# Marijuana ETF - HMMJ



## james4beach

This Horizons ETF (HMMJ) launched yesterday and is the first marijuana ETF in the world! It holds mostly Canadian marijuana related stocks, capped at 10% each. Thoughts?

The fact it's a new sector is intriguing, I'll admit, though all the stocks in it are very high risk. I'm tempted to buy 100 shares as a lottery ticket, purely as a ponzi/bubble play in case tons of money pours into the sector and sparks a bubble.


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## james4beach

By the way, the fund is currently tiny, $26 million. I'd watch to see whether this attracts new capital. If it does, money pouring into relatively small stocks like these could drive up their prices tremendously.


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## doctrine

Don't worry about supply. Marijuana companies are raising capital about as fast as can which will keep everyone afloat in paper. The easy bubble money has been made when they all went up 300-400%. None of them have the capital to grow revenue to meet their valuations without raising more capital. These are agricultural stocks, not technology stocks. You don't get unlimited free copies of the software. More issues coming soon to a discount brokerage near you.


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## Bury

I'll agree Doctrine , it might not going to be "the sky is the limit" business - but I want to believe they are accumulating
knowledge , and hopefully very valuable one , through the medical part of it - knowledge that regular seed & plant labs 
in the us and most of the rest of the world (except maybe Holland & Israel ) can not have any access to. Thats why I'm
a buyer - but no, etf is not for me.


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## jargey3000

james4beach said:


> By the way, the fund is currently tiny, $26 million. I'd watch to see whether this attracts new capital. If it does, money pouring into relatively small stocks like these could drive up their prices tremendously.


'Bout time! didn't i mention someone should start one? in a previous post? or was I hallucinating - again?
sooo...... it looks like others have put in about $25 million...in addition to my initial investment, eh?


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## james4beach

The fund is up to $38 million now, so it went from $10 million to $38 million of assets in just a couple days of trading.

Like I said... if tons of money start flowing into this sector, it could be a real crazy bubble. I'm thinking of playing this as a lottery ticket, just in case a billion $ of greed flows in from around the world and creates an enormous bubble.


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## jargey3000

james4beach said:


> The fund is up to $38 million now, so it went from $10 million to $38 million of assets in just a couple days of trading.
> 
> Like I said... if tons of money start flowing into this sector, it could be a real crazy bubble. I'm thinking of playing this as a lottery ticket, just in case a billion $ of greed flows in from around the world and creates an enormous bubble.


..uh yeah.... but the ETF price would have to rise also, no? in addition to the greed factor?


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## jargey3000

I see they had a nice big ad on the front page of the forum, wheni signed in today.
anyone else notice that?


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## james4beach

I haven't seen any ads for HMMJ.


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## Fraser19

I have been looking into this since I saw this thread.
Overall I don't think playing the marijuana sector by individual stocks is for me. But in an ETF that could work, I have looks at the ETF's holdings and some of the larger US companies may provided reasonable downside protection, while the smaller ones may provide more upside potential. 

I will be watching this one closely over the next few weeks.


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## james4beach

I also like the idea of doing this with an ETF. I would not buy the individual stocks.

This is somewhat like a pharma stock ETF and it's probably going to be damned volatile. If the bubble circumstances are right, it could run up 3x or 6x in value and share price. But join the party late and it could probably tank 90%.

I think the potential upside is greater than the downside. I could see $100 in HMMJ turning into $10 (if bubble bursts) or into $600 (bubble continues).


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## james4beach

The main thing I'm going to watch is the rate of inflows (new capital) into the ETF.

The current $38 million AUM is very impressive for a brand new Canadian ETF. Consider that iShares has 14 funds with less AUM and some of them have been around for nine years!


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## Oldroe

By the time you are done watching it will be over.

The good news you are right this time. You already missed the money let it go.


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## Tetsujin

I hold stocks from MJ Canadian companies since they were under $1 and that are listed in the ETF. It has been extremely volatile, but since it didn't go down so much. Right now some are shorting and spamming, pumping and dumping in some forums, but it is sure that the future is not clear since PM stated that the legalization will be done on 2018. However if you check all holdings in the ETF you can see consolidated MJ companies from US like Insys that it went down from $44 to $9-10. In some moment this can go high again. 

These are the companies in the ETF http://www.horizonsetfs.com/horizons/media/pdfs/productsheets/HMMJ-Product-Sheet.pdf 

Maybe when recreational MJ is legalized this ETF could include them and change its name or another ETF could be created.


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## Tetsujin

Btw, the starting price of $10 and $11.45 as of today, it was so high and risky to buy more than a board lot since I already have more shares individually, I started to buy just 200 shares of the ETF last week. Maybe this can go high in the midterm.


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## james4beach

One million shares traded today. This is unheard of for a new Canadian ETF.


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## james4beach

Given the volume on this today, I suspect that Net Assets have swelled to over $50 million at this point. We'll see once the web site is updated. This ETF is looking like a huge win for Horizon.


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## Oldroe

go with your instincts then run a 10 year back check against Canadian banks.


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## doctrine

Insider selling is spiking. Not a great sign, but don't let that stop anyone from investing, I'm sure it's just for personal reasons. 

A lot of friends and acquaintances are asking me about marijuana stocks. Some of them don't even have an RRSP but want to buy in, and probably will. Sigh.


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## james4beach

james4beach said:


> Given the volume on this today, I suspect that Net Assets have swelled to over $50 million at this point. We'll see once the web site is updated. This ETF is looking like a huge win for Horizon.


It's now at $62 million assets. This four day old ETF is now larger than 26 iShares ETFs, including: XID (India Index), XIT (the 16 year old tech index), XCH (China index)

Isn't that crazy? XIT, the tech sector ETF that was created in 2001, is smaller than the four day old HMMJ


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## Oldroe

A lot of old dope smokers have money they are just bad investors.


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## doctrine

Don't worry, today's growth in HMMJ was honourably taken by Aphria as soaked that up with the $17.5M of convertible bonds that just went into common shares for people to buy. They also issued $40M in more in convertible bonds, which have a conversion price of $3.29 which the stock was unbelievably trading above for almost 15 minutes this morning, before it tanked by over a whopping 23% in minutes. All this from a company which has issued $132M of equity in the last 9 months, and had $1M of EBITDA in the last quarter and a market capitalization in excess of $1B and trades on the most reputable stock market in the country. Aphria's last offering was at $5.00, so I wonder how they feel about the convertible bond being callable at $4.94. To be fair, I'm not certain whether other companies raised capital today, but it seems to happen pretty often. Any warning signs here? I feel like a broken record, so I may stop complaining soon and retreat to my boring pipelines, utilities, telecoms and banks.


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## james4beach

Please don't misunderstand my excitement. These are crazy, unjustifiable valuations and insanity across the board. But if you spark that bubble psychology, the thing can really run away... I'm just saying there may be money to be made speculating on the bubble. I wouldn't invest more than 0.5% my portfolio in the sector.


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## doctrine

I get that, but hope of insanity is not a great investment strategy. You don't want to be the one left holding the bag. If anyone does get in, I would recommend setting a price at which you would get out.

http://www.theglobeandmail.com/news...al-process-for-pot-producers/article34665698/

I heard somewhere there are something like 200 applications to enter the space. And Health Canada is going to accelerate the process. Barriers to entry are being removed. It is fascinating, of course, can't wait to see how it all turns out.


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## james4beach

I would approach this acknowledging the possibility of a 90% loss.

The approach I am using is watching the fund NAV and looking at the fund flows. If it establishes a pattern that makes me think that money is steadily flowing in, then I will join with the idea of riding the bubble psychology. If on the other hand there is the initial interest but than NAV stops growing (showing that interest has exhausted) I may not touch it.


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## OnlyMyOpinion

Interesting daily opening spikes on this etf. 
Is this the effect of inexperienced (stoned?) retail investors placing market orders rather than buy limit orders?


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## jargey3000

...just don't INHALE the thing...!!


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## Oldroe

Maybe find out when national weed day is. Buy in just ahead and sell when everybody id thinking about weed.


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## zylon

jargey3000 said:


> ...just don't INHALE the thing...!!


Fer sure!
I just hope that when the smoke is legalised, the same goes for oil.

Lots of oil is available in U.S. but they won't ship to Canada; 
which is probably a good thing, as a horseman is likely to show up at the door if any oil is delivered.










*h/t* @peterjonathanna *and* @BreedersLove


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## Spudd

Canopy just launched a website called "Tweed Main Street" where you can buy medical marijuana online (with a prescription). Presumably once it goes legal for recreation this same website will sell the recreational stuff too. Anyways, the only products I could see on there were oils, so I believe they are already available here, for medical use. This seems to imply they would also be available for recreational. If I were the government I would want to encourage that, as smoking can be hazardous to one's health.


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## james4beach

I spend lots of time in Oregon & Washington states, where weed is "legal". But the fact it's still a federal crime makes a big difference. People are hesitant to buy marijuana at shops because they have to show their IDs and will be recorded. For example I would never buy weed even in these legal jurisdictions, because I could still get in federal trouble.

Truly legal marijuana in Canada is going to be much different than state-by-state legality in the US


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## james4beach

I have no position in this ETF but what a wild looking ride!
http://stockcharts.com/h-sc/ui?s=HMMJ.TO&p=D&yr=0&mn=0&dy=15&id=p28521255985

First up 20%, then down 15%... wow. I'm waiting to see how it shakes out.


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## Bort

...and everyone called me an idiot for solely focusing on this sector last summer/fall (Humblepie). Portfolio is up about 300% since last August thanks to these stocks.

Some thoughts from someone who has watched this sector day in and day out since last summer...

The easy money has been made. Now that legislation has been tabled, there are no major *known* catalysts in sight. We witnessed the usual buy the rumour, sell the news event regarding legislation. Will prices be much higher a year from now? Absolutely (assuming no major broad market pullback). However, with no major catalysts in the near term, for the first time since last summer I fully believe the stock prices will slowly bleed down over the summer.

Personally, I will be waiting for prices to settle down to more reasonable levels, and re-enter with longer term positions in a few months (probably at the end of summer). It's obvious to me that with the type of hype we've seen in this sector to date, that when legislation is actually passed and rec becomes legal sometime next year... we will see more hype than ever. So if you bought today and plan to hold for the next couple of years, I think it's a pretty safe bet prices will be much higher... however I think we will see better buying opportunities late summer/early fall.

A lot of people think that now is a better buying opportunity than ever, since legislation being introduced has somewhat derisked the industry... I'll take the opposite bet that a lot of people now have nothing to look forward to over the summer, and will seek better entry points.

James, I think we will see substantial upside over the next 15 months, with most of the movement occurring late this year (in case legislation gets passed earlier than expected, they allow mail order rec until provinces are correctly setup, etc.), and definitely next year when these companies really start bringing in the revenues.

Good luck to everyone who decides to play


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## OnlyMyOpinion

Well good work. I'd have gone through a lot of underwear over that period.

To be fair, no one actually called you an idiot, least of all Humble. Craxy like a fox is what I recall, along with some salient questions and an invitation to update us - as you just have.

I'll continue to hold a very small, token (or is it tokin') position in WEED which remains well in the green from acb. It's my only high flyer (so to speak).


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## OnlyMyOpinion

.. double post? What's this thread smoking?


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## Oldroe

I can see the Bowmanville processing plant from my house. They use to have every light on all night, now just a few likely big budget cuts.

I made my 95% and bought 200 TD couple weeks ago when it was on sale. Thanks SL.


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## james4beach

Happy 4/20 everyone!


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## mark0f0

One thing I've noticed is that the analysts are using a price of marihuana of $9/gram in their 'projections' when they do research on this sector.

This is completely unrealistic as the illicit dealers, with their overhead including the risk premium associated with the criminality of their crop, only charge $9/gram.

$3-$5/gram as a retail price is more realistic, with government taking their cut, for a wholesale pre-tax price of $2-$3/gram. 

A lot of these stocks are going to have their wings clipped big-time once actual pricing rears its ugly head. Kind of dumb that the Bay St. analysts are projecting prices similar to that of illicitly produced marihuana, for the 'legal' stuff.


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## doctrine

HMMJ is now closed below where it closed on its first day of trading. Aphria dumped $75M of shares last week. That's nearly 60% of the entire NAV of HMMJ in one day by one company - it certainly can't soak up the supply of stock.

I'm guessing the retail price will be north of $5 but not by much, demand for legal pot at black market prices will be very strong as a vast majority of people would rather pay the same to buy it legally. $7-8 is likely, especially after taxes/fees. But that could quickly be pushed down by massive oversupply, which is one of the "big 3" risks of supply (massive overproduction/dumping/competition), regulation(taxes) and barriers to entry (nil).


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## james4beach

doctrine said:


> HMMJ is now closed below where it closed on its first day of trading.


That's not what I see in the chart data. First day closed at 10.25 ish, today closed at 10.44
http://stockcharts.com/h-sc/ui?s=HMMJ.TO&p=D&yr=0&mn=0&dy=15&id=p43473877529



> Aphria dumped $75M of shares last week. That's nearly 60% of the entire NAV of HMMJ in one day by one company - it certainly can't soak up the supply of stock.


Yup, that's a lot of share issuance. Hard to tell at this point if there's enough investor demand to make this work. Managing a bubble is a delicate business... the MJ companies would be wise to not get too greedy with equity issuance, because they should want equity prices to keep rising (this trend is what fuels the bubble).

If the companies get too greedy and try to issue too many shares, they will suppress price moves in the sector and there will be no bubble momentum.

I still have no position in HMMJ and continue to watch it, assessing whether I think there's enough upward pressure/inflows for a good run-away bubble.


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## Oldroe

You can't buy a bank stock. 

How are you going to Canopy at $10 With 10 million is sale and a ton of debt and burning money like water and this is the good stock .


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## james4beach

The size of the fund has stagnated around $120 million. New money is not rushing in like I had hoped. I was hoping that a spark of greed and convenience with the ETF would start a runaway bubble price increase, but it's not happening at the moment.

I have no position.


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## james4beach

This is doing terribly. Still no bubble enthusiasm. No runaway enthusiasm and inflows.


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## doctrine

That's because this came in when prices already rose 400%. If you added up all of the planned capacity, I think you would find that it is closing in on 1 million kg of product, if not more. That would be a billion grams. Or roughly enough for 10 million Canadians to smoke up 100 times a year. I feel like that means there is already sufficient capacity for a fully developed recreational market in Canada. And plenty more capacity is coming online.


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## fstamand

I own a few of these stocks and it's showing "Non quotable security, this stock cannot be traded" with Questrade. Anyone know why?


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## Parkuser

fstamand said:


> I own a few of these stocks and it's showing "Non quotable security, this stock cannot be traded" with Questrade. Anyone know why?


Maybe because of name change? 
http://www.newswire.ca/news-release...rijuana-life-sciences-etf-hmmj-627317013.html


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## fstamand

Thank you, it's a good possibility


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## james4beach

I've been sampling and recording the fund size. Here's a graph since the fund's creation. There's an interesting recent development, assets under management is hitting new all time highs (currently around $180 million). Graph below:


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## can_84

My 2 cents:

I am an accountant by profession and have had the chance to work in multiple startups in the past 10 years. From my experience I would think the Marijuana industry is following the classical industry cycle: 
1) Start up phase
2) Growth phase 
3) Maturation Phase
4) Decline Phase

I think the Marijuana industry is currently in the start up phase where you have many small companies trying to establish and capture the market. This phase usually has very small players all spending allot of capital on R&D and marketing to encourage users beyond early adopters. I view this industry like the tabaco/alcohol industry. This industry will move through all the cycles and thus will eventually have a few companies surviving making lots of $ while many many more would go bankrupt or be bought out by the successful ones. 

I do have a bit of $ in HMMJ because I am not able to choose between the many listed companies that will survive so I took the index approach. I think by next June when the feds legalize the industry you will see more growth in this sector but I dont believe that all of the companies will go bust as there is a large demand for their product and a legitimate backing of the government. The world is becoming more open to Marijuana in a way if yes to tobacco and alcohol why not Marijuana? Like the automotive industry and the alcohol industry and many more in the past, only a handful will remain standing but if you have an Index it gives you a good chance to make $ over all. There is lots of $ to be made by the government while also taking away market share from the mafias and gangs. So my conclusion was to invest a bit in the industry early on through the HMMJ index and ride out the peaks and trough for 2 years.


