My Mixed Views on Cannabis Stocks

I have been following the cannabis sector since 2013, when I launched 420 Investor in August of that year. It has had its ups and its downs. This down is very bad (and long-lasting!).

When will it end? I have been very cautious about predicting when it might end, and it may never end. What I have shared abundantly is the big challenge the industry faces in the U.S. with 280E taxation. One thing that I have learned is that we can't invest based upon expectations of a change by the government.

At 420 Investor, I cover 19 stocks very closely, though I do follow more. I write weekly for Seeking Alpha, and there are still some articles where I "rated" a company that our out there after a very long time. As much as I like Seeking Alpha, the company does not let its authors change ratings without a new article.

Here is a list of my recent ratings on companies with recent articles:

As I said above, there are some old articles that have my ratings on them. Before I discuss the current ones, I want to let you know my views on the old ones. First, my last articles on Hydrofarm (HYFM) in January 2024 and Planet 13 (PLNH) from August 2024 were strong Buys. I cover HYFM, but I do not like it at all. I like PLNH and hold a position in my model portfolio (5%), though it is NOT a Strong Buy.

On the Buy list, there is an old article on Cannabist (CBSTF), Cronos Group (CRON) and SHF Holdings (SHFS). I no longer follow CBSTF or SHFS, but I kind of like CRON, which is 8% of my model portfolio (lots of cash, Altria controls the company).

Okay, hitting the current list of names where I recently published, I will weigh in one by one:

STRONG BUY

• IIPR: I last published on 8/10, when Innovative Industrial Properties (IIPR) was near $47. I still like it and have a 15% position in the 420 Investor model portfolio

• MAPS: I love it, last publishing on 8/23. My position size in WM Technology (MAPS), which seems very cheap and not that risky, is 20%.

Buy

• GTBIF: I upgraded Green Thumb Industries (GTBIF) from Sell to Hold in August and then to Buy in October. My position size in the model portfolio is 6%.

Hold

• AAWH: I just downgraded a very old Strong Buy this week.

• CRLBF: I downgraded this one in late August.

• GRWG: I hated the stock and then loved GrowGeneration (GRWG), but I downgraded it to Hold in August.

• OGI: I have loved Organigram (OGI) for a long time, but the price got too high in my view, and I downgraded it September. I do own a 5% position.

• VRNOF: Verano Holdings (VRNOF) is cheap for a large MSO, but I downgraded it in August. I do own a 4% position.

Sell

• RYM: I don't cover RYTHM, Inc. at 420 Investor, but it is in the Global Cannabis Stock Index. I explained at Seeking Alpha a month ago why I don't like it.

• SNDL: Same! I explained why I don't like it in September too.

• TSNDF - I have followed TerrAscend (TSNDF) for a long time, and there is a lot to like. In August, I downgraded it to Sell as I upgraded GTBIF to Hold

• VFF: This is another one that I loved, but wow has it rallied! It keeps going up, but I downgraded it to Sell in mid-August.

Strong Sell

• CGC - I last wrote about it in June, but I still don't like it despite the lower price.

• CURLF - I last wrote about it at a lower price in mid-August but still don't like it.

• TCNNF - The one above is scarier, but this one is scary too, as I explained last in April.

• TLRY - What bad timing my article was, but I downgraded it from Sell to Strong Sell in late September.

This is what I think about this list right now. If you check the math, my positions add up to only 50%. Add in CRON and PLNH, and it rises to 63%. There is another stock that is 18%. This adds up to 81%, but adding them up by their full amounts is actually 82%. The other 18% is in cash. Again, I am very cautious for now. I do have some ratings on non-cannabis stocks too.