Are We about to See a Mass Exodus out of (the Overvalued) Canadian Pot Stocks Into Quality US Assets?

Political controversy pushed American investor dollars into Canada, but now, the situation is reversing!

When former real-estate mogul Donald Trump won the Presidency of the United States, Wall Street panicked, and for understandable reasons.

Prior to election day, a consensus among leading economists stated that a Trump administration would “tank the markets.” In contrast, volatility indices ticked down when rival Hillary Clinton appeared to lead the polls. This suggested that traders saw a Clinton-led White House providing a calming effect to the broader markets.

The opposite could be said about Trump, and when he did pull off the shock victory, the equities futures market plummeted. While the net negative impact stayed limited overall, one consequence of “The Donald’s” electoral win was a “great rotation” out of the U.S. and into foreign markets.

With more than a year in, President Trump has surprised several onlookers with his diplomatic approach towards certain hot-button issues. One of those is cannabis and its classification as a Schedule I drug.

As current trends stand, marijuana is becoming favorable again. This may likely spark a rotation back into the US of A!

 

Investors Realize Trump’s Bark is Sometimes Louder Than His Bite

It’s no surprise that President Trump ran on a populist and some would argue nationalistic ticket. What was a surprise was that he actually won on issues that most perceived were limited in scope and present relevancy.

The evidence is clear. Between the fourth quarter of 2016 and the first quarter of 2017, volume in the U.S. benchmark SPDR S&P 500 ETF Trust (NYSEARCA:SPY) declined by a massively negative margin of nearly 15%.

In the same timeframe, the main Canada-based ETF, iShares MSCI Canada Index (ETF) (NYSEARCA:EWC), witnessed a 5.6% profit. In the previous three years comparing Q4 and Q1, the EWC’s average profitability was a pitiful 3.85% loss. Moreover, the Canada Index’s volume increased by a robust 6.61%.

Of course, nothing in the markets stays constant. Recently, U.S. Attorney General Jeff Sessions stated that prosecutors won’t bother with “small marijuana cases.” That implies the Trump administration is backing off from its draconian law and order dogma.

And more recently, and also more bullishly, one of Congress’s leading proponents of marijuana law reform — Congressman Dana Rohrabacher (R-CA), a key Trump ally — announced he will soon be filing new legislation in line with the President’s pledge to support changing federal cannabis laws.

Essentially, investors are now more likely to switch back towards American cannabis companies due to their newly favorable policies.

 

MariMed Inc.

MariMed helps navigate cannabis-related companies away from the sector’s pitfalls and towards plenty of green – the revenue and profitability kind! But unlike other firms, MRMD offers an unprecedented, broad-ranging approach. Ranging from legal services, to human resource management, to a full layout and design of a cultivation facility—and most importantly owning the real estate and associated assets– there’s no challenge that MariMed can’t resolve. What we like most about MRMD’s facilities model is that they get a percentage of sales from the cultivation/ production/ dispensing operator; huge margins in that type of revenue.

On top of earning from the cannabis real estate assets of their operators/ lessors, they also license their branded consumer products KalmFusion.com and BettysEddies.com to these folks. The products are loved by consumers and MRMD receives 15%-20% of the gross sales as a licensing fee; again, huge margins.

But what is perhaps most impressive about this cannabis firm is its shares’ technical stability. Contrary to most publicly-traded cannabis/ marijuana companies, MariMed’s executive leadership approach investor dollars as a strict responsibility.

You won’t find MariMed making headlines for all the wrong reasons, and a result, we see incredible stability in MRMD stock relative to industry standards. As a prime example, MRMD gained nearly 2% on March 19, 2018, a day when the broader markets saw red due to political concerns.

If you’re looking for a reliable name in this exciting, but volatility prone sector, stop your search and consider MRMD stock!

 

Aleafia Health Inc.

While we’re likely to see a significant rotation into American cannabis companies, Aleafia Health Inc. (TSXV: ALEF, OTC: CAMDF) represents one of the few compelling Canadian plays in the purely medical marijuana sector.