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## james4beach

I agree and think it's in that early start up phase. Very high risk, and how can you reliably choose the winners and losers? I particularly like the sector index here because you will benefit from the sector growing from nothing to more-than-nothing. The same can't be said for mature sectors like banks or energy.


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## jargey3000

anyone like NINE ??????


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## Mechanic

I sold it yesterday. Missed the best days but made 30% overnight so took it. DOJA is waiting on test results.


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## jargey3000

Mechanic said:


> I sold it yesterday. Missed the best days but made 30% overnight so took it. DOJA is waiting on test results.


uh-oh...i bought NINE yesterday.....(are doja & nine connected somehow?)


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## Mechanic

Just all players in the same space, all jockeying for position and some are a little better established. I don't plan on holding them long term, as I generally buy div payers but the current surge in the weed sector is an opportunity for a bit of fun and profit. I don't put a lot of money into them and usually set a target to get out. Sometimes it gets tempting to stay in, in which case I often set a trail stop to stop my emotions from costing me.


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## james4beach

HMMJ has now exceeded the TSX return since its inception.

I have no position, but that's only because US tax issues prevent me from holding Canadian ETFs.


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## james4beach

jargey3000 said:


> uh-oh...i bought NINE yesterday.....(are doja & nine connected somehow?)


jargey, I have no idea what NINE is, but I strongly recommend holding the sector ETF instead of random stocks in this sector. If I had enough room in my RRSP, I would own a bit of HMMJ as a lottery ticket.

Backing up for a moment though I really recommend that you pursue an asset allocation strategy to have solid exposure to regular stock indices and bonds. I would only do this gambling (MJ stocks) with small amounts of money.


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## jargey3000

james4beach said:


> jargey, I have no idea what NINE is, but I strongly recommend holding the sector ETF instead of random stocks in this sector. If I had enough room in my RRSP, I would own a bit of HMMJ as a lottery ticket.
> 
> Backing up for a moment though I really recommend that you pursue an asset allocation strategy to have solid exposure to regular stock indices and bonds. I would only do this gambling (MJ stocks) with small amounts of money.


_*...exhales*_....ahhhhh...
thanks, james, man.........what is the sector ETF....????


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## james4beach

I smelled some sweet aroma on my walk back from lunch. Once pot is legalized, you'll find you can smell it everywhere in the city.

jargey, HMMJ is the sector ETF, the first marijuana sector fund in the world.

Here's a business idea, by the way (something I saw on my coffee break in Portland) -- a marijuana tour bus. They drive people around to different dispensaries throughout the city, since many people are new to this and have never been to one. They will show you the basics. I also strongly suspect there's some sampling going on, in the bus. Pot dispensaries limit the amount you can buy, so a bus like this that takes you around lets you buy far more in a single day. You can also sample your purchases without risking driving while under the influence.

A pretty good business idea. Be the first to do it in your city! Tourists from around the world will be coming to Canada.


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## spdr1812

james4beach said:


> jargey, I have no idea what NINE is, but I strongly recommend holding the sector ETF instead of random stocks in this sector. If I had enough room in my RRSP, I would own a bit of HMMJ as a lottery ticket.
> 
> Backing up for a moment though I really recommend that you pursue an asset allocation strategy to have solid exposure to regular stock indices and bonds. I would only do this gambling (MJ stocks) with small amounts of money.


https://finance.google.ca/finance?q=delta+nine&hl=en&ei=e2AGWojZGcTcjAHz34eADA


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## james4beach

My word, it's up more than 9% today. New all time highs.

I'm living vicariously through a friend. I recommended this ETF to her around $10. That investment by Constellation Brands might have been a key event.


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## james4beach

HMMJ is now routinely trading about 1 million shares daily. I don't own any of this, but I'm fascinated by it.

I've never seen such a successful new ETF in Canada. Volume and AUM growth is incredible, it had just $10 million assets when first listed and now is more than $300 million. My guess is this will easily achieve over $1 billion AUM due to international interest.


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## My Own Advisor

I don't own it either, don't intend to, but I suspect there is a FOMO (fear of missing out) on this one.


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## Oldroe

It's hitting the right demographic that have money and smoke weed. 40-80 and they know nothing about investing they just smoke weed.

The start up euphoria was at $8 for canopy about double it's value. Now it's hysteria at $20 with sales of 17.5 mil.

You can also make the same case for tesala. Just gobs of over head and no profit in site.


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## bumblebee

wow


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## Celso

A friend brought this one up in conversation as we shared some leaf. I decided to buy 100 shares @ $14 on a lark. 
Everyone dreams of seeing movement like this, but this is just silly now. How much more will this climb before the high wears off?


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## james4beach

This is unbelievable


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## 30seconds

Im way over exposed in this industry now but up more percentage gains in the past year than I have made over past 5 year of index investing. (all unrealized gains so maybe I am to optimistic)

and down we come...!


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## doctrine

There's a new ETF in the US that has been driving interest; MJX on the NYSE. It has most of the big names in Canada, and traded 1.8 million shares today. HMMJ traded another 2 million shares. That's pretty intense volumes, and the US involvement I believe is driving the new volatility. I'm glad I made some money trading WEED in the last month so I can say I participated but it's so volatile that I don't think I can stay in this industry long term.


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## james4beach

Wow, the US has a marijuana themed ETF? I'm surprised.

The volumes have been intense.


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## doctrine

I would also add, that the amount of stock paper being issued has not dramatically increased. When $1B wants to enter the space, they have to pry it from existing shareholders. And I believe more than that has come in just in the last week or two. This is straightforward supply and demand...people want more marijuana stock.


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## Dilbert

doctrine said:


> .people want more marijuana stock.


Like a serious case of the munchies!


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## hebsie

People are scrambling on the Reddit thread. It's time for annual TFSA contributions and you can just 'see' the gleam in their young eyes, magically turning that $5500 into 20k by next weekend. The 90% YTD yield on the ETF is nothing when you look at the 1000% gains on some individual stocks in December alone.


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## 30seconds

Reddit seems to believe that the additional TFSA contribution room will make the sector grow more. 

How many Canadians use their TFSA let alone have it full? And how many of them invest in weed stocks?


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## chantl01

30seconds said:


> Reddit seems to believe that the additional TFSA contribution room will make the sector grow more.
> 
> How many Canadians use their TFSA let alone have it full? And how many of them invest in weed stocks?


Um, some of us do. And have been doing so since early 2015. This is when that whole tax-free growth thing really proves its worth.


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## james4beach

HMMJ reached a milestone today, now has over $500 million in assets. I'm starting to think it will hit $1 billion this year unless the bubble bursts.


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## doctrine

It's really hard to say it's in a bubble. There are real profits and substantial growth with a likely 5+ year runway to go as it takes years to improve quantity and quality and pry people away from their black market dealers, if the US states like Colorado are any example. An optimistic scenario would suggest more than $10B/year of sales within a few years, meaning potentially billions of operating earnings. There will have to be to justify the $20-25 billion of market cap of the Canadian companies. I think, although I'm not sure, that this is closer to the top end of optimistic scenarios that could any way justify the stock price. Going to the $40-50B of value will have to start to assume that the Canadian companies *are* the future giants, the Phillip Morris's, the Anheiser-Busch's of the world are here and now. That's more of a stretch for me, I think. 

The real magic is that investors can price this whatever way they want. If they decide pot companies are worth 25 times earnings, then actually maybe the Canadian market alone could support $50B in companies, which means a double or more from here, or a lot of new capital. I think they keep going up unless significant new capital enters the market.


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## james4beach

This would be just amazing if Canadian companies can become the first giants in this global space. Maybe as doctrine says, we might be seeing the birth of the next Philip Morris's.

Hopefully American conservatism will continue holding back the development of their industry, while we race ahead and kick the pants off the American competitors.


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## OnlyMyOpinion

Meanwhile, you could order for well under $10/gram from one of the many MOM shops in BC and have Canada Post deliver it to your door anywhere in Canada within a few days.


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## Beaver101

^ +1 ... I heard that you can get that stuff at the liquor store (Ontario's LCBO) once it gets legalized. And pharmacies are going to get into the act of dispensing it. 

I wonder if our auto insurance is ready for the scenario where someone goes HUI (high under influence) on that stuff and crashes ...


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## Butters

I've heard in the news dozens of times they are working at making a breathalyzer for THC. I'm sure with the technology these days they will figure something out. Just like alcohol, the breathalyzer just gives you a rough number, but they need to bring you back to the station measure your actual BAL. So I assume they will eventually get some accurate numbers from blood or saliva, and make a standard. Or maybe touch nose with each finger  Alphabet backwards from Z-A


I just want to put this out there, smoking anything will increase your chance of lung cancer.


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## james4beach

Butters said:


> I just want to put this out there, smoking anything will increase your chance of lung cancer.


I agree, smoking is bad for you. But there are other options... vaporizers, butter, and edibles.


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## doctrine

4.5 million shares in HMMJ traded today. That's nearly 50% higher than the previous highest volume by my count. The demand is incredible. A year ago, these companies were issuing shares hand over fist. Now, that's all dried up. No major IPOs and only a few secondary offerings from the main players which have long since been consumed. MJX, the US cannabis ETF, up to $200M in assets this week. HMMJ about $600M.


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## motl

Been seriously considering adding HMMJ to my portfolio in place of some bonds as I could stand to be a bit more aggressive. Obviously I wish I'd jumped in a bit early with this recent jump lol but it looks like it could just be the beginning. Hopefully HMMJ adds more diversification to its holdings in the future though.


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## like_to_retire

motl said:


> Been seriously considering adding HMMJ to my portfolio in place of some bonds as I could stand to be a bit more aggressive. Obviously I wish I'd jumped in a bit early with this recent jump lol but it looks like it could just be the beginning. Hopefully HMMJ adds more diversification to its holdings in the future though.


So you're considering a modification to your asset allocation by reducing safety of principle, low risk fixed income in exchange for extremely high risk, highly speculative marijuana stocks. I remember earlier in the year when Canopy Growth Corp. lost nearly half of its value from peak to trough.

Seems like quite the modification.

ltr


----------



## motl

Well the key part of my post was that I’m currently holding more bonds than I prefer. I was originally going to reallocate to my normal ETFs but am considering diverting some of it to HMMJ. 

We are talking less than 5% of my portfolio. Also watching cryp currencies carefully. Essentially considering including a very small higher risk/volatile segment in my portfolio for further diversification and potential returns if they play out as major successes. Again I’m talking a tiny percentage of my portfolio (less than 1% to start).

Haven’t decided on anything yet.


----------



## diharv

like_to_retire said:


> So you're considering a modification to your asset allocation by reducing safety of principle, low risk fixed income in exchange for extremely high risk, highly speculative marijuana stocks. I remember earlier in the year when Canopy Growth Corp. lost nearly half of its value from peak to trough.
> 
> Seems like quite the modification.
> 
> ltr


I did . 500 HMMJ and 260 HMMJ for my mine and my wife TFSAs just yesterday . I have wanted to get in on an ETF or stock with potential in its infancy for some time and feel that the train has not yet left the station so to speak. Probably will be volatile but I'll hang on and it will be interesting to watch what happens in the next six months leading up to legalization.


----------



## james4beach

doctrine said:


> 4.5 million shares in HMMJ traded today. That's nearly 50% higher than the previous highest volume by my count.


It's actually more volume than this. TSX only has 50% of the market share for Canadian stocks. The other major exchanges (alpha, omega, NASDAQ's CXC and CX2, etc) carry another 50% of Canadian stock volume.

Unfortunately most of the brokerages I've seen still quote the TSX volume, but that's a mistake. We all should get out of the habit of referring to TSX as the marketplace, because it's only part of the Canadian market.

According to consolidated volume data *for all Cdn exchanges* today, XIU traded 6.6 million shares today. XIU is generally acknowledged to be the most liquid and active ETF in the country and has been listed for about 20 years.

HMMJ traded 9.3 million shares today. Over nine million shares! Unbelievable. HMMJ had 41% more volume than XIU today.


----------



## Bill G

james4beach said:


> HMMJ reached a milestone today, now has over $500 million in assets. I'm starting to think it will hit $1 billion this year unless the bubble bursts.


Net Assets, per the HMMJ profile on the Horizons ETF website: $712,971,339 (AS AT 2018-01-05)

Wow. $200 million increase in net assets in a couple of days!

Also - Globe and Mail today on retail brokerage outages ...
"But officials in the brokerage industry say the outages mostly boil down to a simple – but crucial – problem: server space. Retail demand is so unexpectedly high, particularly for stocks in the marijuana industry, that it has become overwhelming."


----------



## stantistic

In Canada, our government recently passed two laws. 
 They are:1. Legalized gay marriage
 2. Legalized marijuana.
Legalizing gay marriage and marijuana at the same time now makes perfect Biblical sense.
Leviticus 20:13 says:
"If a man lies with another man they should be stoned.
"Apparently we just hadn't interpreted it correctly before!


----------



## Spudd

I had an individual marijuana stock for 8 months. It had gone up 350%, and I didn't feel comfortable with it, so on Friday I sold 5/6 of my position and moved it into HMMJ. More diversified, but still playing the trend.


----------



## 30seconds

Spudd said:


> I had an individual marijuana stock for 8 months. It had gone up 350%, and I didn't feel comfortable with it, so on Friday I sold 5/6 of my position and moved it into HMMJ. More diversified, but still playing the trend.


I did the opposite. Took some profits on the bigger stocks and went with the ones with more potential to catch up. Slow taking my initial investment out along the way. HVST, THCX, MARI and MPX. Hopefully this works out.


----------



## redsgomarching

HVST and MPX have been gold mines for me. I unfortunately didnt pick more MPX up during its dip and it shot up huge on friday end of day.

HVST is solid as no debt, and good growth prospects. sold out of HVST for about 1000 gain. if there is any dip i will gladly buy back in and potentially double down.


----------



## james4beach

Bill G said:


> Net Assets, per the HMMJ profile on the Horizons ETF website: $712,971,339 (AS AT 2018-01-05)
> 
> Wow. $200 million increase in net assets in a couple of days!


This is crazy. They're going to hit $1 billion much faster than I thought. Some history:

June 8: $100 million
Nov 7: $200 million
Nov 28: $300 million
Dec 29: $500 millinon
Jan 5: $713 million


----------



## doctrine

I believe total net assets is slightly overstating the growth. Net units outstanding is also important, because a big portion of the NAV growth is from share price appreciation. Although new money is entering, they are now only able to buy less units per $. In any case, I used your net asset numbers and divided by the closing share price on each of those days to get the # of units of HMMJ outstanding:

Jun 8 - 11.8 million
Nov 7 - 17.3 million
Nov 28 - 20.8 million
Dec 29 - 26.3 million
Jan 5 - 32.2 million


----------



## AltaRed

Food for thought..... http://www.canadianbusiness.com/blo...source=nl&utm_medium=em&utm_campaign=cb_daily


----------



## doctrine

I think delusional is an overstatement. This is a real industry, and at least for the first few years, the producers will have all of the pricing power because there will be undersupply. And while they might be squeezed, I think costs can also go lower. As well, oils and other products (drinks, medical) may have higher margins. And virtually every estimate of marijuana demand has been very low. I predict chaos in Ontario in particular as there will only be 40 stores to start. That will only be good for the image of these companies.


----------



## OnlyMyOpinion

The 'craft' market will stay around and help meet any legal-source undersupply. They'll operate with greater ease after legalization.


----------



## Gumball

AltaRed said:


> Food for thought..... http://www.canadianbusiness.com/blo...source=nl&utm_medium=em&utm_campaign=cb_daily


I read that yesterday and also thought it was a well written article.. the links at the bottom of the page also provide some interesting reading...


----------



## AltaRed

The regulated industry is real, but it is the expectations that are way out of line given ultimate market size and the profits that will be squeezed out by the middlemen. I like OMO's 'craft' market comment.

We are in that stage of the business cycle where investors are in Jeremy Grantham 'melt up' territory where fads such as pot and bitcoin and block chain suck in everyone in parabolic climbs to the summit before coming down the ski jump on the other side. The dotcom boom and bust was a classic in this regard. Jeremy suggests the circa 3.5 year parabolic phase started about the time of Trump's election with the peak yet unknown. Potentially wrong in timing and size but something (perhaps interest rates or a North Korea nuke) will be a trigger to cause the avalanche.


