RE:WTF HappendBarrons wrote an article that "Canadian Pot Stocks Are To High" and evaluations need to come down, therefore the entire sector got slammed, this has nothing to do with specific fundamentals on individual companies. Hold on GLTA. If you or your clients are looking at Canadian marijuana stocks as a veritable gold mine, some sober thinking may be in order. Thats the takeaway from this Barrons cover story. The Canadian government is expected to legalize recreational marijuana later this year. It would be the first industrialized nation to do so at the federal level. The prospect of nationwide recreational sales has some companies feverishly developing greenhouses or high-tech indoor cannabis growth facilities. Investors are rushing to buy their stocks. The companies include Aurora Cannabis (ACB.Canada), Aphria (APH.Canada), and MedReleaf (LEAF.Canada). One Canadian grower, Cronos Group (CRON), is listed on Nasdaq. Analysts say the prospects for booming marijuana sales create a rare, bullish investment opportunity. Problem is, these stocks valuations already appear to have more than factored in potential profits. These companies trade for more than 100 times their 2017 sales, and several hundred times that years cash flows, the article says. Some have market values that are larger than estimated sales for Canadas entire recreational marijuana market. An optimistic estimate for Canadas retail pot market sees annual sales of $9 billion in a few years. That would create only about a couple of billion dollars in cash flow to wholesale producers like Canopy, which means investors right now are paying 15 times the industrys cash flow five years from now. Thats certainly a high multiple. Theres another potential problem. After U.S. states Washington and Colorado legalized recreational marijuana, supply gluts pressured prices significantly lower. Something similar could happen north of the border once Ottawa gives pot the green light.