By Nigam Arora
Marijuana has a bright future, but making money in marijuana is not as simple as buying a few stocks.
That is due to absurd valuations, short squeezes, pump-and-dump schemes and the prevalence of the momo (momentum) crowd in marijuana stocks. The momo crowd buys marijuana stocks because they are going up — this is not a good reason for prudent investors to buy marijuana stocks.
For those serious about making money in marijuana, there is a better tool. The tool is segmented money flows.
Since I wrote “How to potentially become a marijuana millionaire, albeit carefully,” a lot of money has been made in marijuana stocks by following money flows and ignoring company earnings. The Arora Report’s track record of success in marijuana stocks is easily verifiable. Let’s examine the current money flows with the help of a chart to help marijuana investors.
Please click here for a chart showing segmented money flows in 17 popular marijuana stocks. Please note the following:
• The popularity of individual marijuana stocks rise and falls. Moreover, new stocks become available for trading. For this reason The Arora Report periodically makes changes to the marijuana stocks that are included in the list of money flows.
• The three new stocks added are KushCo Holdings /zigman2/quotes/209165034/delayed KSHB -3.78% , Curaleaf Holdings /zigman2/quotes/205334348/delayed CURLF +11.37% and Acreage Holdings /zigman2/quotes/205165963/delayed ACRGF +5.51% . Smart money flows are negative in all three of them. However, momo crowd money flows are extremely positive in Acreage Holdings and Curaleaf Holdings. The short squeeze flows are also very positive in those two stocks.
• During the California gold rush, many gold miners went bankrupt but the merchants who supplied picks and shovels prospered. KushCo Holdings is supplying packaging, bottles and other ancillary items to the marijuana industry. Perhaps there will be a repeat of what happened during the California gold rush. For this reason, KushCo has been included in cannabis-related stocks in the list.
• Momo crowd money flows are positive in KushCo, but smart money flows are negative.
• As the chart shows, momo crowd money flows are positive in Canopy Growth /zigman2/quotes/200603886/composite CGC -0.69% . Please see “If you buy only one marijuana stock, this should be it.”
• In contrast, smart money flows are mildly negative in Aphria /zigman2/quotes/207425803/composite APHA +8.84% , Canopy Growth and Cronos.
• A producer of organic marijuana, Green Organic Dutchman Holdings /zigman2/quotes/204266798/delayed TGODF -1.57% , has been removed from the list.
• As the chart shows, momo crowd money flows are positive in Aphria, Liberty Health /zigman2/quotes/204270480/delayed LHSIF +1.65% , MedMen /zigman2/quotes/201940908/delayed MMNFF -7.89% and New Age Beverages /zigman2/quotes/200595917/composite NBEV -2.68% . Please see “What to do now if you own, or want to buy, marijuana stocks.”
• Momo crowd money flows are positive in GW Pharmaceuticals /zigman2/quotes/209686240/composite GWPH +3.35% , Scotts Miracle-Gro /zigman2/quotes/200553749/composite SMG -0.04% and Constellation Brands /zigman2/quotes/207737284/composite STZ -2.83% . Smart money flows in these stocks are negative.
• Both smart money flows and momo crowd flows are positive in Corbus Pharmaceuticals Holdings /zigman2/quotes/201549545/composite CRBP -6.77% .
• Momo crowd flows are negative in Craft Brew Alliance /zigman2/quotes/209915231/composite BREW -0.26% .
• Smart money flows in Aurora Cannabis /zigman2/quotes/210559470/composite ACB +0.50% are negative, but momo crowd money flows are positive.
• Momo crowd money flows are positive in marijuana ETF /zigman2/quotes/204332491/composite MJ 0.00% , but smart money flows are negative.