----------



## hboy54

Hi:

Another indicator of melt up surely is mining. TECK.B has been up about a dollar a day for the past week. I first thought of selling some around $32 but with all the reports of slow phone service, just called yesterday to journal over some shares. I wasn't planning to sell the RrSP shares, but I did and got mid $36 for them. By the time the journaling happens, maybe tomorrow , maybe I'll l get $38 range.

A whole pile of investors refuse to ever own mining shares at any time for any reason, including our good friend AltaRed. I think this recent action is very telling.

Hboy54


----------



## AltaRed

hboy54 said:


> A whole pile of investors refuse to ever own mining shares at any time for any reason, including our good friend AltaRed. I think this recent action is very telling.


I've had one motion sickness trip with each of POT and TCK.B in the past 10+ years. IIRC, I escaped without damage on both (made some money both times I think), but I learned my lesson and keep my roller coaster rides to amusement parks. No more of those sectors for me.


----------



## Oldroe

If you drink this Holly GR "ALE" to much you will get sick and puke in toilet many times, if you stay to long your eyes will turn yellow and your liver will harden. 

The good/smart investors will pick some fruit and invest in utilities, bonds, reit.

This smart/good invest invested his fruit in banks. Still dabbling and picking fruit.

Real investor analyses will correct this sector at some point.


----------



## james4beach

Oldroe said:


> This smart/good invest invested his fruit in banks. Still dabbling and picking fruit.


Except for those who invested in US banks, European banks, and Japanese banks.


----------



## indexxx

james4beach said:


> Except for those who invested in US banks, European banks, and Japanese banks.


SAN has always done very well for me!


----------



## Oldroe

I threw that bond thing in for you.


----------



## can_84

My 2 cents:

I do own a bit of HMMJ and Canopy. 

I bought in real early around later 2014 in this sector but the HMMJ index was early 2017 when it started trading. I am an accountant, so you may find my analysis (will try to keep it more macro focused) a bit too technical but based on my experience working corporate running the business I believe its best to look at each stock or industry as a big business. Hence, I modeled this industry based on the liquor and tobacco industry.

Here is my basis for buying into this craze:

1. Like the liquor industry there will always be demand its that simple, the question is how big is this demand? 
2. Constellation brand (one of the largest manufacturer of liquor) bought 10% stake in Canopy means they see opportunity in this sector 
3. This is a new market with allot of growth opportunity if you can raise the capital and talent to capture market share
4. There is political support as the governments want to take back the weed market just like the alcohol market after prohibition thus we can expect favorable support in the first few years until the market stabilizes. 
5. Cost of production for players such as Canopy is very promising compared to the black market and hence they can compete 
6. The world is only starting to legalize while Canadian producers are well ahead of competition and should be able to consolidate to capture the global market 
7. Younger generation is pro weed like what tobacco was to the baby boomers


I used the above assumptions and did a model (yes, its an estimate but from a macro perspective this industry is here to stay and will grow)

what we can expect is like the web industry.... initially you will have speculation such as what happened to Yahoo but eventually the industry will mature and produce players such as Google, Amazon, and Facebook. Every industry goes through this cycle (industry curve), right now the weed industry is in introduction/growth phase hence lots of players competing and growing but not profitable. This will change to maturity phase where you will see the good businesses buy out the weaker ones and consolidate while making hefty profits. 

Right now, its very expensive to buy into these companies and you would only do so based on assuming they will be very profitable in the future. This means you intend to hold log term.

there are 2 ways to buy into this industry:

1) buy in before legalization and ride the hist-aria and excitement and cash out once legalized --> this should make you a good return given that you pull out right before legalization 
2) buy in for log-term with the big players or ETF --> this should also be very profitable if the weed market repeats the tobacco trend. This means the players that capture the market will make very sweet profits until society comes around the negative health affects which will take many years but don’t be naive, weed is bad for you just like alcohol or tobacco and there will be negative sentiment in the log term.

I know some people think its a bad idea to invest into this emerging industry and promote utilities/banks and so forth. Most of these people tend to be older (baby boomers) and that’s my point, weed doesn’t resonate with this generation as much as the younger generation. Obviously, there are risks but if you plan to invest for the long term in this industry (5+) years you should do well given that you buy the ETF or the big players as most of the smaller ones will fail or get bought out. For baby boomers this industry may not be ideal as it comes with high risk and longer investment horizons.

In summary if you believe the liquor industry is profitable and worth investing in then you should look at the emerging weed market.


----------



## doctrine

I would say, I am slightly more negative on the sector than a few weeks ago. Primarily because of all of the new capital entering the space. Big raises from many companies, I think close to $500M since Xmas, maybe even more. Multiple IPOs as well. Based on some of my predictions of $/kg of cannabis, I actually think oversupply might happen within two or three years. There is easily in excess of 1000 tons production planned in Canada alone, and with the new money it might be 1500 tons. That is up to three times the estimated size of the market. Unless serious export markets are opened up, but I have the feeling most countries want it grown locally, not imported. Now to see how it all shakes out.


----------



## Oldroe

Weed stock will continue after a major correction.

What is happening is 40-80 year olds with money and no investing experience are buying in.

The ones that take profits and deploy that money else where will be long term winners.


----------



## james4beach

Perhaps noteworthy, the US is closed today so the American pot ETF (MJX) cannot be driving Canadian stocks today.


----------



## james4beach

This is interesting. HMMJ still had very high volume today (2.7 million shares). Additionally, pot stocks (WEED, ACB, APH) showed their usual high volume despite US being closed today.

So perhaps American investors aren't driving this rally. Could be a homegrown phenomenon.


----------



## OnlyMyOpinion

Gotta like homegrown. :kiwi-fruit:


----------



## twowheeled

Well I used to poke fun but I just bought into today. I feel like this has momentum behind it and on the macro side there is a bit of mania in the markets right now as people are putting in money with nowhere else to go. I think you can't ignore the flood of capital coming in especially since bitcoin has been front and centre in the financial news for so long, I think there will be a lot of demand from the get-rich-quick crowd that wants to find the next bubble. I put in money I can afford to lose, so lets see how this one turns out.


----------



## doctrine

See below for the latest tracking of HMMJ total units:

Jun 8 - 11.8 million
Nov 7 - 17.3 million
Nov 28 - 20.8 million
Dec 29 - 26.3 million
Jan 5 - 32.2 million
Jan 24 - 36.1 million

You can see how growth in net assets has begun to slow somewhat, although still very positive. If tracked by HMMJ, there is about $6 million of new units being created per trading day over the last three weeks. There has easily been $500M+ of new stock issued by public cannabis companies just so far this year.

I think the supply and demand of stock paper is more balanced now, as there are enough treasury stock issuances at this time to meet the demand of new investors, at least at this time. Expect many more stock issues. The value of cannabis paper is very high, the barriers to entry low, and the margins excellent, attracting more capital.


----------



## james4beach

I pulled up a quote screen this morning and these volumes for marijuana stocks are still utterly insane.

It's 11 am in Toronto. According to my quote screen, Canadian Tire has traded 32K shares so far. Rogers has traded 235K shares. Suncor has traded 461K shares, *Royal Bank (biggest stock in the market)* has traded 543K shares.

And then we have, WEED with 4.8 million shares traded, ACB with 16 million shares, APH with 3 million shares

That's 16 million shares on ACB... MILLION! That's the volume that America's SPY... arguably the most popular and liquid security in the world has traded at this time of day? I wonder how much stress these marijuana stocks are putting on the Canadian stock market system.

Insanity and sickness, is what this is! I agree the pot stocks are interesting but these volumes are absolutely crazy, not in a good way.


----------



## nobleea

doctrine said:


> The value of cannabis paper is very high, the barriers to entry low, and the margins excellent, attracting more capital.


The margins of making/selling weed are excellent? Or the margins in issuing new cannabis-related paper are excellent?


----------



## doctrine

nobleea said:


> The margins of making/selling weed are excellent? Or the margins in issuing new cannabis-related paper are excellent?


Yes.


----------



## humble_pie

james4beach said:


> I pulled up a quote screen this morning and these volumes for marijuana stocks are still utterly insane.
> 
> It's 11 am in Toronto. According to my quote screen, Canadian Tire has traded 32K shares so far. Rogers has traded 235K shares. Suncor has traded 461K shares, *Royal Bank (biggest stock in the market)* has traded 543K shares.
> 
> And then we have, WEED with 4.8 million shares traded, ACB with 16 million shares, APH with 3 million shares
> 
> That's 16 million shares on ACB... MILLION! That's the volume that America's SPY... arguably the most popular and liquid security in the world has traded at this time of day? I wonder how much stress these marijuana stocks are putting on the Canadian stock market system.
> 
> Insanity and sickness, is what this is! I agree the pot stocks are interesting but these volumes are absolutely crazy, not in a good way.




meanwhle have u noticed how the good old stuff is declining

banks may finally be starting to turn down although it's too soon to see any trend confirmed

good old stuff like SNC, FTS, BCE, T & ENB dropping steadily, day after day


.


----------



## james4beach

MJ stocks crashing in lock step with bitcoin. It's the same crowd holding them. Risk of contagion to broader stock market imo.

Luckily though everyone has diverse asset allocations to guard against such things


----------



## john.cray

A new ETF today btw NEO:MJJ. Actively managed, short selling. Same 0.75% MER.


----------



## james4beach

What in the blazes is the "NEO" exchange?


----------



## john.cray

james4beach said:


> What in the blazes is the "NEO" exchange?


Another Canadian stock exchange, I assume. Not sure though. Here's the link: https://www.redwoodasset.com/funds/marijuana-opportunities-fund/


----------



## 30seconds

What I ask my self is will we see a another run up before legalization.. I think so. Will it reach ATHs between now and then.. all companies no, most.. probably. Overall I am still sitting fine since my major holding I purchased last year. For others though.. it hurts more. Still sucks seeing my portfolio value drop but it is what it is.


----------



## doctrine

Action in marijuana seems straightforward TA. HMMJ broke key support at $20 (Weed around $30), and there is no near bottom. No point in owning or holding until there is a bottom. Fundamentally, you have to like WEED more at $27 than $44, that's straight forward, especially since they're loaded up with cash.

Also, money flows have stabilized. 37.5M units outstanding, versus 36.1M on 24 January. That's only about $30M in new money units in this ETF. Most of the volume is day trading, I would say.


----------



## 30seconds

doctrine said:


> Action in marijuana seems straightforward TA. HMMJ broke key support at $20 (Weed around $30), and there is no near bottom. No point in owning or holding until there is a bottom. Fundamentally, you have to like WEED more at $27 than $44, that's straight forward, especially since they're loaded up with cash.
> 
> Also, money flows have stabilized. 37.5M units outstanding, versus 36.1M on 24 January. That's only about $30M in new money units in this ETF. Most of the volume is day trading, I would say.


I'm a buy and hold kind of guy. Still up but some of these bags are growing bigger though. IF I were to sell I would sell all my position and re evaluate. I just keep thinking that this will stabilize... Then it doesn't! If I get to only a 5% gain (total mjn portfolio) i'm out!


----------



## 30seconds

Soo this is what 2008 feel like. Good learning lesson lol


----------



## OnlyMyOpinion

Hoowee hold on to that toboggan. 
Maybe folks have not heard of limit orders and just throw their cards on the table and run to the exit?


----------



## rssdale

Bought around $15. Contemplating whether should pull out now and realize some gains or hold on.


----------



## hboy54

30seconds said:


> Soo this is what 2008 feel like. Good learning lesson lol


LOL this is not remotely what 2008 felt like.


----------



## Fain87

james4beach said:


> What in the blazes is the "NEO" exchange?


Another ats and listing exchange. They were strictly an ATS venue like chiX or omega but branched out to become a full fledged listing exchange like tsx,cse etc


----------



## james4beach

I don't hold HMMJ but do hold APH which basically moves the same way.

If we make the assumption that the marijuana sector is in a long term uptrend, one might reasonably think it could fall down to its 200 day moving average and then keep rallying. This would still be a healthy uptrend pattern and a pretty normal correction within the context of a bull.

If that correction happens, HMMJ could decline another 30% so I would not be surprised at all of this happens. A 30% decline doesn't mean the rally is over. On the other hand a 45% to 50% decline would mean it's over.

It will undoubtedly be painful for those who bought in quite high, even if the sector makes a normal correction and continues rallying.


----------



## 30seconds

hboy54 said:


> LOL this is not remotely what 2008 felt like.


Well 30% of my portfolio is in weed stocks and it dipped +30% in three days.. It wasn't my total portfolio and I am still green overall but I defiantly experienced what a crash felt like. I've only been investing in this bull run so it has been an eye opener.


----------



## james4beach

30seconds said:


> Well 30% of my portfolio is in weed stocks and it dipped +30% in three days.. It wasn't my total portfolio and I am still green overall but I defiantly experienced what a crash felt like. I've only been investing in this bull run so it has been an eye opener.


Oh wow, that's got to be painful.

Weed stocks + crypto currencies (my bubble gambles) are 0.25% of my investment portfolio. Some people will point out, though, at those levels "what's the point".


----------



## OnlyMyOpinion

0.25% of your portfolio - what's the point? :biggrin:


----------



## motl

Got about 10% in HMMJ. Reduced my VCN holding to make room for it as I felt I had more than I wanted to the Canadian economy in general. 

Obviously down now but I'm planning to hold it long-term so not too concerned.


----------



## 30seconds

james4beach said:


> Oh wow, that's got to be painful.
> 
> Weed stocks + crypto currencies (my bubble gambles) are 0.25% of my investment portfolio. Some people will point out, though, at those levels "what's the point".


Yep. The euphoria feeling I had was just like :O when it was running up. Should have locked in gains then but I'm not worried. Long and strong!


----------



## james4beach

Checking up on HMMJ at 4/20 valuation: it now sits at $693 million of assets. As of 4/20, the one year return is +65%.

This has been a very interesting fund. A year ago it only had $100 million of assets.


----------



## doctrine

james4beach said:


> Checking up on HMMJ at 4/20 valuation: it now sits at $693 million of assets. As of 4/20, the one year return is +65%.
> 
> This has been a very interesting fund. A year ago it only had $100 million of assets.


Here is my old tracking of the # of units being held by HMMJ:

Jun 8 - 11.8 million
Nov 7 - 17.3 million
Nov 28 - 20.8 million
Dec 29 - 26.3 million
Jan 5 - 32.2 million
Jan 24 - 36.1 million
Apr 21 - 41.4 million

In the last 3 months, there has been 5 million new units created, so growth is there, but it is certainly dropped off. The return has been -29% in that period of time. 

I think there will be severe oversupply within 12 months of legalization. I think now most investors are going to want to see how sales hold up in such a competitive environment with very little barrier to entry. Scale will matter, I think, if it becomes a commodity and branding is not important. There are some awfully big industrial farming sized greenhouses being built.


----------



## james4beach

Thanks doctrine. That's interesting, so they have still been able to issue new units (new money flowing in) even during the last few months of pot stock weakness.

I also can't understand how anyone would want to buy in or invest at this point. Seems like it would be best to wait and see how it all shakes out.


