After seeking to an 8-month low of $6.60 in the past week (week ending October 18), Village Farms International Inc (TSX
VFF is a cannabis grower with operations in both the US and Canada. It operates greenhouse facilities in Texas and British Columbia for year-round production. VFF owns 50% stake in Pure Sunfarms Corp., a British Columbia-based leading cannabis grower operation.
What is the story behind VFF rebound?
The spike we are seeing in VFF can be attributed to two important developments in both the US and Canada. Let’s look at them starting with Canada.
Canadians re-elected pro-cannabis government
Canada held national elections this week (October 21) that saw Justin Trudeau secure a second term as the country’s prime minister. Trudeau came to power in 2015 and his administration has been supportive to the development of cannabis industry in Canada. Last year, Canada became the first developed country to fully legalize cannabis. It is now legal to sell and buy cannabis products for both medical and recreational use. And this month, Trudeau moved to expand Canada’s cannabis market even further. From mid-December, Canadians will be able to buy more cannabis-derived products. And for cannabis companies like VFF, that means a wider market to address.
Cannabis stocks like VFF came under pressure as the Canadian election neared and Trudeau appeared looked in a tight race his Conservative rival Andrew Scheer.
Of course, Trudeau administration has already mostly opened the Canada’s cannabis industry. However, his re-election should restore investor confidence that there will be no major regulatory headwinds for cannabis companies in Canada for at least the next four years.
Bernie Sanders makes cannabis legalization a top priority
Bernie Sanders this week (October 24) released his pot legalization plan. If he becomes president, Sanders intends to legalize marijuana within his first 100 days in office. He intends to do that through executive order. What is notable in Sanders’ plan is that he views marijuana as a product that can generate tidy sums of money to develop communities.
Sanders’ pro-cannabis ideas are no doubt a major positive to VFF and other pot companies. Although pot is currently legal in more than 30 states, it remains a highly prohibited substance under federal laws. Now that is what Sanders wants to change. He wants to make cannabis legal at federal level.
The fact that marijuana is currently a prohibited substance at federal level has limited market and funding opportunities for pot companies. On the part of funding, pot companies currently have limited credit opportunities because the big banks that are federally regulated fear doing business with them lest they run afoul of federal bank regulators. However, there are currently efforts in Congress to free banks to do business with marijuana companies.
Why is Sanders’ marijuana legalization moving pot stocks? Sanders is one of the leading candidates in the race to take Democratic party presidential nomination according to the latest poll. If Sanders’ marijuana plan came out the same day polls showed him bouncing back in the presidential nomination race.
Recent development at VFF
- VFF hasn’t made major announcements that could move the stock lately. However, in May and June, the company provided updates that should be a positive to its long-term fundamentals, In May, for instance, the company announced that a joint venture that it said will allow it to expand its outdoor hemp production to Colorado. VFF is the majority partner in that joint venture with 60% stake.
- In June, VFF announced that it was repurposing one of its greenhouse facilities in Texas to take advantage of the state’s move to legalize hemp.
We think with the air clearing after Canada’s national election, a major headwind is out of the way for VFF and cannabis companies in general. VFF has bounced back and has the potential to surge much higher. We could back at the highs before we know it.
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Disclosure: We have no position in VFF and have not been compensated for this article.
Forget APHA and ACB, Buy GTBIF and TCNNF
There are a lot of misconceptions going on when it comes to US legalization. Many investors are buying Aphria (APHA) and Aurora Cannabis (ACB) hoping to bank on what’s happening in the US. However, they are Canadian Licensed Producers and have no business in the US. Investors are buying them because they trade on the major exchanges, but that is the wrong move. The correct move is to buy the US multi-state operators like Green Thumb Industries (GTBIF) and Trulieve Cannabis (TCNNF).
On Election Day voters in New Jersey, Arizona, Montana and South Dakota voted to legalize recreational marijuana. South Dakota and Mississippi voters also approved measures to legalize medical marijuana.
There’s also the prospect of a more pot-friendly White House with President-elect Joe Biden. Vice Presidential Candidate Kamala Harris said at the debate a Biden administration would decriminalize marijuana at a federal level and expunge criminal records of people with marijuana-related offenses.
Green Thumb Industries Inc. (“Green Thumb”), a national cannabis consumer packaged goods company and retailer, promotes well-being through the power of cannabis while giving back to the communities in which it serves.
Green Thumb manufactures and distributes a portfolio of branded cannabis products including Beboe, Dogwalkers, Dr. Solomon’s, incredibles, Rythm and The Feel Collection.
The company also owns and operates rapidly growing national retail cannabis stores called Rise™ and Essence. Headquartered in Chicago, Illinois, Green Thumb has 13 manufacturing facilities, licenses for 96…
What Do Investors See In Medical Marijuana Stock (OTCMKTS:MJNA)?
Medical Marijuana Stock (OTCMKTS:MJNA) has emerged as one of many investor’s favorite pot stocks in the legal cannabis universe in 2020. The stock is already up about 10% in 2020, demonstrating how investors have warmed up to the stock early on in the New Year.
Following a disastrous 2019, cannabis investors lost money but have also learned that their best bets are stocks with strong fundamentals. They are looking for companies that have positioned themselves well in the cannabis industry and have what it takes to go for the opportunities. That is why MJNA stock is catching a lot of investor attention in 2020 because of how it has positioned itself in the cannabis market.
Robust revenue growth and strong financial position have also helped put MJNA on the radar of investors hunting for quality cannabis stocks. Revenue at MJNA more than doubled from $26.5 million in 2017 to $60 million in 2018. MJNA is also not in financial distress as may be the case with other cannabis companies out there. The company finished the third quarter, the most recent reported period, with $5.5 million in cash reserves.
Moreover, MJNA has recently taken steps to expand into new international markets and invest in companies that are leaders in their segments. These prudent actions are helping lift Medical Marijuana stock as more investors learn about them.
About Medical Marijuana stock
Is Tilray Inc (NASDAQ:TLRY) A Buy Or Sell?
For Tilray Inc (NASDAQ:TLRY) and the rest of cannabis stocks, 2019 was no doubt a bad year. But 2020 is shaping up to be a promising year for the stock. To start with, Tilray stock has already gained 8.35% year-to-date. If that says anything, it shows following the broad selloff in Tilray stock last year, we’ve got to a point where sellers are giving way to buyers in the stock.
There are several catalysts that should continue driving NASDAQ:TLRY as you’re about to see. First, below is a brief profile of the company we’re discussing.
Tilray is a Canada-headquartered global cannabis company. It is engaged in activities of cannabis cultivation and processing as well as marketing and distribution of cannabis products. Tilray already has several cannabis products brands to its portfolio. It operates across five continents through subsidiaries in Canada, Australia, Germany, and Portugal.
Following the broad collapse of cannabis stocks in 2019, investors are looking for cannabis stocks that can make a positive impact on their portfolios in 2020. Tilray stands out as an attractive cannabis stock pick in 2020. Here are some of the exciting things about the company.
Tilray CEO sees a bright future for the cannabis industry
On January 25, Tilray CEO Brendan Kennedy spoke on Bloomberg. In that interview, Kennedy framed a rosy outlook for the…