cash crops during the inception of this country. However, with the notoriously deleterious health effects of consuming cigarettes, we have seen this decline. There are still massive amounts of smokers, but not the same rate of the past. There are signs that they are eyeing the cannabis industry, which is not surprising. For example, their shift to the eCigarettes. Some might see as a threat to their existing lines, while others would see it as prepping to make a shift to vaping other material.

At any rate, it is good to know when these industries are looking and it is ideal to be prepared for what that means for your investments or for your business. We believe that there will be a space for the large companies and also a craft or niche market for passionate consumers. What do you think the future holds for the cannabis industry?

 

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.

Related posts

Top