Cashing in on Cannabis

Featuring Tony Greer

Tony Greer, founder of TG Macro, sees opportunity in cannabis stocks after the high-flying sector sold off this month. He reveals his favorite stock to buy on the dip and discusses the short-term trade as well as the long-term prospects, in this interview with Justine Underhill. Filmed on October 24, 2018.

Published on
29 October, 2018
Duration
16 minutes
Rating
32

Comments

  • TG

    Tony G.

    1 11 2018 17:53

    9       0

    I'll comment on this myself since I assure you - I've been beating myself up for choosing such an aggressive entry. The risk reward was difficult to time and calculate with the steep S&P sell off. I try to prepare for these ideas well ahead of time but to include real time headlines and price action. Figuring out the exact right prices to enter the trade on this format is challenging for me, but the complaints are totally fair. My plan B was to buy it lower and stop out on the south side of the 200dma at $31.50. If I went with Plan B, it would be a home run so far.

    I saw the lazy comment above lazy research and I don't really think the point of these videos is to bowl the viewer over with research. As Quoth the Raven always says - do your own research. Nobody gets excited to talk about EBITDA, its all on the Bloomberg terminal. I choose trades based on technicals versus sentiment, narrative versus price action, headlines versus stock reaction, not by what company has promising EBITDA.

    There's also nobody doing a deeper dive in research who is also capable of tweeting "aaaand Canopy just bottomed" at 9:35AM on Tuesday morning like I did from @TGMacro, with the stock trading $33, after I bought the $32.01 opening print. As I type, that's a 13% move in just over 48 hours.

    The opportunities are plentiful if the readers don't get themselves caught up in the noise of "oh but he got stopped out." "Oh this is just like FCX." I didn't hear anyone write that I've been short builders, social media, and emerging markets since long before they broke down. A good trader only needs to be right a little over 50% of the time and I barely need that much.

    The key is to know when to send it in like on Tuesday's CGC opening. That was amateur hour, but then again, so was buying CGC ahead of the old highs when I could have made it a more passive idea and said "BUY IT RISKING $31."

    I'll try to do better on the tactics, but if the message is right, please exploit it with me.

  • MC

    Matthew C.

    31 10 2018 00:10

    0       0

    It's going to take time for Cannabis to become mainstream, and probably a very aggressive marketing campaign along the same lines as Coke and Pepsi in the 80's.

  • VF

    Victor F.

    30 10 2018 16:59

    2       0

    My friends prefer Cannabis over Tobacco and Alcohol. I don't see why Cannabis can't surpass the demand of those two. There's tons of value added products possible like beverages, pills, edibles, and hemp derivatives. It's also got some permanence. Tobacco was used as a currency back if we roll back the time far enough. What happens if the Canadian economy crashes? Sell our weed to the highest bidder exchange rate included :)

    The LPs in Canada are an oligopoly, there's high barriers to entry which is why we're on such short supply. Health Canada slowed down the process as well. I'm not a fan of how paradoxical the entire legalization process played out. Illegal growers can't be involved because they broke an unjust law. It's unfair they sit by the sidelines while everyone with legal capital can invest when the "criminals" were the only reason it's now legal anyways.

    Full disclosure, have 7 figures in the cannabis sector.

  • MB

    Mike B.

    30 10 2018 15:34

    2       0

    That was interesting - the fastest stop out in RV history. That aside, there were a lot of numbers thrown about that are questionable and to say you are there for the next 5-10 years, suggest to me that more homework is required. The other issue I have is that lack of awareness of the demand-supply imbalance. Yes, there is a large demand/supply imbalance in the short-term but when you add up the sq ft of production coming down the pipe in 2019/20, you will have an extreme over-supply situation. Let's be clear, there really are no barriers to entry other than obtaining the requisite licensing and when the US market opens up, you can bet there will be some very stiff competition. I think the constellation brands investment in Canopy was far too aggressive and they could have saved billions by forming a JV rather than buying the equity position. The easy money was made in the sector, what comes next is consolidation then commoditization. Yes, Canopy will likely survive given the rather substantial cash infusion from Constellation Brands who IMO substantially over-paid.

  • RO

    Robert O.

    30 10 2018 15:22

    0       0

    Wait for state taxing authorities to start increasing sales taxes of cannabis products to cover health care and emergency services. News reports of increasing traffic events in states with access to cannabis products are beginning to show up.

  • p5

    peel 5.

    30 10 2018 03:19

    1       1

    we cant stop you dreaming.

  • RP

    Ryan P.

    30 10 2018 02:50

    0       3

    Well that's the nature of stock picking, poor timing today. I agree with his thesis on CGC over the next 5-10 years and this dip should be bought up very quickly.

  • MK

    Mike K.

    30 10 2018 02:33

    1       1

    I'm looking at an entry just at the lows tomorrow (after that 14% negative day), 30th Oct.
    The setup has a great risk reward, with a clear stop point too.
    ...I like TG, so hopefully this post will age a bit better :)

  • TS

    T S.

    30 10 2018 01:27

    2       0

    Did he get stopped out on CGC? His stop was 35.88 and you saw what it did today.

  • DD

    Derek D.

    29 10 2018 22:02

    2       0

    This is lazy research

  • DS

    David S.

    29 10 2018 19:41

    0       0

    Is there any restriction on non-Canadians buying and using cannabis in Canada? DLS

  • NF

    N. F.

    29 10 2018 19:04

    3       0

    Before the open I upvoted this, now that CGC is down roughly 14% and has smashed through support I'm thinking that was a tad hasty.

  • WB

    Wes B.

    29 10 2018 18:51

    7       0

    This didn't age well and it was released only minutes ago

  • AS

    Alan S.

    29 10 2018 18:18

    7       0

    It is worth noting that Canadians are permitted to grow four pot plants per residence. So, lets say you live in the largest province (Ontario), and live mid range in terms of the growing season; you will be able to grow four plants each seven to eight feet tall (my neighbours did it this past summer). The assumption that everyone in Canada will be buying pot from producers is not a built-in given. If you could grow a vodka tree, would you go to the liquor store?

  • DB

    Douglas B.

    29 10 2018 17:01

    8       0

    Damn...i got stopped out 😜😂. J/K