----------



## james4beach

Strength seems to have resumed. $860 million in assets now and I still think it might exceed $1 billion by end of year. To illustrate again just how crazy this asset accumulation (investor appetite) has been, HMMJ is now larger than:

XGD, the 17 years old gold miners ETF ($745 million)
XAW, the iShares core and couch potato ETF for global allocation ($704 million)


----------



## Italicum

can_84 said:


> My 2 cents:
> 
> I do own a bit of HMMJ and Canopy.
> 
> I bought in real early around later 2014 in this sector but the HMMJ index was early 2017 when it started trading. I am an accountant, so you may find my analysis (will try to keep it more macro focused) a bit too technical but based on my experience working corporate running the business I believe its best to look at each stock or industry as a big business. Hence, I modeled this industry based on the liquor and tobacco industry.
> 
> Here is my basis for buying into this craze:
> 
> 1. Like the liquor industry there will always be demand its that simple, the question is how big is this demand?
> 2. Constellation brand (one of the largest manufacturer of liquor) bought 10% stake in Canopy means they see opportunity in this sector
> 3. This is a new market with allot of growth opportunity if you can raise the capital and talent to capture market share
> 4. There is political support as the governments want to take back the weed market just like the alcohol market after prohibition thus we can expect favorable support in the first few years until the market stabilizes.
> 5. Cost of production for players such as Canopy is very promising compared to the black market and hence they can compete
> 6. The world is only starting to legalize while Canadian producers are well ahead of competition and should be able to consolidate to capture the global market
> 7. Younger generation is pro weed like what tobacco was to the baby boomers
> 
> 
> I used the above assumptions and did a model (yes, its an estimate but from a macro perspective this industry is here to stay and will grow)
> 
> what we can expect is like the web industry.... initially you will have speculation such as what happened to Yahoo but eventually the industry will mature and produce players such as Google, Amazon, and Facebook. Every industry goes through this cycle (industry curve), right now the weed industry is in introduction/growth phase hence lots of players competing and growing but not profitable. This will change to maturity phase where you will see the good businesses buy out the weaker ones and consolidate while making hefty profits.
> 
> Right now, its very expensive to buy into these companies and you would only do so based on assuming they will be very profitable in the future. This means you intend to hold log term.
> 
> there are 2 ways to buy into this industry:
> 
> 1) buy in before legalization and ride the hist-aria and excitement and cash out once legalized --> this should make you a good return given that you pull out right before legalization
> 2) buy in for log-term with the big players or ETF --> this should also be very profitable if the weed market repeats the tobacco trend. This means the players that capture the market will make very sweet profits until society comes around the negative health affects which will take many years but don’t be naive, weed is bad for you just like alcohol or tobacco and there will be negative sentiment in the log term.
> 
> I know some people think its a bad idea to invest into this emerging industry and promote utilities/banks and so forth. Most of these people tend to be older (baby boomers) and that’s my point, weed doesn’t resonate with this generation as much as the younger generation. Obviously, there are risks but if you plan to invest for the long term in this industry (5+) years you should do well given that you buy the ETF or the big players as most of the smaller ones will fail or get bought out. For baby boomers this industry may not be ideal as it comes with high risk and longer investment horizons.
> 
> In summary if you believe the liquor industry is profitable and worth investing in then you should look at the emerging weed market.


"Don't be naive, weed is bad for you". Trying to make money at all costs? I will say 'no' on ethical grounds. Full stop.


----------



## AltaRed

Italicum said:


> "Don't be naive, weed is bad for you". Trying to make money at all costs? I will say 'no' on ethical grounds. Full stop.


I don't care much about ethical investing, for or against, but I think investors will be sorely disappointed in a year's time when the numbers of legal weed don't work. Perhaps the export market, if developed well, will be legal weed's financial saviour, but I don't expect much of a dent to occur in the illegal market..... which will almost certainly undercut legal weed prices.


----------



## nobleea

AltaRed said:


> I don't care much about ethical investing, for or against, but I think investors will be sorely disappointed in a year's time when the numbers of legal weed don't work. Perhaps the export market, if developed well, will be legal weed's financial saviour, but I don't expect much of a dent to occur in the illegal market..... which will almost certainly undercut legal weed prices.


I agree that the numbers aren't going to work out. But I would also think that the illegal market will have a hard time undercutting legal weed. Maybe if pricing is set by some bureaucrat they won't have a problem. But if it's free market, I don't think they'll do well. There's so much capacity being built and it's hard to beat the yields and efficiencies of an industrial-level agro-plant.
However, I think several provinces are heading towards a gov-t owned dispensary. So the illegal market will continue to thrive there. Particularly ON. 40 stores for the whole province?

Who knows. I don't think demand is going to increase substantially overnight. There may be a small blip in the first year as a novelty.

I bought ACB a few months ago in anticipation of this. Will sell well before the full legalization date.


----------



## AltaRed

From what I have read, the gov't seems set on about $10 per gram at the retail level. From that, there will be production and distribution costs, retail margin, regulatory costs, corporate income taxes, weed tax and probably HST (GST+PST). Everyone wants their piece of the pie. Illegal weed has only production and distribution costs. IIRC, neither Colorado nor Washington state have made a significant dent in the illegal market which goes for about $7 per gram. Our legal market will likely have to export to stay solvent or everyone will have to take smaller pieces of the pie.


----------



## twa2w

I don't think the export market will save our producers. Not when producers in South America already have the ability to produce and ship to Canada for about 1/2 or less than what it costs to produce in Canada. 
If Canada expects to export they have to be prepared to be open to imports. That would kill our industry pretty quick.


----------



## nobleea

Wonder if weed will be included in NAFTA 2.


----------



## james4beach

HMMJ assets are now $958 million. I still think it will exceed a billion $ by the end of the year.

There is a fascinating aspect of HMMJ that I just recently learned of. Because marijuana stocks are so actively traded and shorted, there is significant borrowing demand for the shares. HMMJ is able to earn securities lending income by lending out the shares to hedge funds and brokers, and collects very significant income doing this, allowing them to outperform their benchmark. They write in the 2017 annual report:



> The significant outperformance of the ETF over the Underlying Index is, in large part, due to the revenue earned by the ETF through its securities lending activities. The securities lending revenues earned by the ETF enabled the ETF to pay net income distributions of $5,531,006, or $0.31 per unit. This represents an annualized yield of approximately 4.18%, after expenses, on the ETF’s issue NAV of $10.00, despite holding a portfolio of securities which, for the most-part, do not pay dividends themselves.


HMMJ yields 5% today.

This comes along with some risk of loss, as is always the case with securities lending. HMMJ is lending out 1/4 of their securities and could lose money if one of the borrowers defaults.

In other words, HMMJ's enormous current-day 5% yield comes from securities lending, not stock dividends! It's normal for ETFs and mutual funds to lend out securities, but normally they collect such a small securities lending income that it's hardly noteworthy. In this case, because of the insanity around marijuana stocks, the securities lending income from lending 1/4 of their assets is huge.

Horizons also describes this HMMJ income distribution in this article.

A very interesting situation. Not sure you can count on securities lending to keep providing such an income stream long term, but it seems beneficial for a marijuana investor to use HMMJ. If you hold a few of these stocks individually, you aren't compensated for securities lending, even though your broker may be lending your shares behind the scenes. If you hold HMMJ, then Horizons passes through the income from securities lending to you.


----------



## can_84

most of the companies HMMJ I think will fail or get bought. Now is a very ripe time to get out! I just did ..


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## james4beach

In January, I posted:


james4beach said:


> HMMJ reached a milestone today, now has over $500 million in assets. I'm starting to think it will hit $1 billion this year unless the bubble bursts.


Well, it happened  And it's on the front page of Bloomberg:

Canadian Weed ETF Passes Billion-Dollar Mark


----------



## scorpion_ca

I just read an article on CNBC regarding those who purchased Cryptocurrencies in the end of last year and beginning of this year because of FOMO and their hard earned money is down 70% to 80% so far. Some even took loan to purchase it. Greedy bastards....

We will read the same story once the bubble bursts in the Marijuana industry.


----------



## AltaRed

scorpion_ca said:


> We will read the same story once the bubble bursts in the Marijuana industry.


I am of a similar view but don't think the decline will be as dramatic as for the crypto-bubble. The aggregate market cap of all these weed companies wildly exceeds any reasonable estimates of net cash flow multiples from company operations for some years (never mind earnings that we won't see for a long time due to the tax pools they have been accumulating). All the capital that is being expended to build production and distribution facilities has to be paid back eventually.


----------



## james4beach

I think the MJ sector is a bubble but I don't think it's as risky as crypto currencies. The crypto currencies are an absolute disaster, free-for-all, unregulated, with scams all over the place. The MJ companies on the other hand are public corporations with auditors, boards, professional management, and operate under regulatory guidelines. They meet TSX listing requirements.

I think of the MJ sector has being like pharma. Very volatile, could incur big losses, but still legitimate companies that could possibly have bright futures. Just like pharma, I wouldn't ever invest too much into them.


----------



## Butter

Market cap

Weed - 15 billion
ACB - 8.6 billion
APH - 5 billion



Air Canada 7.5
Canadian Tire 9
Dollarama 16.6
Tim Hortons 19
NA 21.8


There probably will be a burst, but I don't think it will be soon. 
Everything weed related will be sold out for a couple months. 
But after a couple financials come up, they will definitely start slowing down. 
But there will still be hype out of country.

Better yet, is there a pizza or potato chip ETF for the munchies?


----------



## james4beach

HMMJ hit a new all time high today


----------



## robfordlives

Clearly all weed stocks are going to infinity. There is no stopping this train!!!

To be honest I"m perplexed by this rebound. Late 2017 and early 2018 the young people at work were raving about weed stocks.....then from about March to recently nary a peep and I thought for sure the bubble had burst but yet here the frenzy seems to have re-appeared. Abit sad that value type stocks with real profits are being completely ignored for these overvalued hype stocks.

Ultimately the producers will trade like commodity stocks...they are growing a plant pure and simple and orders will go to the lowest cost producer.


----------



## doctrine

Cannabis companies have some value. Real markets are opening up. WEED just took a $5 billion cash injection from one of the largest alcohol producers in the world. 

The effects of legalizing cannabis are also real. Alcohol sales have fallen up to 30% as people have substituted cannabis in real quantities.

So, there is something to it - it's not a zero market by any stretch - it's a legitimate multi-billion dollar industry.


----------



## AltaRed

It is a legitimate industry, but it is also a replay of the dotcom boom (and eventual bust). The aggregate market caps of the players are just so far out of anything remotely possible to achieve on an aggregated cash flow basis over the next 10 years, never mind an earnings basis. Given what happened to dotcom investors in 2000, and as a retiree counting on his portfolio to see himself through the next 20-25 years or so of my life, I won't be touching anything in this space.


----------



## fatcat

agree that they may well come down to earth but the risk is worth it ... canada has a world-wide lead on the mainstreaming of this industry, we have the land, power and water to grow very inexpensive high-quality pot

no other first-world country is close (the us states don't count since they can't access money or move their product outside state) and federal legalization is a few years away at best ... mexico might get in and somewhere in europe but i can see them looking to canada for advice and partnerships

we are developing first-class companies who will no doubt be looking for overseas opportunities, we have a terrific lead in this business

the valuations are based on all this and there is plenty of big corporate money on the sidelines looking at the business as we have seen in the news in the last few days


----------



## hboy54

AltaRed said:


> It is a legitimate industry, but it is also a replay of the dotcom boom (and eventual bust). The aggregate market caps of the players are just so far out of anything remotely possible to achieve on an aggregated cash flow basis over the next 10 years, never mind an earnings basis. Given what happened to dotcom investors in 2000, and as a retiree counting on his portfolio to see himself through the next 20-25 years or so of my life, I won't be touching anything in this space.


The sector is at a minimum a factor of 10 overvalued. I am likely one of the highest risk taking investors on this forum and I won't go anywhere near this either. This is agriculture and commodity stuff. The only way to make it worse is to get an airline involved somehow.

Having said the above, greater fools have been plentiful and might continue to be.


----------



## AltaRed

fatcat said:


> the valuations are based on all this and there is plenty of big corporate money on the sidelines looking at the business as we have seen in the news in the last few days


I don't disagree but I also know big corporate money has blown its brains out before, e.g. buying into the fluff of the dotcom boom of the late '90s. Don't assume they really are doing anything other than placing a bet that could go very bad. Think of WorldCom, AOL/Time Warner and a whole host of other companies that essentially destroyed themselves almost 20 years ago. Seems like every generation must re-learn the mistakes.

That said, I agree Canada has an inside track on developing a global business before anyone else really gets on track. I hope it succeeds. If nothing else, I hope Canada continues to draw in a whole bunch of international money into this space. Given the drying up of foreign investment elsewhere in Canada for a host of reasons, we need to at least suck International investors dry to the benefit of Canadian shareholders.


----------



## james4beach

Horizons has expanded the number of holdings inside HMMJ, now with a total of 49 stocks:
https://www.cbc.ca/news/business/cannabis-tilray-horizons-etf-1.4839105


----------



## AltaRed

Worth a read https://www.moneysense.ca/save/the-...ermalt=0&sfi=f650fb5c3c3d2d73650ee59763d53cf9


----------



## doctrine

I read that earlier, really it's missing the biggest bear argument: simple oversupply. There is something like 3000 metric tons of marijuana capacity planned domestically, and that was a few months ago; it might be even more now. The estimated total Canadian consumption varies, but generally I have seen ranges around 600-800 tons, including the total black market. There is simply going to be tons of weed growing out of everyone's ears and up to their eyeballs at the same time. Combine that with sky high valuations, and something will have to give. It will probably take until 2020 for that full capacity to be planted, so there will be a delayed reaction, but this is rather quite inevitable.


----------



## OnlyMyOpinion

3000 metric tons per year is 6.6 million pounds. That (according to Google) will make an incredible *5.94 billion joints* (0.5gm/jt, 28.35gm/oz, 16oz/lb, 2200lb/metric ton). Note: I'm assuming the entire weight is usable/consumable.
There are 28.8 million Canadians age 20 or older.
That is 206 joints per year for each and every of 28.8 million adult Canadians.
Currently, 4.2 million are recent users, while 2.4 million are daily or weekly users.
Simplistically, demand would need to increase by over 10 times before all that supply could go up in smoke.
And if that ever happened, I think the country would grind to a halt except for munchie runs to 7-Eleven. Or do they all just go to sleep?


----------



## james4beach

Unfortunately it's impossible to time the end of bubbles and manias. Those arguments might all make sense, but it doesn't mean that pot stocks are going to fall tomorrow. With Americans getting on board (say TLRY, which is US traded), this could even get crazier.

Additionally, we're in a broad stock bull market and there isn't much fear out there. This helps buoy themes like crypto currencies, pot, and tech stocks. A euphoric market seeks outlets for its unrestrained greed & risk taking. IMO marijuana has become one of those areas.

The pot rally could possibly keep going as long as the general stock market stays bullish. People don't really fear anything these days.

Even as I write this, I'm seeing pot stock ads on CMF.


----------



## OnlyMyOpinion

OnlyMyOpinion said:


> 3000 metric tons per year is 6.6 million pounds. That (according to Google) will make an incredible *5.94 billion joints* (0.5gm/jt, 28.35gm/oz, 16oz/lb, 2200lb/metric ton). Note: I'm assuming the entire weight is usable/consumable.
> There are 28.8 million Canadians age 20 or older.
> That is 206 joints per year for each and every of 28.8 million adult Canadians.
> Currently, 4.2 million are recent users, while 2.4 million are daily or weekly users.
> Simplistically, demand would need to increase by over 10 times before all that supply could go up in smoke.
> And if that ever happened, I think the country would grind to a halt except for munchie runs to 7-Eleven. Or do they all just go to sleep?


Some new numbers being reported. Doctrine, not sure of the source for the 3000 metric tons number?
This article is reporting demand estimates of 400k-500k kg on the low side from Canaccord, and 926k kg from Health Canada on the high  side. That "only" translates to demand of 800 million up to 1.85 billion joints. Also, CD Howe is predicting that only only 1/3 of first year's demand (200k kg of 600k kg) can be met in the first year.


----------



## doctrine

Yes, there will be a shortage at first.

But look at Aurora's projections from their latest Q report:

Facilities and Production update
_
During and subsequent to the quarter, the Company made significant progress towards increasing its production capacity. As at September 2018, the annualized run rate of Aurora's in-service production rooms is 45,000 kgs. Management anticipates that around calendar year end 2018, the Company will have a production run rate in excess of 150,000 kg per annum, with subsequent scale up to over 500,000 kg per annum_

Canopy is producing even more. And there are more big players - Aphria, Hydrocophery, Tilray, and many more. Maybe all planned production won't happen, but right now it is wel in excess of 600-800 kg total market estimates. Aurora alone is planning on nearly producing that much.


----------



## james4beach

Ridiculous move on HMMJ today, up over 7%. I wonder how long until the bubble bursts.


----------



## indexxx

james4beach said:


> Ridiculous move on HMMJ today, up over 7%. I wonder how long until the bubble bursts.


Dropped off over 3% today- interesting to see how things go after tomorrow. Still holding.


----------



## james4beach

Wow, 12% drop in HMMJ today! This sector is insane.

Hopefully anyone investing in this stuff has kept marijuana to a very small % of their portfolio.


----------



## jargey3000

D'OH !!!


