Beyond the Bong

OrganiGram Uplists to Nasdaq

Is American Mary Jane about to hit the road?

Maybe… at least that’s what Oregon is hoping for.

Last week the state’s Senate approved Bill 582. This would allow Oregon to work with other states to move cannabis across state lines.

As we all know, pot is still illegal at the federal level. That means interstate commerce and trafficking of weed is forbidden.

Of course, I believe that will soon change… and apparently Oregon does too, as it’s trying to get a head start on that future. The bill now heads to the state’s House for a vote.

Looking eastward… Colorado was expected to report record sales in March. As I pointed out, that was the beginning of “pot smoking season” in the U.S.

Last week we received the final tally, and sure enough…

It was a new record!

Colorado reported March marijuana sales hit $142 million. Recreational sales alone were $114.3 million, topping the previous record set in August 2018. (No surprise here since August and September mark the end of pot smoking season in the U.S.)

But Colorado wasn’t the only state to report record sales numbers last week.

Arizona said its April medical marijuana sales topped 13,079 pounds. And because it’s a medical market, almost all of that total was dried flower, the majority of which went to treat chronic pain.

So we see that the American cannabis market is booming.

Not to mention, a new bill could see the nation’s largest market explode.

Even though voters legalized adult-use in 10 states, the market isn’t as free as it first appears.

Currently, more than 50% of cities and counties have a local ban on dispensaries. This creates “cannabis deserts” where patients are forced to drive long distances to get the medicine they want.

But a new bill in California would mandate at least one dispensary in towns where voters approve it.

California Assembly Bill 1356 cleared its initial committee vote last month. Currently, it’s waiting for a scheduled vote in the state assembly’s Appropriations Committee.

If approved, it would triple the number of California dispensaries from 635 to more than 2,200.

This week, cannabis legislation will be in the spotlight on Capitol Hill. Tomorrow is the start of the National Cannabis Industry Association’s 9th Annual Cannabis Industry Lobby Days. The Secure and Fair Enforcement (SAFE) Banking Act will be the focus this year.

Plus, I’ll be hosting my Marijuana Millionaire’s Event tomorrow! Be sure to sign up and tune in to the live event to hear how I plan to lead a small group of investors to penny pot stock riches this year.

The High Five

Last week, pot stock earnings grabbed headlines.

Aurora Cannabis (NYSE: ACB), CannTrust Holdings (NYSE: CTST) and The Green Organic Dutchman (OTC: TGODF) shares rose on optimism. Meanwhile, Tilray (Nasdaq: TLRY) was once again dogged by supply issues… as I warned in last week’s Beyond the Bong.

last week's moves - line graph

This week, earnings once again take center stage…

Below are this week’s High Five, where – each Monday – I cover the five pot stocks I believe will make major moves – up or down – in the week ahead.

1) OrganiGram Holdings (OTC: OGRMF) joins the club!

It’s been a string of good news for the Canadian producer in recent weeks.

The company’s shares will begin trading on the Nasdaq tomorrow under the symbol “OGI.” This approval process took less than a month.

And it reported record revenue of CA$26.9 million for the second quarter last month.

2) 48North Cannabis Corp. (OTC: NCNNF) announced a supply agreement with Alberta Gaming, Liquor & Cannabis Commission last week for 2,460 kilograms of adult-use weed from its outdoor facility.

It’ll also supply pre-rolls and other products from its indoor operations in Brantford and Kirkland Lake.

The Canadian licensed producer will release third quarter earnings this evening after the closing bell. And it will hold its conference call tomorrow morning before the market opens.

3) Flowr Corp. (OTC: FLWPF) reported first quarter revenue of CA$1.8 million on Friday. It sold more than 211,000 grams for an average price of CA$7.70 per gram.

CEO Vinay Tolia said packaging and processing bottlenecks persisted in the quarter. But the March run rate was much closer to where the company wanted to be.

Flowr has applied to list on the Nasdaq and is currently going through the approval process.

4) Green Thumb Industries (OTC: GTBIF) began selling cannabis at its Rise Amherst dispensary last week. This is the most populous municipality in Massachusetts and is home to the Five College Consortium. So we should start to see strong sales here.

It kicked off May by opening two dispensaries in Ohio as well. It has 18 locations currently open nationwide, with licenses for 77.

Shares have struggled over the past month. But I’m looking for these to rebound. Especially as we have first quarter earnings next week.

5) SOL Global (OTC: SOLCF) entered the California market with the $137 million acquisition of Northern Emeralds and six dispensary companies that’ll operate under the One Plant brand.

SOL has been quietly and steadily building out its multistate operator (MSO) strategy. It has now anchored itself in California, Florida and Michigan.

The company intends to open five One Plant dispensaries in Florida this year, as well as convert three Michigan dispensaries and open four more in the state in 2019.

Clearly, it’s been a mixed bag for cannabis stocks recently. We don’t need to look any further than last week’s split moves on earnings.

As always, we want to compare our High Five with the industry’s benchmark

Over the past month, the Horizons Marijuana Life Sciences Index ETF (OTC: HMLSF) has traded basically flat…

line graph - the high five

Flowr Corp. and 48North have eked out positive gains. But nothing compares with the high-flying OrganiGram.

For now, Green Thumb and SOL Global have lagged.

Although this is a recent problem for U.S. pot stocks…

American MSOs have languished over the past month. But this looks to be a buying opportunity, as there’s a ton of positive legislation underway.

And there may be more on the horizon as we look toward the 2020 elections.

So look for these laggards to rebound, particularly as the MSOs start reporting earnings in the final week of May.

If you have a pot stock in mind that you’d like me to discuss here, leave the ticker symbol in the comments section.

Here’s to high returns,

Matthew