Cannabis Stocks Are Cheap With a Potential Catalyst

Cannabis stocks hit a 52-week low after the elections earlier this month. Why? Well, I think the answer was that traders and investors as well as the industry were shocked by the failure of Florida's voters to approve adult-use legalization. I never saw any predictions that it would fail to pass (getting 60% of voters to vote yes), but I was warning that it might not and that the state's medical cannabis market is scary. Before the election, my monthly piece at New Cannabis Ventures on the state in October pointed out the big risk the market there was facing.. After the election, I said that the Florida medical cannabis market is melting. I never predicted that it would fail, but I did point out how bad things would be if it did fail.

Well, while the Global Cannabis Stock Index posted a 52-week low, the all-time low set in October 2023 held. Here is the 5-year perspective:

So, the market has been bottoming now (hopefully!) for more than a year. I was not that excited earlier this year, especially after cannabis stocks exploded higher at the end of April, but I have gotten a lot more constructive at the lower prices, as I have conveyed on this blog, in my articles at Seeking Alpha and in the New Cannabis Ventures newsletters.

While I use my 420 Investor service that is hosted on Seeking Alpha and my articles that I publish on Seeking Alpha as well as the blog I publish there to discuss cannabis stocks primarily, I have some cannabis content here on this blog. Here are some recent posts about my views on the market of cannabis stocks:

• May 22: Perhaps It Is Time to Buy Cannabis Stocks

• June 7: Cannabis Stocks Are Priced More Correctly

• July 1: What 420 Investor Is Thinking!

• August 12: Capitalize on Cannabis

• August 25: Cannabis Stocks Are Likely Exiting a Bear Market

• September 5: A Cannabis Bull Market Is About to Start

• September 13: The Cannabis Bull Market Is Still Coming

• November 6: Cannabis Stocks Were Crushed by the Elections

  
  

So, after being very bearish, I started to get kind of sort of bullish 6 months ago. The Global Cannabis Stock Index, at 7.36 last night, is down 26% or so. At least I wasn't pounding the table! Since my last article right after the elections, the market is lower (as I had indicated in that article), as it closed at 8.64 on the day of voting. The next day, it closed at 7.49, so we are a little lower now, but we are above the 11/11 close of 7.08, and above the all-time closing low of 6.93 from more than a year ago.

Again, I share ideas very frequently and with more information at Seeking Alpha and at New Cannabis Ventures through the weekly newsletter. Here are the recent newsletter titles:

I have been contributing cannabis stock articles weekly at Seeking Alpha, and here are all of them. Seeking Alpha has been limiting how many people can freely access articles, so I have stepped up my contributions on my Seeking Alpha blog, which you can access for free! Since late October, I have shared 11 blog posts, including three weekly reviews:

If you want to buy cannabis stocks, that is your business! I don't care one way or the other. I am not a fan of stocks right now, but I do like this sector. I don't always like cannabis stocks, and I appreciate how illiquid they are. Their universe of potential buyers has been shrinking. I am excited about the end of 280E taxation, which remains on track but is not a sure thing. It will be very ugly if rescheduling fails. Cannabis stocks are very cheap but are quite risky.