4. Not dot-com
Despite little resemblance to the dot-com era, there are still those who perpetuate the myth (much like the anti-vaccine
movement). Over the past two years, we have discussed this many times and in far more detail than I am afforded here but succinctly, this is the conversion of a multi-billion-dollar black market. I encourage you to look up the article titled “Canadian companies dominate global marijuana trade”, written by Jacquie Miller, that appeared recently in the Ottawa Citizen to see the forecasted dwindling of the Black Market. The Ottawa Citizen advised us that there is a $35 fee to us if we provide the link to this public domain article so unfortunately you will need to look it up on your own and navigate to it.
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5. Late stage applicant strategy evolution
Our industry pioneering late stage applicant strategy from
last spring rewarded investors. However, this industry is a
vibrant ecosystem and it is time to adapt because the granting of a cultivation license no longer translates into ROI. Rather, it now tends to signal that financing is coming that will lead to dilution and a falling share price in the short term.
The key now is to time your investment based on when the sales license is likely to be granted or based on M&A suitability because the consolidation curve cannot be avoided. The recent official news release that Aurora Cannabis was acquiring MedReleaf came out on May 14th but everyone pretty much knew more than a week ago when the rumours were flying complete with a trade halt. If you owned ACB did you act then and sell your ACB shares for LEAF shares? If you did, LEAF was under $22 and ACB was over $8. 1000 shares of ACB sold at $8.14 is $8,140 which could have bought say 370 shares of LEAF. On closing, those 370 shares will convert to 1,322 shares of ACB (1 LEAF = 3.575 ACB on closing). A 32.2% gain in shares. Had you waited the official news on May 14, a gain in ACB shares over 11% was easily attainable. Please see my article on arbitrage that recently appeared on www.thedeepdive.ca.