----------



## OnlyMyOpinion

Oh my. I hope you didn't find yourself going down the highway in a car filled with irrationally exuberant investors. Since Oct. 17, all they want to do is to get some of their money back so they can go down to the local store and make a purchase.

In their minds,_"Up In Smoke"_ is a good thing - not a capital loss. :excitement:


----------



## jargey3000

buying opp, or what...?


----------



## indexxx

jargey3000 said:


> buying opp, or what...?


I put a stop limit in on Sunday night- glad I did so. I'm on the sidelines right now. Too bad my ACB stop didn't get filled also- lost a bit over the past two days obviously. Should have sold out on Friday. Pigs get slaughtered and all that...


----------



## AltaRed

jargey3000 said:


> buying opp, or what...?


I would not catch a falling knife. This ETF could easily fall to the $10-12 range. It got so far ahead of itself, it went into near space orbit.

Those of us who were around circa 2000 saw all this play out the same way with dotcom stocks... and then some. Just look at the NASDAQ from about 1995-2002 https://www.macrotrends.net/1320/nasdaq-historical-chart


----------



## jargey3000

AltaRed said:


> I would not catch a falling knife. This ETF could easily fall to the $10-12 range. It got so far ahead of itself, it went into near space orbit.
> 
> Those of us who were around circa 2000 saw all this play out the same way with dotcom stocks... and then some. Just look at the NASDAQ from about 1995-2002 https://www.macrotrends.net/1320/nasdaq-historical-chart


...oh..._I_ was around then, sonny....
(made a few nice bucks on a company called Newbridge Networks I think...Terry somebody...?)


----------



## james4beach

Wow, Aphria fell about 30% today on a research report that criticized the company
https://www.cbc.ca/news/business/aphria-stock-short-seller-1.4929951

APHA was the most active stock in Canada by far today.

APHA: 54 million shares
ACB: 33 million shares
XIU: 26 million shares
BBD.B: 23 million shares


----------



## OnlyMyOpinion

And per thread, HMMJ closed down 3% at $16.99. Its been in a swoon from $26.05 since that cloud of smoke appeared mid-October. 
The day's hi-lo was $16.56-$17.91. Volatile. Is this indicative of retail traders without an awareness of what a limit order is?


----------



## AltaRed

OnlyMyOpinion said:


> And per thread, HMMJ closed down 3% at $16.99. Its been in a swoon from $26.05 since that cloud of smoke appeared mid-October.
> The day's hi-lo was $16.56-$17.91. Volatile. Is this indicative of retail traders without an awareness of what a limit order is?


That doesn't seem like an extreme swing on a volatile stock to me, less than 10%, albeit a bit much on an ETF. Every bit of that could have happened with active use of limit orders today... changing pricing every 10 minutes or so, for example.


----------



## james4beach

AltaRed said:


> That doesn't seem like an extreme swing on a volatile stock to me, less than 10%, albeit a bit much on an ETF. Every bit of that could have happened with active use of limit orders today... changing pricing every 10 minutes or so, for example.


The way I see it, the ETF barely moved at all today! Considering one of its big constituents fell 30%, it's pretty impressive the ETF only spanned 8% intraday and closed net down 3%


----------



## james4beach

Amazing, the securities lending income on HMMJ has gone up further. The ETF now yields 7% to 8% due to the revenue HMMJ is able to make by lending out its shares to short sellers. Bloomberg is running this article on the intense demand to short TLRY which has driven the borrowing cost up up 900% APR.
https://www.bloomberg.com/news/arti...pay-900-for-the-privilege?srnd=premium-canada

It's this kind of insane desire to short the shares that lets HMMJ earn revenue by lending the shares of TLRY and others. I'm not aware of any other ETF that has all of its yield (not actually a dividend) coming from securities lending revenue!


----------



## undersc0re

Seems like this etf has a high expense ratio.


----------



## Onagoth

undersc0re said:


> Seems like this etf has a high expense ratio.


pretty common amongst thematic ETFs


----------



## Onagoth

james4beach said:


> Amazing, the securities lending income on HMMJ has gone up further. The ETF now yields 7% to 8% due to the revenue HMMJ is able to make by lending out its shares to short sellers. Bloomberg is running this article on the intense demand to short TLRY which has driven the borrowing cost up up 900% APR.
> https://www.bloomberg.com/news/arti...pay-900-for-the-privilege?srnd=premium-canada
> 
> It's this kind of insane desire to short the shares that lets HMMJ earn revenue by lending the shares of TLRY and others. I'm not aware of any other ETF that has all of its yield (not actually a dividend) coming from securities lending revenue!


I'm a little lost on the impact of this? What are the risks to the ETF associated with securities lending? I get that the income stream has far outpaced the dividend stream from the underlying holdings, but is that really surprising? I wouldn't expect growth stocks in the Marijuana sector to be paying any dividends right now. And looking at the Q2 2018 statements, securities on loan only represents 0.5% of the ETFs total assets.

Does securities lending by itself present any risk to the stability or risk of the ETF? This arrangement seems somewhat akin to how BMO has defensive ETFs that sell options to produce a stream of income to supplement the ETFs dividends from the underlying holdings.

I do hold a small position in HMMJ so I am genuinely curious to know if I am missing something.


----------



## james4beach

Onagoth said:


> I'm a little lost on the impact of this? What are the risks to the ETF associated with securities lending? I get that the income stream has far outpaced the dividend stream from the underlying holdings, but is that really surprising? I wouldn't expect growth stocks in the Marijuana sector to be paying any dividends right now. And looking at the Q2 2018 statements, securities on loan only represents 0.5% of the ETFs total assets.
> 
> Does securities lending by itself present any risk to the stability or risk of the ETF? This arrangement seems somewhat akin to how BMO has defensive ETFs that sell options to produce a stream of income to supplement the ETFs dividends from the underlying holdings.


When an ETF (or mutual fund) lends out securities, it receives cash collateral in response. There is a bit of risk because the borrower could default and not return the securities. In that situation the fund still has the cash collateral, but might miss out on price increases if those securities gain value in the mean time.

That being said, I think the risk of the pot stocks themselves far exceeds the risk of the securities lending. So I wouldn't be concerned about the securities lending here. On top of them, the lender (you) is getting very well compensated for the lending action.

All mutual funds lend out securities, but the kind of stocks HMMJ lends out are extremely desirable right now so the compensation is huge... which gets delivered to you via the massive HMMJ dividend. I don't think there's any reason to worry about their lending activity. This looks like a sweet situation for people who are willing to invest in pot stocks. If you held the stocks individually, you wouldn't get compensated for the lending. Doing it via HMMJ gets you this additional benefit.


----------



## Onagoth

james4beach said:


> When an ETF (or mutual fund) lends out securities, it receives cash collateral in response. There is a bit of risk because the borrower could default and not return the securities. In that situation the fund still has the cash collateral, but might miss out on price increases if those securities gain value in the mean time.
> 
> That being said, I think the risk of the pot stocks themselves far exceeds the risk of the securities lending. So I wouldn't be concerned about the securities lending here. On top of them, the lender (you) is getting very well compensated for the lending action.
> 
> All mutual funds lend out securities, but the kind of stocks HMMJ lends out are extremely desirable right now so the compensation is huge... which gets delivered to you via the massive HMMJ dividend. I don't think there's any reason to worry about their lending activity. This looks like a sweet situation for people who are willing to invest in pot stocks. If you held the stocks individually, you wouldn't get compensated for the lending. Doing it via HMMJ gets you this additional benefit.


Sounds good, thanks for the feedback 

I understand the risk of the pot stocks themselves which is why I’ve limited my position to no more than 2% of my portfolio (right now it’s closer to 1.5%)

But this securities lending thing was new to me.


----------



## james4beach

One of my friends had a speculative position in HMMJ. I had suggested it to her initially as a lottery ticket (in parallel to my posts in this thread), she got in at a great price and I recently recommended that she sell and take home the profits. She's sold it now for about 100% gain. I told her that I don't think the sector is showing the kind of movement that would justify staying in. Net assets of HMMJ seem to have topped out, meaning money has stopped flowing in rapidly (for now). There was a time when hundreds of millions of $ was flowing into this but I was always watching these money flows, trying to see whether it continued, or tapered off.

For now, it seems to have attracted as much speculative money as it's going to, and reached a waiting state. Doubling your money on a lottery ticket like this is pretty good, but I wouldn't dream of buying in now. Not unless the companies started demonstrating great results and justifying their share prices.

The securities lending and huge distribution (not a dividend) was a nice freebie for HMMJ holders that I didn't see coming. That boosted the returns substantially, just a happy side effect of how Horizons structured this, plus Horizons' generosity in distributing the income to shareholders. This is actually really impressive of them because they probably could have kept the securities lending income for themselves instead of sharing it with unit holders.


----------



## james4beach

The sector has been steadily weakening since I suggested my friend sell HMMJ and lock in the gains. Also look at the volume on HMMJ, it's basically gone.

I interpret that as a sign that investment hype and general enthusiasm has disappeared from this bubble. New money has stopped flowing in, and the sector has been sideways (going nowhere) since early 2018 as shown here: http://schrts.co/fpQpCVbv

I'm tempted to say that this party is over with peak prices occurring back in October 2018... but it's always hard to predict when bubbles end. I also think the pot bubble is linked to the bitcoin bubble, as both were popular with novice retail investors who were first time investors. For both, the big run-up was in 2017 and then both have gone nowhere since Jan 2018.

I think there's an underlying phenomenon that has been feeding both pot stocks & bitcoin: new, amateur investors who had excess money for the first time, emboldened by generally positive market conditions and central bank stimulus, little appreciation for risk, lots of greed. When a general bull market goes on for long enough, eventually you get some bubbly pockets emerging.

And Wall Street and Bay Street are always skilful in exploiting those retail bubbles, taking money out of the hands of new investors. Bull markets and central bank stimulus are always very good for the capital markets industry... they absolutely love this kind of stuff.

If the general bull market and central bank stimulus continues, and if markets continue to look riskless, I could see bitcoin & pot stocks come roaring back too.


----------



## humble_pie

it's true weed stocks are hyper volatile but i don't see the now-slipping range down from recent frothy peaks as being "stupid."

MJ has been a leader export among canadian ag products for decades. Stats are not reliable but they say MJ export has always been worth more in $$ than wheat export. Now that many producers are legal, it's finally possible to know something about their earnings.

meanwhile more & more US states are opening up, first to medical use, then to recreational use. Sooner or later the US feds are going to legalize recreational. Even if later, it all bodes reasonably well for canadian producers.


----------



## OnlyMyOpinion

Good summary James.

Here is the next big pot issue that the Libs seem to have missed in their rush to legalize:

Pot shop dispute echoes gambling battle in quest for Indigenous jurisdiction

THC slushies, pirate radio and the cannabis-driven boom in a Mohawk community


----------



## humble_pie

OnlyMyOpinion said:


> Here is the next big pot issue that the Libs seem to have missed in their rush to legalize:
> 
> Pot shop dispute echoes gambling battle in quest for Indigenous jurisdiction
> 
> THC slushies, pirate radio and the cannabis-driven boom in a Mohawk community




i doubt ottawa overlooked anything

the 1763 treaty of paris, which ended the 7 years' war in europe & delivered eastern canada to the british instead of the french, did include some clauses regarding how indigenous nations were to be treated by the conquerors.

particularly, trading nations were to be allowed free access back & forth across the borders of upper & lower canada & the 13 british colonies (later to become the US of A) to the south.

specifically the treaty said that indigenous peoples were free to cross borders "without let or hindrance."

furthermore indigenous peoples had the right to cross carrying not only their personal effects, but also "goods in bales," the treaty said.

arguments about what constitutes "goods in bales" have abounded ever since. The expression was thought to recognize the livelihood of the Mohawk nation, who were - & remain - primarily a trading nation.

time & again, lawyers for mohawk traders have invoked the "goods in bales" provisions to protect mohawk traders bringing all kinds of goods into canada, including the infamous cigarette & liquor products that are custom manufactured for indigenous export on the US side of the border.

Tyendinaga is an ontario mohawk reserve. It falls under the protection of the "goods in bales" exemption.

most goods for sale on mohawk reserves are exempt from both customs duties if they are imported & also from federal & provincial sales taxes, no matter the provenance. There are plenty of non-natives who shop on reserves for exactly that reason. They're buying far more than just cigarettes & alcohol or - lately - weed.

then there are the hundreds upon hundreds of online gambling casinos all managed by one large computer park in kahnewake, a mohawk reserve across the st-lawrence river from montreal. It's said to be the world's biggest assembly of virtual gaming.

ottawa & the provincial gummints have known about all of the ^^ above for many years, indeed decades. The RCMP, the Surete du Quebec & the Ontario Provincial Police know about all of the ^^ above. There's no way ottawa overlooked any of the ^^ above.


----------



## OnlyMyOpinion

Thanks for the history lesson Humble, not that any of it was news to me.
You seem to think I have an issue with our enterprising indigenous - but I don't.
My point was that the government should have simpy legalized pot, period. Instead they decided to try to regulate its growing and sale, and surprise, surprise - tax it.
Meanwhile, on the black market and the res you can buy it for 1/3 to 1/2 the 'legal' price.
No, this was an epic fail by Trudeau and the Liberal government.


----------



## humble_pie

OnlyMyOpinion said:


> You seem to think I have an issue with our enterprising indigenous - but I don't.
> My point was that the government should have simpy legalized pot, period. Instead they decided to try to regulate its growing and sale, and surprise, surprise - tax it.
> Meanwhile, on the black market and the res you can buy it for 1/3 to 1/2 the 'legal' price.
> No, this was an epic fail by Trudeau and the Liberal government.



in post 189 you stated that you do have an issue with cannabis sales on reserves. In fact you said these are "the next big pot issue" which "the Libs seem to have missed."

my view is the opposite of yours. My view is that pot sales on reserves are very well-known to every level of government, as are the sales of all kinds of gray market product that take place year-round on some reserves. Further, my view is that such sales have been well known for decades. They are something of a yawn. 

they're known to conservative federal leaders, they're known to liberal federal leaders, they're known to provincial governments of every political stripe. 

why would you suddenly be trying to twist this into another attack on the current Liberal government? 

it looks far-fetched to me. About as far-fetched as making rude remarks about corn flakes.

.


----------



## james4beach

james4beach said:


> The sector has been steadily weakening since I suggested my friend sell HMMJ and lock in the gains. Also look at the volume on HMMJ, it's basically gone.
> 
> I interpret that as a sign that investment hype and general enthusiasm has disappeared from this bubble. New money has stopped flowing in, and the sector has been sideways (going nowhere) since early 2018 as shown here: http://schrts.co/fpQpCVbv
> 
> I'm tempted to say that this party is over with peak prices occurring back in October 2018... but it's always hard to predict when bubbles end. I also think the pot bubble is linked to the bitcoin bubble, as both were popular with novice retail investors who were first time investors. For both, the big run-up was in 2017 and then both have gone nowhere since Jan 2018.


I posted that on 2019-07-29 and I think it increasingly looks like the party has ended. HMMJ is down 30% since that point and you don't hear many greedy observations about pot stocks any more. The last time I remember hearing pot stock excitement was about TLRY in late 2018. (That stock is now down 90% since its peak)

This was a neat little case study in bubbles. Here's the HMMJ chart since inception in 2017: http://schrts.co/sRDzIyRX

Even if someone identified the "hot theme" early enough, I see only about 12 months where someone could have traded it long. That's just not a very large time window to get in & out.

Most people got in too late. Look at the volume on HMMJ for an indication of popularity; the volume really hit around the start of 2018, when Bay Street and Wall Street started making a big deal of all this. Using HMMJ as a proxy for pot investment, that means most of the public got in around the $16 to $21 mark -- way too late.

As you can see from this thread history, 2019-04-05 is when I suggested that my friend sells their position and gets out. I told her that the sector isn't showing the kind of oomph that justifies staying in. She had actually doubled her money at that point; really proud of myself for helping her get out right near the peak.
https://www.canadianmoneyforum.com/...ana-ETF-HMMJ?p=2011278&viewfull=1#post2011278

Early in this bubble I was hoping that it would run much longer, maybe a multi-year, insane bubble. But I think it fizzled out.


----------



## james4beach

Even thought this is a bad sector to invest in, I wanted to point to this enormous distribution yield.

