New Mailbag

This article originally was published here: https://www.greenchipstocks.com/articles/new-mailbag/93148

The market is getting slaughtered today.

As I write this, the Dow is down in excess of 900 points. And there’s likely more to come. Interestingly, cannabis stocks are holding up pretty well, considering. We’ll see how they perform throughout the week, but perhaps we are finally getting close to some much-needed stabilization.

I know some of you have been eager for me to issue new buy alerts, but as you can imagine, I’m still hesitant to make any sudden moves. But I’m definitely seeing the light at the end of this very long tunnel.

I’m working on a couple of new reports right now, and I’m hoping to get them over to you next week. In the meantime, I want to get to some of these mailbag questions that have been piling up.

Instead of going question by question, however, I’m just going to opine on the stocks that have been mentioned in these mailbag requests.

Let’s get to it …

Green Organic Dutchman (TSX: TGOD)

I like the Green Organic Dutchman. In fact, it was a pre-IPO pick in our sister service, Private Intel. We were fortunate to get pre-IPO shares at $0.50.

The company was the first cannabis player to focus solely on organic production. It’s done a good job at growing revenues, has plenty of cash, very little debt, and management is solid. I also like that the company is growing outside of Canada as well, into Jamaica, Denmark, Poland, and Mexico. If you’re looking for a long-term investment, and don’t mind the bumpiness in the market right now, you’ll do well with TGOD. I’ve actually been watching this one for a while, looking for a spot for Green Chip members to get in. When it dipped below $3.00, I hesitated. If it dips below $3.00 again, I may initiate a buy.

iAnthus Capital (OTCBB: ITHUF)

iAnthus, while delivering a revenue increase last quarter, also showed a sizable fall in gross margins. That being said, I expect to see those margins improve now that the MPX merger is done, and cost reductions should be realized in the next quarter or two.

Although, iAnthus has not delivered for investors this year, it remains a major player in the US market, and should rebound later this year after the broader cannabis market stabilizes a bit. iAnthus remains a buy at current levels.

Liberty Health Sciences (OTCBB: LHSIF)

Liberty Health Sciences continues to struggle. Results from last quarter didn’t help, which showed a reduction in gross profit and an increase in net loss. Still, at current levels, it remains undervalued. The company has been aggressively increasing production capacity to meet demand, and it’s still a major player in the Florida market. Sadly, I think a bigger MSO is likely to scoop them up later this year at a big discount. But even with such a discount, it should come in at a price exceeding current levels. So for now, we’ll continue to sit on it …albeit reluctantly.

Nabis Holdings / Experion (TSX-V: EXP)

What a piece of crap call this one was.

We originally jumped into Nabis because it has some pretty significant exposure to the Michigan market. It also has exposure in Washington, California, and Arizona. Although it’s the Michigan exposure that I maintain gives the company any real value.

Either way, this one has been a huge disappointment. Although if the company can deliver on Michigan as the state’s new legalization law gets closer to kicking in, it could give it the boost it needs to at least get us out of this hole. In this case, I believe it’s worth the wait. Also, pressure on the overall cannabis market hasn’t helped matters either.

Aurora Cannabis (NYSE: ACB)

I continue to stay away from some of the bigger players in the Canadian space, including Aurora, Canopy Growth Corporation, and Aphria (which I’ll opine on later in this email). That being said, since selling Aurora for a 100.6% gain, I have traded it a few times. Once in our sister publication, the Weekly Score, on which we locked in a quick 20% gain.

My main issue with Aurora is that it doesn’t produce a quality product, and it spends money like a drunken rapper on a video shoot. That being said, it’s still a major player, so on any significant dips, you could make a few bucks. But as a long-term investment, I’ll pass.

Curaleaf (OTCBB: CURLF)

Despite an amazingly stupid mistake by defying basic FDA rules regarding CBD advertising, the company remains one of the most important – and now biggest – multi-state operators in the US. The company continues to expand rapidly, has plenty of cash, and is likely to maintain its lead heading into 2020.

Curaleaf remains a buy at current levels.

Greenlane Holdings (NASDAQ: GNLN)

Although Greenlane has a sizable chunk of the CBD and cannabis accessories market, it’s also very active in the e-cigarette space. The FDA is coming down hard on these companies, and I suspect we’re going to see more individual cities and towns begin to outlaw them. This will only weigh on a company that’s also now battling a class-action lawsuit regarding its IPO. I don’t know if there’s any merit to the charges brought forth, but I don’t want to be in this thing, then have this lawsuit snowball out of control. I’ll pass.

Cansortium (OTCBB: CNTMF)

Cansortium has some decent exposure in Florida, Texas, Puerto Rico, Michigan and Pennsylvania. I actually like the Texas angle, as it does give the company first-mover advantage in a state that’s just now starting to pull back the curtain on legalization. How long that will take, however, is anyone’s guess.