Recently merging with Canabo Medical, Aleafia shares trade at a very attractive valuation. Unlike its peers, ALEF has a zero-debt balance sheet. Moreover, they’re the only vertically-integrated marijuana company in Canada, leveraging an extensive network of clinics with cultivation licenses. On top of that, Aleafia maintains the largest medical cannabis database in the country, which is highly demanded by industry professionals. Not only are they one of the revenue producing Canadian Companies, but they finished Q4 cash flow positive.

With massive expansion plans underway, ALEF is particularly enticing because, as a recently-minted security, it hasn’t received much speculation. Therefore, this is a chance to advantage a rising cannabis firm near the ground floor!

 

Innovative Industrial Properties, Inc.

It’s hard to believe that with all the public and political controversies, it was back in 1996 that California became the first state to legalize medical-use cannabis. Unfortunately, the road to progress is rarely easy or straightforward. On the flipside, California’s landmark decision helped pave the way for personal and health liberties.

Today, 29 states and the District of Columbia have authorized medicinal cannabis. Sensing the need for fostering this development, Innovative Industrial Properties, Inc. (NYSE:IIPR) is a cannabis-centric real estate firm, with a twist. Rather than owning cannabis businesses, IIPR acquires land and building used by licensed, medical-cannabis producers. The properties are then leased back to the producers under long-term, net lease agreements.

Admittedly, IIPR stock traded sideways as the markets assessed the new Trump administration. But as soon as it became clear that the White House will likely adopt a sane approach to marijuana, shares soared.

With favorable marijuana posturing from Sessions, you may expect IIPR to continue its bullish momentum!

The Cannabis Investor is always researching new trade ideas which have the makings for large market moves. Traders are urged to follow our parent outlet, The Wealthy Venture Capitalist & The Cannabis Investor, on social media (see below) to stay apprised. We are an anti-email media outlet, and as such will only be releasing our reports/ updates/ news through Twitter and Facebook, as well as newswire.

 

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This report/release/profile is a commercial advertisement and is for general information purposes only. We are engaged in the business of marketing and advertising companies for monetary compensation unless otherwise stated below. The Wealthy Venture Capitalist and its employees are not a Registered Investment Advisors, Broker Dealers or a member of any association for other research providers in any jurisdiction whatsoever and we are not qualified to give financial advice. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data. Sometimes human error can attribute to honest mistakes in reporting on issues regarding public companies and overall capital markets, and as such we are not responsible for the complete accuracy in these reports as the reader is required to verify all statements to ensure they are completely accurate. The Wealthy Venture Capitalist’s controlling parent company has been compensated $6,500 per month for 12 months by MariMed Inc. (MRMD). The Wealthy Venture Capitalist’s controlling parent company has also been compensated 325,000 restricted shares by MariMed Inc. (MRMD). The Wealthy Venture Capitalist’s controlling parent company has been compensated $17,500 per month for 12 months by Aleafia Health Inc. (ALEF). The Wealthy Venture Capitalist’s controlling parent company hold 100,000 purchase options in Aleafia Health Inc. (ALEF). The Wealthy Venture Capitalist encourages readers and investors to supplement the information in these reports with independent research and other professional advice. All information on featured companies is provided by the companies profiled through their website, news releases, and corporate filings, or is available from public sources and The Wealthy Venture Capitalist makes no representations, warranties or guarantees as to the accuracy or completeness of the disclosure by the profiled companies. The Private Securities Litigation Reform Act of 1995 provides investors a ‘safe harbor’ in regard to forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance are not statements of historical fact may be “forward looking statements”. Forward looking statements are based on expectations, estimates, and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this action may be identified through use of words such as “projects,” “foresee,” “expects,” “will,” “anticipates,” “estimates,” “believes,” “understands,” or that by statements indicating certain actions “may,” “could,” or “might” occur. Understand there is no guarantee past performance will be indicative of future results. Past Performance is based on the security’s previous day closing price and the high of day price during our promotional coverage. Readers must visit our website at www.wealthyventurecapitalist.com in order to view our entire disclaimer which covers most of the risks, biases and liability releases to have a full understanding after reading this article.

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