HMMJ shows a quarterly distribution of roughly 0.25 a share. I think that's about 10% yield on HMMJ.

These distributions being paid are the securities lending revenue provided by the short sellers who are shorting the living daylights out of pot stocks!

Though I would never buy any of these, I think it's noteworthy that anyone who *wants* to hold marijuana stocks is better off using HMMJ than the individual stocks. If you hold the stocks at your brokerage, your broker will lend out the shares to the short sellers, but compensate you with nothing. The broker keeps the securities lending revenue.

But if you hold HMMJ instead, Horizons will pass that revenue on to you. And it's pretty substantial right now.

OTOH this means very little in reality because (assuming a somewhat efficient market), the level of short selling and resulting securities lending revenue is going to match up with the risk of investing in the sector. If the prices reach a bottom and stabilize, making the sector more viable, the short selling (and this yield) would subside.


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## Beaver101

^ What about the possibility of a distribution cut?


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## AltaRed

Beaver101 said:


> ^ What about the possibility of a distribution cut?


There is no such thing as an ETF distribution cut. Distributions vary on a regular basis as cash moves through an ETF. No holder of an ETF should ever assume distributions are constant, albeit bond ETFs tend to have less variability in distributions and any that return capital as part of their design.


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## james4beach

AltaRed said:


> There is no such thing as an ETF distribution cut. Distributions vary on a regular basis as cash moves through an ETF. No holder of an ETF should ever assume distributions are constant, albeit bond ETFs tend to have less variability in distributions and any that return capital as part of their design.


Unfortunately people do make assumptions about distributions paid out by funds. A good example of this was XTR, which was actually the first diversified balanced fund ETF in Canada that came long before VBAL. This is after the income trust days; they turned XTR into a 60/40 fund of general equities + bonds.

XTR was designed to pay out regular 'monthly income' so it got people used to the idea of a steady X cents each month. Later, when their underlying couldn't keep up with it, iShares cut the distribution. I'm sure many seniors who had come to expect the regular income were not happy about this.

The same thing happened with many "monthly income" mutual funds, when interest rates began to plummet. A good reason to take the total return view of investing instead of becoming dependent on an expectation of distribution regularity.


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## Beaver101

^ So what's the point of your post #194? I'm getting conflicting messages within that post.


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## james4beach

Beaver101 said:


> ^ So what's the point of your post #194? I'm getting conflicting messages within that post.


My points were:

1. it's interesting that the high distribution comes from securities lending revenue. This is unique in the whole ETF industry, I've never seen a 10% yield due to securities lending anywhere else. In other words, it's a first. This is an observation about something unusual and novel happening.

2. due to this, someone who likes MJ stocks (I don't!!) is likely better off holding the ETF. It will give them a performance boost versus holding the stocks individually, due to this securities lending revenue. As long as it continues, anyway.


I don't hold any pot stocks and would discourage anyone from buying them. But if someone really wants to invest in them, it seems to me they are better off in HMMJ to at least get this revenue from short sellers.


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## AltaRed

My view....

1. The cannabis sector is way too immature to take speculative bets on any single company. The winners are not known in advance
2. The cannabis 'demand' market is about to materialize with the opening of more stores (no one forecasted how inept and incompetent BC and ON would be in licensing retail outlets), and the introduction of edibles.
3. HMMJ is now below the low end of my forecast of $10-12 made circa 12-18? months ago and may be bottoming within 4 weeks, if for nothing else than tax loss selling season. Maybe $8? or $7?
4. One is sort of being paid to wait....for now with the high yield...while it lasts. If James' comment is true, shorting will disappear by mid-2020 and yield will fall off in a big way.

Added... And no, I am not going to make a speculative bet (even if what I wrote could suggest a calculated bet).


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## james4beach

That makes sense AltaRed. It may not be a crazy idea to start easing into a long position. One could do the same in energy; both HMMJ and XEG have really been beaten up.

HMMJ is truly crashing these days, with some nice big moves down. Perhaps a few more weeks like this (absolute crash mode) into year end, could present a nice opportunity to open a _small_ long position. I also recommend monitoring its AUM. You want to see capitulation and investors fleeing in disgust.

With XEG, the pain and disgust (and truckers rallies) are already there, so it may actually be time to buy.

Personally, I don't have any room for sector-specific bets in my asset allocation so I won't be doing anything with either, despite the temptation. I have sometimes thought that perhaps I should start a speculative strategy where I do this kind of thing, but I already have too many strategies in play right now. Sticking with my existing plans, I will not do any sector speculation.


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## doctrine

Canopy Growth grew 80,000 kilograms of weed in the last 6 months worth close to $500M and barely sold 25% of it. That would be a disaster in most industries. But they also have $2.7B in cash, almost 40% of their market cap, so if they show a trend towards becoming cash flow and EBITDA positive, that would be when investors start to value the stock higher.


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## AltaRed

james4beach said:


> With XEG, the pain and disgust (and truckers rallies) are already there, so it may actually be time to buy.


I think it is too early for XEG but XEG isn't going to respond the same way as HMMJ when SU and CNQ make up almost 54% of the ETF. They are holding their own and upside will be limited to perhaps 20%. Even CVE, IMO and HSE with their refining components won't do a double. Its the VET, BTE, CPG and other constituents of the ETF that are still sliding and could, in theory, go bankrupt before new pipeline capacity comes on in late 2021 or early 2022. Perhaps XEG gets back to circa $13-15 eventually from about $9 today. Is the potential for a 50% gain long term worth the risk starting an entry position today?


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## james4beach

AltaRed said:


> I think it is too early for XEG but XEG isn't going to respond the same way as HMMJ when SU and CNQ make up almost 54% of the ETF. They are holding their own and upside will be limited to perhaps 20%. Even CVE, IMO and HSE with their refining components won't do a double. Its the VET, BTE, CPG and other constituents of the ETF that are still sliding and could, in theory, go bankrupt before new pipeline capacity comes on in late 2021 or early 2022. Perhaps XEG gets back to circa $13-15 eventually from about $9 today. Is the potential for a 50% gain long term worth the risk starting an entry position today?


That's a good point about the heavy weights that dominate XEG. And bottom fishing is a very dangerous game.

Counter-argument: think about tech (XIT) for a moment. Until just a few years ago, XIT actually had a similar profile: horrible recent returns. Just about nil return back to inception. Chronically poor performer. Dominated by just a couple heavy weights (NT initially, later RIM).

XIT became very unpopular, out of favour. "Why would anyone hold this thing that's basically a bet on RIM?" And then bam... the tech rally started. Even though it used to be lopsided in just one or two heavy constituents, it gained more large caps, became a bit better diversified, and has performed spectacularly. The nice thing about sector indices is that they actually do keep up, gaining more holdings, as money flows into a sector.

Today, XIT is the top performer. It's actually pretty even weight in 4 large caps, much better than it used to be. And nobody invests in it by the way. 10 year CAGR = 15.3% and yet it was so hated, that everyone got out long ago. Even the 15 year CAGR is better than the broad market.

I'm saying that because I don't think someone should dismiss XEG just because it's currently overweight in two companies. Indexes change over time.

Personally I am just sticking with my policy, which is 20% energy within my Canadian equities. That's a constant allocation (equal sector weights) and it means I will likely buy some more SU and ENB in December to get back to my equal sector weight. That's as far as I'm going.


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## AltaRed

Perhaps. I have trouble seeing what could materially change in XEG composition to make a difference. There is no 'O&G' company, e.g. ECA, CVE, IMO, HSE, that could come out of nowhere to make a material difference to the 2 heavyweights. Capital intensive physical assets have to come from somewhere. That said, if there is a chance of a 50% uplift in 5 years, that is a pretty good CAGR.

Maybe I should take a bet on HMMJ after all before Dec 20th....if it maybe hits $8. Think there is room for a potential double in 5 years if my starting point is $8 or so.


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## james4beach

Geez, I'm tempted to as well. AltaRed how do you "fit" this kind of thing into your investment policy / AA ?

I'm happy to add new things into my policy but I want a framework that prevents me from doing too much ad hoc stuff. Maybe it's time for me to create a speculative, non-AA portfolio.


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## james4beach

Just for tracking the pain:

Net assets: 445,379,440
Outstanding Shares: 48,024,210


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## AltaRed

james4beach said:


> Geez, I'm tempted to as well. AltaRed how do you "fit" this kind of thing into your investment policy / AA ?


I wouldn't try to it in at all. It would be 'play' money not unlike going on a river cruise. FWIW, it is trading at $8.93 at the moment, down from $10.80 or so 5 trading days ago, albeit that includes a one day major hit. Still, one may not have to wait a month for it to go below $8.

As for share count, I wonder how many shares were out at the peak just over a year ago. Might be interesting to guess how many ETF units might have to be destroyed before it bottoms (destruction adds to price depression).

Added: 44.89 million units as of Dec 31, 2018 per annual report, so interestingly, still above year end 2018.


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## james4beach

Yes just noticed that as well. And earlier in this thread #137 here were unit counts through 2018
Jun 8 - 11.8 million
Nov 7 - 17.3 million
Nov 28 - 20.8 million
Dec 29 - 26.3 million
Jan 5 - 32.2 million
Jan 24 - 36.1 million
Apr 21 - 41.4 million

So based on this, and the current crashy behaviour, I would guess it might be better to wait a little for more redemptions.


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## doctrine

AltaRed said:


> I think it is too early for XEG but XEG isn't going to respond the same way as HMMJ when SU and CNQ make up almost 54% of the ETF. They are holding their own and upside will be limited to perhaps 20%. Even CVE, IMO and HSE with their refining components won't do a double. Its the VET, BTE, CPG and other constituents of the ETF that are still sliding and could, in theory, go bankrupt before new pipeline capacity comes on in late 2021 or early 2022. Perhaps XEG gets back to circa $13-15 eventually from about $9 today. Is the potential for a 50% gain long term worth the risk starting an entry position today?


It's those mid-caps that could go bankrupt, yes. Although they could double, triple, or even quadruple. The WCPs, TOGs, SGYs, ARXs, etc. If there was a real big spike in oil to say $75-80, XEG might go up 25-50% or more, but the small companies would be easy 100% doubles and maybe 200%. Even VET was 50% higher just a few months ago. 

In any case, those are the type of companies that I'm trading when I do jump into oil on occasion. And oil often bottoms around the mid-late fall.


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## nobleea

doctrine said:


> It's those mid-caps that could go bankrupt, yes. Although they could double, triple, or even quadruple. The WCPs, TOGs, SGYs, ARXs, etc. If there was a real big spike in oil to say $75-80, XEG might go up 25-50% or more, but the small companies would be easy 100% doubles and maybe 200%. Even VET was 50% higher just a few months ago.
> 
> In any case, those are the type of companies that I'm trading when I do jump into oil on occasion. And oil often bottoms around the mid-late fall.


VET has far more international exposure than the others you mention. Something like 50% IIRC. pipeline capacity (or lack thereof) affects them far less than the others you mentioned.


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## AltaRed

nobleea said:


> VET has far more international exposure than the others you mention. Something like 50% IIRC. pipeline capacity (or lack thereof) affects them far less than the others you mentioned.


That is true, but IIRC, VET damaged themselves by buying AB production that is held hostage by pipeline capacity constraints. That said, I agree VET would be affected less than the mid-caps mentioned by Doctrine. I take no issue with Doctrine's comments and thoughts on the mid-caps. At this point, they are all hanging on and stock prices will vary widely with changes in cash flow due to oil price changes. Assuming no change in WCSB differentials, a drop to $45-50 WTI could kill some of these, while a sustained price above $60 WTI will allow them to jump in price. The Keystone break caused differentials to widen albeit the effect is, will be, short lived. These mid-caps as well as the small caps are all very highly sensitive to cash flow margin. PGF couldn't take it any more so they essentially are giving themselves away rather than ultimately declaring insolvency.

I think money can indeed be made playing 'trades' in this area and Doctrine may have the cajoles to do so, but it is not for weak stomachs. I think I could play it too but I don't want too. I have no desire (and no need) to play when my portfolio already moves up/down every trading day more than I'd make on speculative bets. I imagine Doctrine might keep an ear open to what Eric Nuttal and Josef Schachter do when they spill their guts on BNN, but neither of them have called it right for years now. They are hopeless optimists thinking the bull market in oils started as long ago as 2016 (I think). In any event, there is going to be a lot more pain in mid-cap oils for another year or two UNLESS WTI can sustain itself above $60, and my view is that is very questionable despite what Eric and Josef say. With global growth slowing and considerable new oil coming on stream in 2020, it will be up to Saudi and Russia to discipline themselves to keep oil above $60. The good news is that most OPEC producers and Russia cannot sustain their economies with $50 oil, so they will likely cut back as necessary to try to keep oil prices in the $60 range +/- $5.


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## doctrine

nobleea said:


> VET has far more international exposure than the others you mention. Something like 50% IIRC. pipeline capacity (or lack thereof) affects them far less than the others you mentioned.


VET does have higher international exposure and thus higher prices. It also has more debt and has a payout ratio of roughly double of those others. 

There is a lot of potential positive catalysts in the future. Line 3, Line 5, Keystone, TMX, two or three or all could happen in the next 2-3 years. The oil rig count is falling off a cliff in North America at the same time. The last major growth projects are just coming online now with very few new ones planned. Oil consumption might grow for another 20 years. 

On the flip side, Venezula and Iran are nearly fully offline and out of export markets. If they came back, there could be a flood. Russia and Saudi Arabia also have spare capacity or at least capacity to invest in growth.

Hard to say. I've traded 2-3 times this year with some good success. Currently out but may come back in, maybe in the next 3-4 weeks. We'll see. There have only been a few new lows in the last few weeks, most stocks bottomed in September.


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## like_to_retire

james4beach said:


> Geez, I'm tempted to as well. AltaRed how do you "fit" this kind of thing into your investment policy / AA ?
> 
> I'm happy to add new things into my policy but I want a framework that prevents me from doing too much ad hoc stuff. Maybe it's time for me to create a speculative, non-AA portfolio.


I notice there's a few new TSX Indexes beginning Monday.

Maybe there will be some new Index ETF's for the Cannabis sector soon.

_"The Toronto Stock Exchange (TSX) announced on Friday that two of its three new indexes — the *S&P/MX International Cannabis Index* and the S&P/TSX Small Cap Select Index — will be released on Nov. 18.

A third new index, the *S&P/TSX Cannabis Index*, will debut at a future date that has yet to be announced"._

ltr


----------



## doctrine

With the drop on Friday, cannabis stocks are now below where I bought them for a trade almost exactly 2 years ago. They are down for exactly the reasons I was sure I was not going to hang around in the sector, i.e. insanely ridiculous oversupply and plummeting prices. It was nice to ride WEED from $20 to $40, but with intraday swings of 20-30%, it was just too much volatility. Of course cannabis stocks continued upwards, but it was inevitable they were going to come down. I believe all of these companies are going to go as low as potentially 50% of book value, which is a common place for distressed stocks in distressed industries to trade (if not lower). Some of these companies have large cash piles (WEED at $2.7B, almost 40% of book), but I believe that will have to be discounted 50% as they will almost certainly burn through half of that in the next year. So, potentially another 30-50% downside for the major companies. Maybe they would be worth a look then.


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## james4beach

Another nice big HMMJ crash today, down 5.7% and shares have been redeemed as well (that figure comes with a lag)

Outstanding Shares: 47,849,210

Appears to be mostly related to ACB totally crashing (down 16% today, or 30% over two days).


----------



## junior minor

The top five Canadian cannabis stocks have seen huge losses.
The Canadian government fails to open up enough stores to meet the demand.

There simply aren’t enough stores. Provinces representing 60% of the Canadian population have only 10% of the stores. So, if there is nowhere to sell consumer products, it’s very difficult to have the type of revenues that everybody expected. But, the positive news, that’s an easy problem to fix. The governments have acknowledged they need more stores. We now have enough supply to allow them to do that and hopefully, we will see that fixed.

https://www.ccn.com/canadian-cannabis-stocks-plummet-government-struggles-demand/

With regulation change, at least in some provinces, they will also lose some of their crowd and buyers. I decided to quit when this became very mainstream. Was also told that there were lots more pesticide in those than I thought at first. 

https://www.theglobeandmail.com/new...-in-medical-marijuana-supply/article33443887/

A controversial pesticide banned in Canada has been discovered in products sold by a federally licensed medical marijuana producer, The Globe and Mail has learned, but neither the company nor Health Canada have informed the public.

