Horizon's Medical Marijuana (HMMJ.TO)

Baytex versus HMMJ. There is no correlation between these two. BTE-T looks fine technically as he thinks WTI should return back above $70 before year end. The recent breakout is positive, especially since it was basing around $3.50. He does not understand the cannabis market, so can’t render an opinion. “You can’t make an iPhone in your basement, but you can grow marijuana.” He thinks demand is already met, so he would only hold a small lot of HMMJ-T to talk about at cocktail parties.

He'd rather buy HMMJ--individual companies are too volatile. Looking ahead: the price of bud will go lower. The next stage is profitability, especially when the big banks get involved. That will be a game-changer and exciting, but this will take time.

It's the prominent cannabis ETF, but the cannabis sector is all about consolidation and swapping paper. There are a lot of unknowns and nobody is making any money. Cannabis is a gamble and he avoids it.

This ETF is better than holding any individual company as it offers better diversification including some of the smaller producers. His view that these niche sector ETFs should be viewed as a speculative holding as many of the holdings are not even showing positive earnings yet. MER is 0.75%. It is a little early to consider this as a long term holding.

He's got nothing against it. But there's already a lot of price appreciation in cannabis, like the run-up in dotcom stocks in the late-90s. The value of stocks went so far ahead that tech stocks went nowhere for 10 years. Vices do well. Don't
chase this sector. These stocks are ahead of themselves.

It is 100% speculative. You have to be ready for a bumpy ride. We saw a big M&A transaction today and you will see a lot more of them. There will be a handful of survivors. This is incredibly overvalued today. If the US went for legal weed use, it would be a game changer. Wait until it is a value play after the next recession.

Marijuana. If you are going to play the sector it is a momentum trade and the ETF is the way to go. The sector is tremendously ahead of itself and there is a lot of speculation in these stocks. We will not know for a year after it becomes legal, how these companies are going to do. You could get a lot of price volatility.

You have to remember, this ETF and the companies in it, none are making any money. Secondly, we don't know what price this is going to come out at or the distribution network. We don't know what the margins of profit are going to be. On that basis, he won't buy this. He is an investor, not a gambler. If you wouldn't take your money to a gambling casino, then don't put it in this stock.

Very dubious about the whole marijuana sector. It's an area where you can sort of put your sign up saying we are now in the marijuana business, and away you go. There are some big legitimate companies that are going to do well, but we really don't know exactly how well they are going to do. He is not sure they will be very profitable.

There is a lot of emerging names in the marijuana space. It is very tricky, because we are still in early days in the marijuana market. It’s hard to tell who is going to be the winner and who is going to be the loser, so owning the ETF is probably the right way to go. The stock can be volatile, so if you have the stomach for it and you feel it is an area you can feel confident about, you are probably better off playing this then picking an individual producer or 2.

To him, marijuana is an extremely risky industry, and can’t make heads or tails of the valuation of these companies.

This is a real industry and there will be winners and losers, but the cumulative market cap associated of these companies feels that they are beyond bubble territory now. Making incremental gains from this point forward is going to be very difficult.

It is purely based on where you think it will go in the next while but it could be a good bet. It is risky and only for the riskiest investors. There could be pull backs equal in magnitude to the run ups we have seen. There are not large blocks transacting regularly so it is a home grown retail investor interest. It is definitely a growing industry.

You get diversification. Who knows which stocks are going to be the .coms of the weed industry? There is still some downside to come in this industry.

He noticed the ETF dropped the six smaller names they owned. They are just sticking to the top ten names. They are being very actively passive in management of the fund. 6 of the remaining names are Canadian.