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Nov. 9, 2018, 9:58 a.m. EST

How ‘peak good news’ for marijuana stocks may undermine investors

The resignation of anti-marijuana Attorney General Jeff Sessions may be the only good news for the near term

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By Nigam Arora


Reuters
Jeff Sessions, the former U.S. attorney general, was a strong opponent of marijuana legalization.

President Trump’s former attorney general, Jeff Sessions, was staunchly against marijuana. His forced resignation on Wednesday is good news for marijuana investors in the long run.

And good news for marijuana keeps piling up. Please see “Marijuana’s biggest win is still ahead — but investors may lose money before then.”

So should investors buy marijuana stocks with both hands today? Not so fast. Investing in marijuana is not easy. Those with less experience think all they have to do is buy a few marijuana stocks, and they will make millions. That could not be further from the truth. Please see 11 pointers given in “How to potentially become a marijuana millionaire, albeit carefully.”

Sessions’ temporary replacement is Matthew Whitaker. How does he feel about marijuana? How long will his tenure be? Will he have a contentious relationship with Congress over Mueller’s probe of Trump? He seems to be sympathetic to patients needing marijuana, but he also seems to be pro-law enforcement.

With all this in mind, is good news about marijuana at its peak for the short term? And is peak good news good or bad for marijuana stocks? Let’s examine with a chart.

Chart

Please click here for chart of money flows in 15 marijuana stocks. Please note the following:

• In investing and trading, you are competing with the smartest brains and super computers of Wall Street. If you are using free and widely available information that is available to everyone on the internet, you have no edge. Smart money knows the free information and gets ahead of it, and in the process many investors get hurt.

• Segmented money flows give you an edge.

• As the chart shows, momo crowd money flows are extremely positive in Tilray /zigman2/quotes/209129655/composite TLRY +0.35% and Aurora Cannabis /zigman2/quotes/210559470/composite ACB +2.63% .

• Smart money flows are neutral in Cronos Group /zigman2/quotes/206842762/composite CRON +9.12% , but momo crowd money flows are very positive.

• Smart money flows are extremely negative in Tilray and mildly negative in Aurora Cannabis.

• Momo crowd money flows are positive in Aphria , Canopy Growth /zigman2/quotes/200603886/composite CGC +7.74% , Liberty Health /zigman2/quotes/204270480/delayed LHSIF +3.29% and MedMen /zigman2/quotes/201940908/delayed MMNFF -14.24% .

• As the chart shows, smart money flows are neutral in New Age Beverages /zigman2/quotes/200595917/composite NBEV +5.31% and The Green Organic Dutchman Holding /zigman2/quotes/204266798/delayed TGODF +10.81% .

• Smart money flows are negative in marijuana ETF /zigman2/quotes/201854387/composite M -10.90% , GW Pharmaceuticals /zigman2/quotes/209686240/composite GWPH +1.06% , Constellation Brands /zigman2/quotes/207737284/composite STZ +3.47% and Scotts Miracle-Gro /zigman2/quotes/200553749/composite SMG +0.34% .

/zigman2/quotes/209129655/composite
US : U.S.: Nasdaq
$ 19.98
+0.07 +0.35%
Volume: 1.88M
Nov. 19, 2019 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$2.01 billion
Rev. per Employee
$62,689
loading...
/zigman2/quotes/210559470/composite
US : U.S.: NYSE
$ 2.34
+0.06 +2.63%
Volume: 56.03M
Nov. 19, 2019 6:30p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$2.41 billion
Rev. per Employee
$94,401
loading...
/zigman2/quotes/206842762/composite
US : U.S.: Nasdaq
$ 6.70
+0.56 +9.12%
Volume: 17.28M
Nov. 19, 2019 4:00p
P/E Ratio
7.63
Dividend Yield
N/A
Market Cap
$2.30 billion
Rev. per Employee
$55,248
loading...
/zigman2/quotes/200603886/composite
US : U.S.: NYSE
$ 15.32
+1.10 +7.74%
Volume: 10.35M
Nov. 19, 2019 6:30p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$5.34 billion
Rev. per Employee
$115,039
loading...
/zigman2/quotes/204270480/delayed
US : U.S.: OTC
$ 0.37
+0.01 +3.29%
Volume: 330,668
Nov. 19, 2019 3:59p
P/E Ratio
28.48
Dividend Yield
N/A
Market Cap
$127.59 million
Rev. per Employee
$71,336
loading...
/zigman2/quotes/201940908/delayed
US : U.S.: OTC
$ 0.65
-0.11 -14.24%
Volume: 4.24M
Nov. 19, 2019 3:59p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$108.25 million
Rev. per Employee
$49,729
loading...
/zigman2/quotes/200595917/composite
US : U.S.: Nasdaq
$ 2.38
+0.12 +5.31%
Volume: 1.33M
Nov. 19, 2019 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$186.58 million
Rev. per Employee
$304,998
loading...
/zigman2/quotes/204266798/delayed
US : U.S.: OTC
$ 0.55
+0.05 +10.81%
Volume: 1.92M
Nov. 19, 2019 3:59p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$151.32 million
Rev. per Employee
$8,428
loading...
/zigman2/quotes/201854387/composite
US : U.S.: NYSE
$ 15.04
-1.84 -10.90%
Volume: 48.26M
Nov. 19, 2019 6:30p
P/E Ratio
4.58
Dividend Yield
10.04%
Market Cap
$4.65 billion
Rev. per Employee
$197,992
loading...
/zigman2/quotes/209686240/composite
US : U.S.: Nasdaq
$ 103.56
+1.09 +1.06%
Volume: 659,445
Nov. 19, 2019 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$3.18 billion
Rev. per Employee
$20,686
loading...
/zigman2/quotes/207737284/composite
US : U.S.: NYSE
$ 180.96
+6.07 +3.47%
Volume: 1.67M
Nov. 19, 2019 6:30p
P/E Ratio
46.92
Dividend Yield
1.66%
Market Cap
$34.26 billion
Rev. per Employee
$842,260
loading...
/zigman2/quotes/200553749/composite
US : U.S.: NYSE
$ 102.44
+0.35 +0.34%
Volume: 474,252
Nov. 19, 2019 6:30p
P/E Ratio
12.53
Dividend Yield
2.26%
Market Cap
$5.69 billion
Rev. per Employee
$532,058
loading...
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