As the marijuana stock market attempts to pick itself up after a difficult growing up summer period, investors are looking for potential upticks of the sector before the end of 2019.
With stocks down and a shifting sentiment the view on the short term outlook for the marijuana market has turned grim. However, a few key developments and the long-run aspect of the market itself continue to keep experts interested.
The play of the US market has also aided to some of the remaining positive position attached to this stock market.
The Investing News Network (INN) offers a look ahead at the remainder of 2019 for this sector and what investors can expect according to a variety of experts.
Cannabis market predictions: US market potential offers opportunity for struggling investors
As part of their monthly commentary to investors, the managers of the NinePoint Partners Alternative Health Fund said the sector still has a long runway despite the currently seen performance in the stock market.
“It is our view that the equity values of many of the leading names in the North American cannabis sector do not reflect the strength of the underlying businesses they represent,” Charles Taerk, president and CEO of Faircourt Asset Management, and Doug Waterson, CFO and portfolio manager with Faircourt Asset Management, wrote.
According to the duo, the addressable market in the US is a strong incentive combating the fear any investors should have over the lack of federal marijuana policy in the country.
Matthew Pallotta, equity research analyst at Echelon Wealth Partners covering US names, previously told INN he expects to see multi-state operator (MSO) firms continue to face a discount in price and valuation compared to the Canadian counterparts.
“I think the discount is probably going to close regardless once people start seeing the revenue numbers these businesses are putting up,” Pallotta told INN.
Pallotta also pointed the interest from large institutional money based in the US is only rising for cannabis. However, that interest remains on the sidelines due to the federal rules around the drug and its investment.
The team at Faircourt Asset Management had previously indicated the discount seen for MSOs compared to Canadian firms ranged between 60 percent to 70 percent averages during the spring, while in September that continued around the 40 percent to 50 percent range.
Cannabis market predictions: Are listing requirement changes on the horizon?
As an attempt to update the rulings from exchange regulators, an MSO executive held meetings with three prominent North American exchanges looking for a potential critical development in the space.
During the Canaccord US Cannabis Symposium event, Curaleaf Holdings (CSE:CURA,OTCQX:CURLF) Chairman Boris Jordan said he had met operators from the TMX Group (TSX:X) managers of the Toronto Stock Exchange (TSX) and the TSX Venture Exchange, the New York Stock Exchange and the NASDAQ.
While this specific meeting was neither confirmed nor denied by the TMX to INN, the exchange indicated it regularly looks at the evolution of marijuana policy.
Despite no confirmation for an actual rule change, it could prove interesting for investors to have these open conversations about the potential for MSOs to invade senior listing exchanges.
“I definitely think the TMX group is probably looking at it going, ‘We missed out on a tremendous amount of financings. We missed out on a tremendous amount of new issues, listings. And these are real businesses,’” Josh Mann, president of Cannabis One (CSE:CBIS), told INN.
The change in investment has led to those still bullish on the space at large to adjust their thinking exploring the marketplace.
According to Elliot Johnson, chief investment officer with Evolve Funds Group, he’s excited to add positions in undervalued names as the sector is oversold.
“The companies that lead us out of this bear market will be in a much better position to succeed in 2020,” said Johnson. “We must continue to be active and opportunistic during this period of transition for this sector.”
Johnson also manages the Evolve Marijuana Fund (TSX:SEED) and the Evolve US Marijuana ETF (NEO:USMJ).
Cannabis market predictions: Could edibles and infused items kickstart Canadian markets?
While Canada approaches the legalization of novelty infused ingestible cannabis products — including vapes and beverages — these won’t go on sale until later in December.
Investors are excited for what the entry of these product categories will have on the Canadian market sales numbers; several large-scale producers have continued to struggle establishing brands and having wide open retail options at their disposal.
Johnson told INN the legalization effect will draw some attention to the Canadian market despite the fact sales numbers won’t be posted until 2020.
Many players of marijuana industry have made their intentions clear of offering a wide array of these products, including the potential for cannabis infused beverages.
Emma Andrews, chief commercial officer of BevCanna (CSE:BEV), told INN the beverage opportunity will offer an equal starting line for all producers involved.
The executive added the Canadian market will have critical advantages to the existing US cannabis drink market; thanks to the federal legalization, it may attract new consumers to try these items.
“The quality bar is a lot higher for what we can expect out of the Canadian marketplace,” Andrews told INN.
