Cannabis Stocks Are Priced More Correctly

I wrote on May 22nd here that perhaps it is time to buy cannabis stocks, which have been in a huge bear market since early 2021. I am not afraid to make a big call, but that was not a big call. I was not pounding the table then!

I am not pounding the table and screaming buy right now, but I do want to encourage folks to invest their time getting to know the cannabis sector.

Well, the New Cannabis Ventures Global Cannabis Stock Index, which includes currently the 29 most actively traded names, has declined by 10.5% since then. I am still not pounding the table. You can read my weekly newsletter that I published today that suggested that this is a better time to buy cannabis stocks.

Here is the action over the past three-plus years in this five-year chart. as it has declined 90% from the high:

The sector is filled with retail traders who have basically lost a lot of money and want to see new people enter the market as buyers of cannabis stocks. The sector itself is struggling - sales have been slower than expected, and the American companies still pay an outrageous tax, 280E. Again, this appears close to disappearing and will make a big difference if it does. The DEA has officially suggested that it will move cannabis from Schedule 1 to Schedule 3, which will wipe it out, if so.

Stocks overall have been performing very well this year, and I am quite cautious on large-caps, especially technology stocks. Still, I can appreciate how cannabis stocks can improve if 280E goes away even if the overall stock market weakens.

Again, I am not pounding the table yet. Do I own a single share of a cannabis stock myself? No! Why not? I have never bought a cannabis stock - it would create a conflict of interest in my view at my 420 Investor service that I offer at Seeking Alpha. So, how am I changing with my increased bullishness? Well, I have been running 420 Investor for almost 11 years now. The price has been $600 per year for quite some time. This is the first time I have mentioned this publicly, but I am raising the price on July 1st to $720 for anyone that joins. The existing customers are locked into their prices for the long-term as long as they renew.

I want to end this somewhat bullish perspective by warning again, like I did a few weeks ago, that not all cannabis stocks make sense at the current prices. I warned in that piece not to consider Canopy Growth (CGC) and Tilray Brands (TLRY) in Canada or Curaleaf (CURLF) in the U.S. There are names that make a lot more sense! There is a very popular fund, AdvisorShares Pure US Cannabis ETF (MSOS) that makes no sense to me at all for anyone that can buy over-the-counter stocks. You can read the newsletter at New Cannabis Ventures or my articles at Seeking Alpha to see them mentioned. As I have shared, I run a model portfolio at 420 Investor that is continually updated, and I offer a sub-service called The Big Picture that includes my "Top Picks" that number 6 currently.