I actually like Cansortium as a somewhat higher-risk play, and wouldn’t be opposed to picking some up around $1.00.

Vireo Health (OTCBB: VREOF)

What else can I say about Vireo Health except for that it’s one of the most undervalued cannabis stocks in the market. The company has footprints in Nevada, Arizona, New Mexico, Minnesota, Ohio, Pennsylvania, New York, Massachusetts, Rhode Island, Maryland, and Puerto Rico. It has plenty of cash, and very little debt. We did see a slight increase in losses last quarter, but nothing to get too concerned with, and revenues continue to increase significantly.

Truth is, I may have been too eager to jump into this one, but even with the stock currently sitting at a loss, it’s far too valuable to trivialize. This is another one that I believe we rebound quite well once the broader cannabis market stabilizes. Vireo Health remains a buy at current levels.

Pot Networks (OTCBB: POTN)

I thought I opined on this one in the past, but couldn’t find the write-up. In any event, I’m not a fan of POTN. The company has had some SEC issues in the past, the front page of its website shows all the stock information instead of information about the company itself (a huge red flag for me), and it’s way too cheap for us to consider anyway. I just don’t like these kinds of penny stocks.

Planet 13 Holdings (OTCBB: PLNHF)

Despite my concern about PLNHF relying on one location for its revenues, those revenues continue to crush it. And the company is expected to open a massive dispensary in California next year, too. If revenues just simply match what they’re doing in Vegas, this could be big.

The company is still having some issues with regulatory officials in Nevada that are now in court defending their licensing decisions, which has put a hold on some of Planet 13’s expansion plans. It’s estimated that if Planet 13’s expansion was up and running, it would be seeing more than a million dollars a month in additional revenue. I’m not sure how that’s going to shake out, but overall, it’s still a pretty solid operation. As I noted back in May, I wouldn’t be opposed to buying shares below $1.90.

TerraTech (OTCBB: TRTC)

I think a lot of folks are still holding out for a big turn-around with TerraTech. But I still don’t trust management after the dilution we’ve seen in the past. I just don’t believe management cares much about shareholder value. I’ll pass.

Golden Leaf Holdings (OTCBB: GLDFF)

I’m not a fan. These guys burn through far too much cash, it has disappointed investors for years, and at less than $0.05, it’s way too risky. I’ll pass.

Aleafia (TSX: ALEF)

Despite Aleafia getting caught up in this recent correction, I still like the company. And the company has been delivering on its goals this year.

It’s new Niagara greenhouse is completed and ready for planting. The license application for that one is being reviewed right now by Health Canada, and I see no reason for it to be denied.

The new Port Perry Outdoor grow has been fully-licensed by Health Canada, and is now operational.

Aleafia’s Phase II extraction expansion is almost completed and will allow the company to increase its ability to sell higher-margin, value-added products.

The company locked in its five-year supply agreement with Aphria, which has Aphria buying wholesale from Aleafia.

We remain bullish on Aleafia, and believe the stock is undervalued at current levels.

Aphria, Inc. (NYSE: APHA)

I got an email from one of our members asking if it’s a good time to buy Aphria, now that company posted a profit.

I’d be hesitant about that.

The truth is, most of that profit came from unrealized gains on convertible debentures. And while Aphria has certainly made great strides since last quarter, I’d be surprised if the company would be able to post such profits again next quarter. The higher this thing goes on this recent earnings announcement, the harder it could fall next quarter.

That being said, the stock probably isn’t trading far off from what would be considered a proper valuation. Still, if I were to buy some, I’d be more likely to do so below $7.00. And even that might be a bit risky. Could be some good trading opportunities here, though.

I should have another update for you later this week, so keep a look out for that.

More to come …

Jeff

What I’m reading …

Blockchain Startup Nets $2.4 Million in Public Funding to Fight Food Slavery: https://cointelegraph.com/news/blockchain-startup-nets-24-million-in-public-funding-to-fight-food-slavery

Credit Unions Won’t Be Punished For Working With Marijuana Businesses, Federal Regulator Says: https://www.marijuanamoment.net/credit-unions-wont-be-punished-for-working-with-marijuana-businesses-federal-regulator-says/

Psychedelics Can Help Patients With Depression And Anxiety, Study Finds: https://www.marijuanamoment.net/psychedelics-can-help-patients-with-depression-and-anxiety-study-finds/

This article originally was published here: https://www.greenchipstocks.com/articles/new-mailbag/93148

New Mailbag originally appeared in Green Chip Stocks. Green Chip Stocks, your personal guide to investing in green, sustainable, alternative, and renewable energy stocks.