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Cultivating A Cannabis Portfolio For A Green New Year

Cultivating A Cannabis Portfolio For A  Green New Year

The final weeks of 2020 brought a host of market-shaking headlines. However, one major headline only  received a brief moment of scrutiny before getting subsumed by news of federal stimulus and COVID-19 updates, and that was the landmark congressional vote on decriminalizing marijuana on a federal level.

Although the motion, which passed the House of Representatives along party lines, is not expected to survive a vote in the Senate, the measure still represents a monumental sea change for the domestic cannabis markets and those stocks with exposure to it.

While navigating the array of publicly-traded cannabis companies may seem like a daunting task, A.I.-enabled tools and predictive analysis like those from stock research platform VantagePoint can aid in discovering promising candidates for cannabis traders.

In fact, Cannabis is one of the 13 different specialized stock sectors that VantagePoint plans to highlight in an upcoming free demo of its predictive software. So in anticipation for what promises to be a defining year for cannabis, let’s take a look at some of the major names and events that stand to influence the fortunes of the industry.

Legalization Fuels Speculation

Obviously, the most potentially impactful x-factor for cannabis this year is the federal legalization bill currently awaiting its day in the Senate. And while the current demographics of the chamber don’t bode well for the measure, this week’s Georgia runoff elections look likely of flipping the chamber in favor of the more cannabis-friendly democratic party, which has a narrow chance of improving the odds for the bill.

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But even if the current federal legalization bill fails to find enough support in the Senate, recreational legalization on the state level, which as of 2021 now includes 15 states and the District of Columbia, still cover about one-third of the U.S. population. More than that, an additional 27 states allow for medical purchases, with only six states explicitly making cannabis illegal.

These are trends that have already helped boost investor interest in some of the industry’s biggest names. Through the final months of 2020, the three largest cannabis companies by market cap, Canopy Growth Corporation (NASDAQ: CGC), Aurora Cannabis Inc. (NASDAQ: ACB) and Curaleaf Holdings, Inc. (OTC: CURLF), each added at least 80% to their equity as these events were unfolding.

Expectation For Consolidation

However, it’s not simply the big names that are looking to the new year for new growth opportunities, as many speciality or regional growers are combining or being acquired in anticipation of a more robust U.S. cannabis market.

A recently announced merger between cultivators Aphria Inc. (NASDAQ: APHA) and Tilray, Inc. (NASDAQ: TLRY) is already on track to introduce another major market-cap player to the mix. In a recent interview with Benzinga, the two companies’ CEOs also signaled an ambition to expand their presence in the cannabis market through growth in both domestic international markets as well as in THC-infused beverages through relationships with brewers such as Anheuser-Busch InBev NV (NYSE: BUD).

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That follows a string of announced M&A through the previous year, including Cresco Labs Inc. (OTC: CRLBF) acquisition of Origin House and Jushi Holdings (OTC: JUSHF)  acquisition of Pennsylvania-based grower Vireo Health International, to name a few.

Federal legalization or now, traders should anticipate more consolidation throughout the fragmented domestic cannabis as multi-state operators look to enter state-level markets.

And while the exact course of these deals may be unclear at the moment, traders can look to VantagePoint’s predictive analysis for greater insight into the prevailing cannabis market trends.


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Posted-In: vantagepointFintech Small Cap Markets