Canopy Growth Corp. (WEED.TO)

All the weed stocks are short for the next while. The sector is priced for perfection 10 years from now. There are really no earnings in the sector.

These stocks had run up a tremendous amount. The valuation is insane. A lot of speculation in this space. The corporate governance in this space is not strong. For any investors that have made money in this space, should be taking profits now. It’s likely natural that they will pull back now that is legalized. He does not own companies in this space.

Canopy Growth (WEED-T) vs Aurora Cannabis (ACB-T) The battle of the titans. Both companies do good things. He favors Canopy as it has a lower risk diversified growth strategy in 12 different facilities. He also likes the deal with Constellation for further diversification. Aurora is expected to grow with the expansion of the new facility near Edmonton, but he wonders if the growth will be staged and may be slower than people expect. Canopy also has an advantage given its size of existing product inventory.

(A Top Pick Oct 12/17, Up 386%) You have to have this if you are going to play the broad based industry.

He's avoided the weed space, because cannabis producers--being commodity producers--have very low profit margins. This is a gold rush now. Some companies will survive, but some won't. There are legalization challenges, especially about edibles. Canopy will survive, because Constellatioon Brands is its major backer, but doubts it can maintain its stock levels. Right now, cannabis is a total crap shoot, though Canopy is one of the strongest of the pack.

Trend of higher highs, higher lows. Trend is in your favour. Broader markets reaching all-time highs. Positive risk sentiment is touching all the riskier asset classes, and as long as it remains, it’s away to the races.

As a trader, he would have sold it already. For others, maybe sell half. There's been a lot ot hype as reflected in its sharp rise recently. Treat yourself and sell some of this now.

The go-to cannabis name. Doesn't like the valuation. Shook his head with how much Constellation paid. But he finally bought this last week. He won't hold it long. Eventually, earnings will have to support the stock. Eventually, this will be a short story.

He hasn’t participated on this. He just can’t get around over the valuations. Too many things have to go right to justify the valuation. (Analysts’ price target is $48.64)

He doesn't know how to value weed stocks, but most of them don't make or lose money. We're still in the early days of cannabis: who will be the winners and losers? He can't say. A value investor can't look at these companies and determine where they'll be in 5 years. As a momentum or growth trader, you can play the ETFs or stocks, but he doesn't do this. He's a value player and doesn't see much value here. You can trade them short-term though.