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While at Expos and conferences, the two questions I am asked most often with respect to the Canadian Industry are:
(1) What companies would I buy stock in “now”; and
(2) How do I see the landscape unfolding given the stronger tone coming out of the current US administration with respect to enforcement combined with what appears to be a very restrictive and regulated proposed legal adult recreational market here in Canada.?
The first question is always the hardest to answer because what does it matter what stocks I would personally buy (or perhaps more relevant “not buy”)? Any bias I would have in favour/against any investment is based on my own objectives and not those of any other person. It is also a snapshot in time and may fail to include any material and relevant recent news and/or events. I will try to shape the conversation by asking questions to the person who has posed that question to me such as:
-Do you want to invest in a new and emerging industry with a future “start date” for the majority of its market? An industry that is being transformed seemingly daily including mergers and acquisitions.
-Do you want to invest in a large existing and established Licensed Producer or one of the newer LPs. Large or small, diversified or not, … or even companies that do not yet have their license but are in a late stage in the application process?
-What about ancillary companies? Holding companies? Financing companies?
-Companies headed by the “movers and shakers” or by lesser known but just as capable teams – perhaps science and medical over business credentials?
-Companies that are primarily not in this industry but have taken a position either directly or perhaps through a joint venture?
-Companies that are primarily not in this industry and with little or no revenues but have Letters of Intent (LOIs) that could lead the way to a possible future industry foothold.
-Foreign diversification and the risk that comes with it (example!).