Myclobutanil, a chemical that is also prohibited for use on legal cannabis in Colorado, Washington and Oregon because of health concerns, was found in product recently recalled by Mettrum Ltd., a Toronto-based medical marijuana company.


----------



## AltaRed

The recent uplift over the past week has also resulted in additional HMMJ units, to 48,199,210, so a slight uptick in new money. Keeping myself amused watching this every 2-3 days.


----------



## Jericho

junior minor said:


> The top five Canadian cannabis stocks have seen huge losses.
> The Canadian government fails to open up enough stores to meet the demand.
> 
> There simply aren’t enough stores. Provinces representing 60% of the Canadian population have only 10% of the stores. So, if there is nowhere to sell consumer products, it’s very difficult to have the type of revenues that everybody expected. But, the positive news, that’s an easy problem to fix. The governments have acknowledged they need more stores. We now have enough supply to allow them to do that and hopefully, we will see that fixed.
> 
> https://www.ccn.com/canadian-cannabis-stocks-plummet-government-struggles-demand/
> 
> With regulation change, at least in some provinces, they will also lose some of their crowd and buyers. I decided to quit when this became very mainstream. Was also told that there were lots more pesticide in those than I thought at first.
> 
> https://www.theglobeandmail.com/new...-in-medical-marijuana-supply/article33443887/
> 
> A controversial pesticide banned in Canada has been discovered in products sold by a federally licensed medical marijuana producer, The Globe and Mail has learned, but neither the company nor Health Canada have informed the public.
> 
> Myclobutanil, a chemical that is also prohibited for use on legal cannabis in Colorado, Washington and Oregon because of health concerns, was found in product recently recalled by Mettrum Ltd., a Toronto-based medical marijuana company.


Not too sure if I agree with parts of that. In Alberta, the stores are rarely sold out. Prices are through the roof. 10-15$ a gram. I also don't believe that hoardes of folks are lining up to smoke for the first time. People smoked before legalization. I also think cannabis consumers (new and experienced) have quickly realized that retail pot is a waste of money, compared to methods to legally obtain, such as growing your own, or getting a prescription and getting discount pot (and tax breaks). -- And I'm sure some folks are still buying illegal pot as well.

There was a boom of sales during the opening weeks of legalization, however people have since realized you can do your own grow for well under $1000 and you can produce 0.5 - 1 pound every 12-16 weeks (226g - 454g). With modern lighting, there is far less power consumption, also giving more savings. If you do the math, it makes no sense to buy at a recreational store.


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## james4beach

Share price still falling, *a new all time low*. And the yield is now 10% or something? Today HMMJ went ex dividend with its _massive_, bizarre securities lending dividend (I don't think Canada has ever seen anything like this before)

According to stockcharts, previous historic low was $8.21 in June 2017. So now HMMJ is at a historic new all time low.

Price: $8.18
Yield: roughly 11% [as long as short sellers still want to borrow shares]
Outstanding Shares: 49,749,210

Interestingly, that's net new inflows... new units... since a month ago and even since a few weeks ago. People are buying the falling knife.


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## james4beach

Oh dammit, I just texted a friend about the insane yield, and they responded by asking if they should buy it instead of a GIC.

Just to clarify: NO, do not buy this purely for the yield! It's more dangerous than a GIC and the yield is not assured. It could disappear.


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## junior minor

https://www.cantechletter.com/2019/12/many-pot-companies-will-die-in-2020-this-exec-says/ 

Hopefully this will carry well over this year. I'm finding this very interesting in the course of current event although I do believe it could lead to some losses that could prove disastrous for the unwise investors that placed too much money into that. Namely the ones in charge of such companies. The Raven Quest Biomed itself is getting lots of coverage in the media for having issues with their roto gro system and I'm not entirely sure it they will survive themselves unless this is just planned coverage for them to thrive further. Time will tell. 

“We’re just in Year Two and we have some 300 licensed producers and some of them are going to make bad choices when faced with either shutting down or trying to find ways to get revenue in the company. Unfortunately, if they’re led by people who really don’t understand the regulations, they’re going to get convinced they can do something that’s outside of the regulations. Whether they get caught near term, over time these players will get caught,” he said.



theglobeandmail.com/investing/markets/inside-the-market/article-pot-stocks-continue-freefall-as-cannabis-etf-hits-new-lows/
Pot investors continue to feel the pain of an awful 2019, as the pioneering cannabis exchange-traded fund, which once commanded more than $1-billion of investors’ money, fell to its lowest point ever.


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## AltaRed

james4beach said:


> Interestingly, that's net new inflows... new units... since a month ago and even since a few weeks ago. People are buying the falling knife.


Not necessarily surprising there are net positive creations. Could very well be all those individual investors getting rid of their individual holdings in pot stocks for tax loss harvesting but staying in the game with a swap over to this ETF. Plus of course, bottom feeders now entering the game. I could potentially be persuaded if this fell into the $7+ range.

Like most other things, people were greedy in this space looking for multi-baggers, failing to recognize this was like the dotcom bust of 2000. Too many players throwing money everywhere to get in on the gold rush. Speaking of gold, all those people now rushing for 10 baggers in speculative gold minors. The human psyche never seems to change.


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## junior minor

AltaRed, although I didn't invest in the Y2K rush, and didn't invest in the recent marijuana boom, I think it might be comparable. This website seems to tell that investing with Tangerine isn'T a good idea https://personalfinancecanada.ca/why-you-should-avoid-tangerine-investment-funds/ and would rather suggest questrade. I have yet to make up my mind on this although I think the important point not to forget is that it is an actual bank rather than just a website, so there is a protection for the long term when comparing costs. https://youngandthrifty.ca/tangerine-investment-funds-vs-robo-advisors/ this is more descriptive.


----------



## junior minor

I'm also going to post this article from yesterday that mentions that Marijuana stores in Ontario are opening the market for edibles. This was based on a decision released earlier this year, and although it might be interesting to start with, what it will lead to has yet to be figured. 

https://globalnews.ca/news/6362213/ontario-cannabis-store-edibles-vapes-tea-retail-shops/
https://www.theglobeandmail.com/new...-in-medical-marijuana-supply/article33443887/

Not to mention all those heavy metals in the water.


----------



## junior minor

yet that's just the tip of the iceberg. 
I read in the epoch times that the ''organic'' certification didn't take this in consideration (heavy metal counts) . I actually quit drinking soy milk because, although touted as ''healthy'' and ''locally grown'', I'm pretty darn sure that most of the seeds were bought overseas. Just like the tomatoes in Heinz (French keeps it Canadian) Ketchup or the beans in ''a canadian favorite''. Of course most of this makes the stock price go up. I know this is not related in anyway whatsoever to the Marijuana ETF thing, yet it is to the stock market in general and since most of us are trying to keep our health so we may enjoy our wealth, well, it seemed worthy to share. 

https://www.farwestchina.com/blog/your-ketchup-probably-came-from-xinjiang/

https://www.theepochtimes.com/lax-standards-allow-gmos-in-organic-food_1240572.html
For many consumers, paying a pretty penny more for products labeled “100% Organic” with USDA certification, is worth it for the peace of mind and certainty that they and their families will not be eating genetically modified organisms.



https://www.theepochtimes.com/5-reasons-you-shouldnt-trust-organic-from-china_1612468.html

Since organic products sell at higher prices, food producers, and not just ones in China, may tack fraudulent “organic” labels on their products for a higher profit. As issues arise in all levels of the supply chain, Chinese authorities and the USDA find it hard to find all the violations. A 2010 USDA report said some producers purposefully avoid the annual certificate renewal process and continued using expired organic labels in order to reduce costs, while other retailers simply mislabeled conventional products as organic.

https://www.naturalnews.com/039195_organic_foods_China_pollution_nightmare.html
Buying from China means higher profit
Here's the dirty little secret of the natural products industry... and yes, the "dirty" is quite literal in this case: Raw materials from China are cheap! Across the board, raw materials (foods, superfoods, supplements) from China are about 1/4th the cost of materials grown in North America or Europe.

This means getting your ingredients from China grants your product a lot more profit in the marketplace. For those selling through Whole Foods -- whose product shelves are littered with ingredients made in China -- this profit margin is essential to economic survival.

If you're buying a superfood powder sold at Whole Foods and paying $50 at retail, the actual ingredient cost that goes into that superfood canister is often as little as $5. So sourcing those materials from China is crucial to having the margins. Whole Foods might only pay your company $22 or so for a product they sell at $50. So your company has to buy the materials, pay for shipping, insurance, labor, packaging, formulations and everything else and still somehow make a profit to stay in business. So you source from China. You make a really nice-looking label, you get it "certified organic" with a nice USDA logo on it, and you sell it to Whole Foods which adds another layer of legitimacy to the product.

But inside the bottle, there could be mercury hiding in there. Or pharmaceutical residues. Or pesticide residues. Or just about anything, including melamine.

Now, obviously Whole Foods has a level of quality control in place, and they do require C of A's for products they carry. But China is expert at FAKING these documents and tricking importers, formulators and manufacturers.


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## junior minor

*and last yet certainly not least, the medication. There's no easy way out of this*

*I'm not going to quote anything regarding fentanyl overdose although this was partly a pointer, I suppose(in the news)

*

The Food and Drug Administration claims pharmaceutical ingredients from China are safe. Don’t believe it. The agency has a long history of failing to oversee foreign drug sources, according to scathing reports from the federal Government Accountability Office.

The GAO found that the FDA inspects Chinese drug manufacturing plants infrequently, at best, and some may never get inspected. In the United States, pharmaceutical plants are inspected every two years.

During the last 13 months, the FDA has had to announce more than 50 recalls of blood pressure medications because the active ingredient valsartan contained jet-fuel contaminants estimated to cause cancer in one out of every 8,000 pill takers. Who supplies it? China.

The FDA’s Janet Woodcock advised that it’s less risky to take the contaminated pills than to stop taking blood pressure medication altogether. Yikes. Patients shouldn’t have to face that choice.


Article from December 27th
https://www.capitalgazette.com/opin...0191227-wc3wids2bjbuteg4wunksnr6xm-story.html

This past fall legislation was finally introduced that will require DOD to purchase only American made medicines (including only-U.S. produced raw materials) for use by our military. The bill would also require DoD to identify vulnerabilities caused by our current dependence on drugs from China.

The seriousness of the problem with pharmaceuticals is documented by Rosemary Gibson and Janardan Prasad Singh in their book, “China Rx: Exposing the Risks of America’s Dependence on China for Medicine.” The authors provide a chilling insight into China’s role in the prescription and over-the-counter drug market.

Gibson and Singh provide numerous examples of how the Chinese control the generic prescription drug market. Each of their examples evokes a “How in the world have we allowed this to happen?” type of response.

*Here is a quote from the actual book. *

without question, if China stopped exporting ingredients, within months worldwide pharmacies would be pretty empty
https://books.google.ca/books?id=Xu....&hl=fr&pg=PP1#v=onepage&q=portuguese&f=false


----------



## junior minor

And last, yet certainly not least, here's to the ''good old days'' of the past. When... 

As reported by the American Herbalists Guild, in 1987 about 85 percent of modern drugs were derived from plants. Today, only 15 percent has a plant origin. Herbal medicines are prepared from plants or plant parts which contain hundreds to thousands of other compounds.
https://www.theartofhealing.com.au/herbal_medicine.html
_A pharmacist once told me that medications made from herbs cannot receive grants and bursaries and no matter how much research is done on the matter, you can't coin something from mother nature. She can be trusted though. I regularly have a little pep talk with my local herborist _

Here are some solutions and alternatives that don't cost that much and can prevent more pain. Enjoy
https://www.americanherbalistsguild...ierra_michael_-_hypertension_as_a_symptom.pdf
It mentions this very interestin herb that is not some 2 grands per month hypertension lowering pill. 
https://www.sciencedirect.com/topic...d-pharmaceutical-science/rauvolfia-serpentina


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## james4beach

HMMJ briefly fell to a new all time low today before rebounding and ending slightly higher than its all time low.

Also, by my calculation the yield is now over 12%

Outstanding Shares: 50,799,210


----------



## AltaRed

I have an Alert set at $7.60 just in case it gets there. I might consider a 'flyer' at, or just below, that level. No magic on the number other than I want to be certain of capitulation before entering. If the price does not get there, I don't give a shite about HMMJ or the sector overall. It is still a speculative game with more than half the 300 companies in the space likely to go bankrupt within the next year or so.


----------



## james4beach

A new all time low today for HMMJ at 7.86
... might hit AltaRed's price any day now

Outstanding Shares: 52,210,180

That's pretty significant net new purchases while the price plummets. People trying to catch a falling knife? Hope springs eternal.


----------



## Beaver101

^ Maybe Horizons will create an inverse HMMJ?


----------



## AltaRed

Given the covid crisis, some of the old conversations got lost. Remember this one? Decided to take a look given the recent announcements about closing of production facilities and taking big write offs. I am surprised to find there are *54,104,270* shares outstanding, an increase from J4B's last post. The sucker has grown! 

However, price currently at $6.95 certainly is nothing to write home about. It hit a low of $4.39 in March. A long ways from $25 in the heyday of speculation.The bloom is off that rose.


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## james4beach

AltaRed said:


> Given the covid crisis, some of the old conversations got lost. Remember this one? Decided to take a look given the recent announcements about closing of production facilities and taking big write offs. I am surprised to find there are *54,104,270* shares outstanding, an increase from J4B's last post. The sucker has grown!


Thanks for the update. Very interesting, so investors have made net new purchases of HMMJ over these months. I would not have expected that.


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## james4beach

I'm surprised that this thing hasn't been rallying at all during this melt-up in the stock market. I was watching to see if HMMJ can get above its 200 day moving average (which might indicate that it's stabilizing and that the sell-off is over) but this still hasn't happened!

Really horrible performance and horrible technicals here. Not only is it failing to rally, but the low volume also suggests to me that people don't care (aren't jazzed) about this sector. See the chart below, showing the 200 day moving average line (in blue) and the daily volume below.

What happened to all that bubble greed? Amazing how once-hot bubble areas can be quickly forgotten.


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## MrBlackhill

I've been curious about the marijuana industry. I thought it could've rise like tobacco industry once did. But times have changed since then. Canada hit hard against smoking will all the advertisement on tobacco products and tobacco products being hidden, etc. I don't recall when did it started, but it worked. Almost nobody smokes now in Canada when compared to European countries.

And I guess there are less marijuana smokers than tobacco smokers. And medical marijuana is certainly an even smaller market.

Maybe I'm totally wrong, I really don't know anything about this market.


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## Money172375

During covid, I found out more than a few of my neighbours are growing their own plants. These are folks who came of age in the 60s.


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## like_to_retire

Money172375 said:


> During covid, I found out more than a few of my neighbours are growing their own plants. These are folks who came of age in the 60s.


Man, those plants stink.

It fills my back yard from my neighbors plants with the smell. 

I actually kinda like it. Reminds me of my youth.

ltr


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## james4beach

like_to_retire said:


> Man, those plants stink.
> 
> It fills my back yard from my neighbors plants with the smell.
> 
> I actually kinda like it. Reminds me of my youth.


I don't mind the smell too much, but at my apartment building when I leave my balcony door open, I usually end up smelling MJ from one of the neighbours. Sometimes, all day.

Does anyone know if second/third hand smoke like that (diffused but continuous) could get me intoxicated? It concerns me because I'm trying to do work, and need to be sharp!


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## like_to_retire

james4beach said:


> Does anyone know if second/third hand smoke like that (diffused but continuous) could get me intoxicated? It concerns me because I'm trying to do work, and need to be sharp!


Maybe it would promote new and innovative thinking. Your employer would be thrilled. 

_"The board says that they have noticed recently that James4beach is one of our top idea men with fresh, inventive, ingenious, groundbreaking, and revolutionary suggestions that will make us millions"._

Let's promote this guy.

ltr


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## MrBlackhill

james4beach said:


> Does anyone know if second/third hand smoke like that (diffused but continuous) could get me intoxicated? It concerns me because I'm trying to do work, and need to be sharp!