Cannabis market predictions: Investor takeaway
As the marijuana market prepares for the last few months of the year, investors are looking for a turn on the sentiment that has affected these stocks.
The legalization of edibles in Canada and the activity of the SAFE Banking Act in the US are often pointed as natural markers for the stock market to get going again. At the same time, some experts want investors to get used to the long term operational plans rather than expect constant significant drivers.
Narbe Alexandrian, president and CEO of Canopy Rivers (TSX:RIV,OTC Pink:CNPOF), previously told INN the market is currently a great buying opportunity for investors.
“In my perspective this is an awesome buying opportunity if you truly believe this is going to be a US$50 billion industry,” he said.
Don’t forget to follow us @INN_Cannabis for real-time news updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
投资新闻网络（ INN ）为这个行业提供了2019年剩余时间的展望，投资者可以根据各种专家的预测。
作为对投资者的月度评论的一部分， NinePoint Partners Alternative Health Fund 的经理们表示，尽管股市目前表现良好，但该行业仍有很长一段路要走。
Faircourt Asset Management 总裁兼首席执行官查尔斯•泰尔克( Charles Taerk )和 Faircourt Asset Management 首席财务官兼投资组合经理道格•沃特森( Doug Waterson )写道：“我们认为，北美大麻行业许多知名企业的股本价值并不反映它们所代表的基础业务的实力。”
Echelon Wealth Partners 股票研究分析师马修•帕洛塔( Matthew Pallotta )此前对 INN 表示，他预计，与加拿大同行相比，跨国运营商( MSO )的股价和估值将继续面临折扣。
帕洛塔对 INN 表示：“我认为，无论人们何时开始看到这些企业的收入数据，折扣都可能接近尾声。”
Faircourt 资产管理公司的团队此前曾表示，与加拿大公司相比， MSO 在春季的折扣幅度在60%到70%之间，而在9月份，这一比例仍在40%到50%之间。
为了更新交易所监管机构的裁决， MSO 的一名高管与三家北美知名交易所举行了会议，寻求在这一领域的潜在关键发展。
在 Canaccord US Cannabis 座谈会期间， Curaleaf Holdings （ CSE ： CURA ， OTCQX ： CURLF ）主席 Boris Jordan 说，他会见了来自多伦多证券交易所（ TSX ： X ）和多伦多证券交易所（ TSX ）的 TMX 集团（ TMX ： X ）经理、纽约证券交易所（ TSX ）和纳斯达克（ NASDAQ ）。
尽管 TMX 没有向 INN 证实也没有否认这次具体会议，但该交易所表示，它经常关注大麻政策的演变。
尽管没有确认规则的实际变化，但对于投资者来说，让这些公开的对话来探讨 MSO 是否有可能入侵高级上市交易所，可能会是有趣的。
“我肯定认为 TMX 集团很可能正在考虑这样做，‘我们错过了大量的融资。我们错过了大量的新问题，上市。这些都是真正的业务，” CannabisOne （ CSE ： CBS ）总裁乔什•曼（ JoshMann ）对 INN 表示。
Evolve Funds Group 首席投资官埃利奥特•约翰逊( Elliot Johnson )表示，随着该行业过度扩张，他很高兴在估值偏低的公司增加头寸。
Johnson 还管理着 Evolve Marijuana Fund （ TSX ： SEED ）和 Evolve US Marijuana ETF （ NEO ： USMJ ）。
约翰逊告诉 INN ，尽管2020年之前不会公布销售数据，但这种合法化效应将会引起一些人对加拿大市场的关注。
BevCanna （ CSE ： BEV ）首席商务官埃玛•安德鲁斯（ EmmaAndrews ）向 INN 表示，该饮料机会将为所有相关生产商提供平等的起点。
“质量标准比我们从加拿大市场的预期要高得多，”安德鲁斯告诉 INN 。
加拿大食品的合法化和美国《国家外汇管理局银行法》( SAFE Banking Act )的实施，往往被视为股市重启的自然标志。与此同时，一些专家希望投资者习惯于长期运营计划，而不是期待持续的重要驱动因素。
Canopy Rivers （ TSX ： RIV ，非处方药（OTC） Pink ： CNPOF ）总裁兼首席执行官 Narbe Alexandrian 此前告诉 INN ，目前市场对投资者来说是一个巨大的购买机会。
证券披露：我， Bryan McGovern ，不持有本文中提到的任何公司的直接投资权益。