Most likely not. You'd have to be in the same unventilated & confined room of people smoking high-THC marijuana.



like_to_retire said:


> Maybe it would promote new and innovative thinking. Your employer would be thrilled.


Absolutely!


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## james4beach

MrBlackhill said:


> Most likely not. You'd have to be in the same unventilated & confined room of people smoking high-THC marijuana.
> 
> Absolutely!


Thanks guys. Maybe I've already inhaled too much. See: Daytrading experiment


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## Money172375

Nice little run lately. I put some play money in this. Up 20%.


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## james4beach

Money172375 said:


> Nice little run lately. I put some play money in this. Up 20%.


Wow thanks I didn't even notice this has started running again.

There really seem to be several "mania" themes happening simultaneously. There's electric vehicles/batteries, genomics, and marijuana ... all rallying insanely at the same time.

If there is a belief that central banks will keep fuelling easy money and risk taking, and if HMMJ only started rallying recently, then it's possible it has a ton of upside.


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## Money172375

james4beach said:


> Wow thanks I didn't even notice this has started running again.
> 
> There really seem to be several "mania" themes happening simultaneously. There's electric vehicles/batteries, genomics, and marijuana ... all rallying insanely at the same time.
> 
> If there is a belief that central banks will keep fuelling easy money and risk taking, and if HMMJ only started rallying recently, then it's possible it has a ton of upside.


I think some US states are moving to legalizing. NY?


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## james4beach

Money172375 said:


> I think some US states are moving to legalizing. NY?


My theory is that it has nothing to do with news or underlying business conditions. I think it has much more to do with a general market mania which is emerging.

If you look at several extremely hot things (Bitcoin ETFs, electric vehicle stocks like TSLA, FCEL, and ARKK) you'll see that enthusiasm for all of them has increased significantly in November and has been accelerating since.

HMMJ shows the same pattern. And it has a history of coinciding with Bitcoin strength during a previous bubble period, so I believe HMMJ (like the things above I mentioned) are all part of a general market mania.


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## MrBlackhill

james4beach said:


> My theory is that it has nothing to do with news or underlying business conditions. I think it has much more to do with a general market mania which is emerging.
> 
> If you look at several extremely hot things (Bitcoin ETFs, electric vehicle stocks like TSLA, FCEL, and ARKK) you'll see that enthusiasm for all of them has increased significantly in November and has been accelerating since.
> 
> HMMJ shows the same pattern. And it has a history of coinciding with Bitcoin strength during a previous bubble period, so I believe HMMJ (like the things above I mentioned) are all part of a general market mania.


Better say that everything is hot.

EV? Hot
Cryptocurrencies? Hot
Blockchain? Hot
Clean energy? Hot
Semiconductors? Hot
Telemedicine? Hot
Genomics? Hot
Work from home? Hot
Cloud computing? Hot
Cybersecurity? Hot
Online entertainment? Hot
Advertisement? Hot


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## james4beach

MrBlackhill said:


> Better say that everything is hot.
> 
> EV? Hot
> Cryptocurrencies? Hot
> Blockchain? Hot
> Clean energy? Hot
> Semiconductors? Hot
> Telemedicine? Hot
> Genomics? Hot
> Work from home? Hot
> Cloud computing? Hot
> Cybersecurity? Hot
> Online entertainment? Hot
> Advertisement? Hot


It's true that the whole market is very hot, but certain pockets are seeing extreme movements and that's what I'm pointing out. Marijuana could be (becoming) one of these pockets.

Have fun!


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## Money172375

Up another 8% today.


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## MrBlackhill

james4beach said:


> My theory is that it has nothing to do with news


My theory is that @Money172375 is right. When did it start moving? November 3rd, 2020.

Then, you may be right about how strong it is moving. But that strength _could_ be justified considering more and more legalization in the US. That's opening a much bigger market.

Growth investing is more forward-looking. It's about opportunities, financial growth, disruptive innovation.

Value investing is more backward-looking. It's about mispriced stocks based on their history and peers.

(That's oversimplified)

Growth is simply much harder to grasp and to price.


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## james4beach

MrBlackhill said:


> My theory is that @Money172375 is right. When did it start moving? November 3rd, 2020.
> 
> Then, you may be right about how strong it is moving. But that strength _could_ be justified considering more and more legalization in the US. That's opening a much bigger market.


Nobody really knows of course. The great thing is that we have a marketplace where everyone can put their investment theses to the test.

If someone really believes we are entering a brand new world for electric vehicles and marijuana, and that valuations of those stocks look fine today, then you should be able to make a ton of money buying into TSLA, NIO, PLUG, FCEL, BLDP, and HMMJ today. You'll be rich!

My thesis is that there's currently a broad-reaching bubble mania fuelled by extreme stimulus, which is leading to excessive greed and risk taking across a broad range of things. I think that recent movements in HMMJ, EV stocks and BTC are tied to this mania. They could of course continue for months or years. Because I believe it's a mania, I am firmly sticking to my existing, more broadly diversified portfolio (stock indexes, diversified stock picks, bonds, GICs, gold) without buying into any of the current hypes. I believe that this will give better long term results with less volatility.


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## MrBlackhill

james4beach said:


> Nobody really knows of course. The great thing is that we have a marketplace where everyone can put their investment theses to the test.
> 
> If someone really believes we are entering a brand new world for electric vehicles and marijuana, and that valuations of those stocks look fine today, then you should be able to make a ton of money buying into TSLA, NIO, PLUG, FCEL, BLDP, and HMMJ today. You'll be rich!
> 
> My thesis is that there's currently a broad-reaching bubble mania fuelled by extreme stimulus, which is leading to excessive greed and risk taking across a broad range of things. I think that recent movements in HMMJ, EV stocks and BTC are tied to this mania. They could of course continue for months or years. Because I believe it's a mania, I am firmly sticking to my existing, more broadly diversified portfolio (stock indexes, diversified stock picks, bonds, GICs, gold) without buying into any of the current hypes. I believe that this will give better long term results with less volatility.


I'll admit that I do believe that NASDAQ is overvalued by about 20%. If it's the start of a bubble, it could continue for 2 years maybe. Personally, I expect a correction on NASDAQ.

S&P 500 seems no more than 5% overvalued, so it's just usual volatility.

Unfortunately, I still have no strategy to evaluate the potential overvaluation of a specific industry other than gut-feeling.


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## Spudd

HMUS is doing even better than HMMJ.


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## Money172375

Up 12% today. Nice little run lately.


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## james4beach

Money172375 said:


> Up 12% today. Nice little run lately.


Insane rally here! Congrats... are you still long?

Notice how well the 200 day moving average [red line below] works as a crude, but usually effective, indicator of whether you are in bull or bear mode.


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## Money172375

james4beach said:


> Insane rally here! Congrats... are you still long?
> 
> Notice how well the 200 day moving average [red line below] works as a crude, but usually effective, indicator of whether you are in bull or bear mode.
> 
> View attachment 21223


Yes, it’s a long term hold for me. I’m up 60% but interested in seeing what happens in the US.


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## MrBlackhill

I'm currently watching AYR-A.CN

Could be the next stock I'll buy once I have some money available.


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## james4beach

What do you think @MrBlackhill will HMMJ go "to da moon"?

Maybe Elon Musk can start tweeting about the sector? Rocket ships and marijuana, that's his thing isn't it.


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## Spudd

I'm only down 13% on this now! LOL.


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## MrBlackhill

james4beach said:


> What do you think @MrBlackhill will HMMJ go "to da moon"?
> 
> Maybe Elon Musk can start tweeting about the sector? Rocket ships and marijuana, that's his thing isn't it.


No, simply that legalization in the US would be beneficial.


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## Money172375

Up 5% again today.....


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## Spudd

Now down only -7.5%! Green is in sight...


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## Money172375

Spudd said:


> Now down only -7.5%! Green is in sight...


Up 8% today. You even now?

maybe I should take some profits.


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## Spudd

Money172375 said:


> Up 8% today. You even now?
> 
> maybe I should take some profits.


Yup, +4.6% now! This thing is flying. I'm setting a trailing stop now.


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## Money172375

Spudd said:


> Yup, +4.6% now! This thing is flying. I'm setting a trailing stop now.


I’ve never tried advanced order techniques. What are you setting your delta too?


----------



## Spudd

Money172375 said:


> I’ve never tried advanced order techniques. What are you setting your delta too?


I set it to 1.48 because the current average true range is 0.74. No idea really if that's a good idea but it seemed reasonable.


----------



## nortel'd

REMOVED as I POSTED ABOUT WEED sorry


----------



## doctrine

Cannabis has exploded. Bitcoin at all time highs. It's 2017 all over again.


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## james4beach

doctrine said:


> Cannabis has exploded. Bitcoin at all time highs. It's 2017 all over again.


Very similar to the last mania. That's also when the brokerages (TD, etc) became unresponsive due to the crazy load, which is happening again.

As you point out, last time, it was also bitcoin & MJ stocks. Same thing again it seems.


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## Money172375

Up 14% today. I need a lesson trailing stop vs trailing stop limit


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## james4beach

Money172375 said:


> Up 14% today. I need a lesson trailing stop vs trailing stop limit


Do you intend it as a long term holding, or just a short term trade?


----------



## Money172375

james4beach said:


> Do you intend it as a long term holding, or just a short term trade?


Long term.....it’s in a small locked in account. I took a flyer on it. I paid $8.65 for it. I think there is long term potential in the industry, but I also don’t want to ride this thing down back to 8 if I can take some profit and re-enter it lower. I think its all mania right now.

TDDI offers trailing stop and trailing stop limit. I think I understand them, but not 100% sure. 
i was thinking about 20% trailing Order which it puts it around 13.50. does it make sense then to set the trailing limit to 20% with $0.50 variance So it goes to market at $13.50, but won’t sell less than $13.00? Am I’m that right?

this and disney were my gambling picks.


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## james4beach

Money172375 said:


> Long term.....it’s in a small locked in account. I took a flyer on it. I paid $8.65 for it. I think there is long term potential in the industry, but I also don’t want to ride this thing down back to 8 if I can take some profit and re-enter it lower. I think its all mania right now.
> 
> TDDI offers trailing stop and trailing stop limit. I think I understand them, but not 100% sure.
> i was thinking about 20% trailing Order which it puts it around 13.50. does it make sense then to set the trailing limit to 20% with $0.50 variance So it goes to market at $13.50, but won’t sell less than $13.00? Am I’m that right?


I guess I'm confused by what you wrote here because you say it's "long term" and then say you want to take some profit and don't want to ride it back down.

This is an extremely volatile sector. If you place a stop order, you're likely to get "shaken out" even if it keeps going higher. HMMJ could drop 20% in the blink of an eye, and then a week later, could be 50% higher.


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## Money172375

Maybe I’m being greedy. I’m okay to hold it LT. But I also want to play. Obviously if I knew it was gonna tank 50%, I’d like to get out earlier and re-buy. I just think it’s run up too much too quickly.


----------



## Ponderling

not this etf, but I held 11,000 shares of AH, with half in at about 1.5, and then the rest earlier this year so my acb per share was .91. So this morning it was 1.22, with no fundamentals changing to justify the move in price. 

So I decided this was good enough for me and set a limit sell at 1.22.

I think it is some sort of crazy run up, because the thing sold in 22 separate transactions. 

So all sorts piling in for a few hundred bucks position each. Let them have it. 

I might get back in when sanity come back into play.


----------



## Money172375

And down 20% at the open....


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## james4beach

Money172375 said:


> And down 20% at the open....


As I said just 22 hours ago, 'could drop 20% in the blink of an eye'.

Seems to be down 23% and counting. Well, it's volatile stuff. Now the fun part ... this is either a buying opportunity, * or * the stupid bubble has burst!


----------



## Spudd

My trailing stop triggered yesterday at 18.22 and I'm happy with that. Got away with a small profit. Even if it goes back up I won't be sad because I don't really want such a niche thing as part of my long-term portfolio.


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## james4beach

How come nobody talks about pot stocks any more? I guess everyone has moved on to energy stock hype.

HMMJ never went anywhere, as it turns out.



james4beach said:


> If someone really believes we are entering a brand new world for electric vehicles and marijuana, and that valuations of those stocks look fine today, then you should be able to make a ton of money buying into TSLA, NIO, PLUG, FCEL, BLDP, and HMMJ today. You'll be rich!
> 
> My thesis is that there's currently a broad-reaching bubble mania fuelled by extreme stimulus, which is leading to excessive greed and risk taking across a broad range of things. I think that recent movements in HMMJ, EV stocks and BTC are tied to this mania.


Interestingly, since I posted this observation on Jan 14, 2021,
TSLA +3%
NIO -65%
PLUG -64%
FCEL -68%
BLDP -70%
HMMJ -47%

I was right about these sectors being a bubble.


----------



## Spudd

james4beach said:


> How come nobody talks about pot stocks any more? I guess everyone has moved on to energy stock hype.
> 
> HMMJ never went anywhere, as it turns out.
> 
> 
> 
> Interestingly, since I posted this observation on Jan 14, 2021,
> TSLA +3%
> NIO -65%
> PLUG -64%
> FCEL -68%
> BLDP -70%
> HMMJ -47%
> 
> I was right about these sectors being a bubble.


It went somewhere. Then it went somewhere else.


----------



## londoncalling

Spudd said:


> It went somewhere. Then it went somewhere else.



Pot Stocks Surge As Marijuana Legalization Bill Nears House Vote - TheStreet

Tilray along with several other US pot stocks are having a great week. HMMJ provided as well

Cannabis, Marijuana, 420 Stocks - Yahoo Finance
Tilray Inc (TLRY) | TSX Stock Price | TMX Money
Horizons Marijuana Life Sciences Index ETF (HMMJ) | TSX Stock Price | TMX Money


----------



## james4beach

The peak price of HMMJ was 27.00 back in 2018.

It currently trades at 3.45. Though to be fair one has to adjust for dividends, so accounting for that, HMMJ is down 84% from its high.

And it's down 63% in the last year alone! Meanwhile the TSX (looking at XIC) is only down 3.3%.


----------



## Money172375

Reverse split today 1-2


----------



## james4beach

Is anyone bottom-fishing this sector? Today the US govt announced a plan to remove marijuana from the Schedule 1 drug list.


----------



## londoncalling

I recall the euphoria of pot stocks years ago. I knew there would be an opportunity to make money but had no clue when to get out so I passed. At the time I thought there would be less upside and more consolidation in the industry. That didn't play out the way I imagined. I should have realized anything requiring legislation and regulation will not go as planned. The stocks climbed higher and faster than I thought and have fallen further then I expected. Pot stocks in the future may end up doing what oil stocks did between 2020 and 2022. I think in a bear market like now, there is enough risk without having to be speculative. However, the payoff could be gigantic. Like the last ride up, it is uncertain if the black market will be eliminated, how medical will do in comparison to recreational etc. I don't know enough to be buying but perhaps one may want to look at Innovative Industrial Properties Inc. (IIPR:US) | NYSE Stock Price | TMX Money as a growth play.


----------



## james4beach

londoncalling said:


> I recall the euphoria of pot stocks years ago.


The euphoria was so crazy for a while that people were scrambling to open new brokerage accounts and invest in pot. I remember encountering trouble phoning into my brokerages and finally asked an agent, what's going on? He said people were going crazy with opening new accounts.

I think something like that happened again in 2021 with meme stocks when everyone wanted to buy the fad high tech stocks.


----------



## Money172375




----------



## Spudd

Money172375 said:


> View attachment 23830


That's because they did a 1:2 reverse split. 






HORIZONS ETFs ANNOUNCES CONSOLIDATIONS AND SPLITS


/CNW/ - Horizons ETFs Management (Canada) Inc. ("Horizons ETFs") has announced today that it intends to consolidate shares or units (each individually a...




www.newswire.ca


----------



## Money172375

Spudd said:


> That's because they did a 1:2 reverse split.
> 
> 
> 
> 
> 
> 
> HORIZONS ETFs ANNOUNCES CONSOLIDATIONS AND SPLITS
> 
> 
> /CNW/ - Horizons ETFs Management (Canada) Inc. ("Horizons ETFs") has announced today that it intends to consolidate shares or units (each individually a...
> 
> 
> 
> 
> www.newswire.ca


I figured that but got sidetracked with the labour news in Ontario.


----------

