There’s really only one news story in the medical marijuana sector today as Tweed (
TSX:V.TWD,
Stock Forum) listed on the TSX amid much clamor for stock, and a hefty slice of confusion.
The stock opened at $4.75, having shown pre-open bids as high as $100, before quickly dropping back to the $2.60 range.
Tweed has a legitimate MMJ play, with a sizable grow facility, an increasing variety of medicinal strains picked up from exiting formerly regulated players, and having navigated Health Canada’s new regulatory system with aplomb.
But how the stock came to be has presented difficulties for many.
US investors were banging down doors to get on the stock early, with many taking to Twitter in frustration when their trading platforms couldn’t pick up a Venture stock. And with two listings combining to complete the reverse takeover Tweed was born out of, with a share swap on top of that, and the whole thing debuting on the exchange at the same time those machinations were working through the system, the first few hours of Tweed’s life saw many (myself included) confused as to correct market caps and shares outstanding.
The TSX listed the stock as having 7m shares out and a market cap of $20m. Stockhouse showed 35m shares out and a market cap of $100m. Trading platforms were showing 170m shares out and a market cap of $400m – and as high as $600m at the opening of trading – a holdover from V.TWD’s former life as Trade Winds Ventures.
Bottom line: A lot of new money entered the sector this morning, and a significant portion of that came from other ‘dot bongs’ that have, in previous weeks, been charging up the charts on speculation and innuendo.
Dime-Store Analysis time:
I’m not your investment advisor, and you should be doing your own due diligence all day long, but at a market cap of $100m, it’s my opinion that Tweed looks to be priced just about right, based on the potential for the company to produce revenue over the coming year.
But it has some distinct advantages over others coming to, or already in, the space.
- First mover advantage. Sure, other companies were releasing press releases saying they were ‘in’ on medical marijuana some time ago, but Tweed has a license, which means it’ll hit the ground running hard.
- It has cannibalized the existing regulated-but-soon-to-be-unregulated market. Growers wary that their businesses may be about to become illegal are cashing in, sending their products, seeds and IP to Tweed, giving it a huge range of products right out of the gate, and keeping that supply from competitors.
- It got the US money. There are a lot of very invested US folks who, for the first time this morning, learned how to trade a Canadian stock. They’re unlikely to jump through hoops for the next one – Tweed has crossed over and is now the favoured name.
- Tweed has cash in hand. That alone puts it ahead of 95% of the MMJ plays we cover, and puts it in good position to take out anyone who surges as a threatening #2.
I don’t hold Tweed – couldn’t write about it if I did – but those in on it today should have a good few months ahead, if what we know of the company to date holds true.
And those that got in at $4.60 and have watched half the value disappear this morning, that’s on you for jumping in too early but, remember, you haven’t lost money until you’ve sold it off.
TWITTER WARS:
While a lot of ganjcos have held news releases off to keep away from the tsunami of Tweed coverage, an interesting scene is playing out on Twitter, where an individual who calls himself
@WolfOfWeedSt has made a big name for himself buying up weed pennystocks, and then telling his 16,000 followers to buy them. Unlike your traditional pump and dump scenesters, Wolf plays a long game, telling his #Wolfpack that they should hold the stocks rather than flip them for quick profits. He tends to focus on companies that have long potential, and that allows his group to keep banging the drum on the stock over a long period.
This morning, the #wolfpack was
written about by the BBC – the first widespread international coverage of this fast growing collective – and the group took the opportunity to demonstrate their power by releasing their latest ‘unicorn’ pick, joining previous picks SPLI and MINE, is the Fortitude Group (
OTO:FRTD,
Stock Forum).
FRTD stock duly jumped 75% in half an hour, from $0.04 to $0.07.
The movement was so hard and fast that #Wolfpack trended #2 on Twitter across North America.
But all was not well in Wolfville. Another Twitter penny stocks player,
@TimothySykes, has taken it upon himself to demonstrate @WolfOnWeedSt is not to be trusted, and has thus shorted all of his recommendations with his 79,000 Facebook and Twitter followers over the last week.
“I'm thinking of a 2 letter adjective that describes
WolfOfWeedST - 1st letter is B lets see if
SPLIMINEFRTD bagholders can guess the 2nd” he tweeted this morning.
Twitter user @HappyPennyStock has 31,000 Twitter followers, and he’s joining the Sykes shorting attack, posting, “That 5 day chart in
MINE is a shorters dream.. I go one stock making money going up... I need another one making money GOING DOWN..Feel me?”
What’s abundantly clear isn’t which one of these social media market makers is right or wrong, cool or uncool, or worth following or not… it’s that if you’re going to buy a weed stock, it makes more sense to look at basic investment data and decide whether the company is a good long term play or not before you commit your money to a wild west sector like medical marijuana and/or play the daytrade swings.
VisualCapitalist has a great infographic that illustrates exactly why this sector is so hot right now. GO SEE.
PENDING NEWS:
Chlormet Technologies (
TSX:V.CMT,
Stock Forum) is
trade halted this morning, pending news. Bullboarders are suggesting the company may have acquired a license, but that is ENTIRELY speculation. The company has increased in value from $0.03 in early February to $0.465 today. It has a market cap of $9.7m on 20.9 million shares outstanding.
Supreme Pharmaceuticals (
TSX:V.SL,
Stock Forum) has
extended their due diligence period on a South Okanagan grow facility. Investors pushed the stock price down 9%, but I see this press release as a good one. First, the company is communicating with investors fully and clearly. Second, you do not want to rush a grow op purchase, not unless you're okay with finding that you just got into business with guys wearing bike leathers. Supreme's extension is a big boy move, daytraders be damned.
UPPERS:
Bayhorse Silver (
TSX:V.BHS,
Stock Forum) (which, full disclosure, is a Stockhouse Publishing client) reiterated that they’ve
gone all ganja today and the message began to resonate, with the stock climbing 14% on moderate volume. Worth remembering with Bayhorse: They're staying in the mining game, so you're basically getting the weed play for free if you invest in their stock.
On the ‘moving for no known reason’ front, Meridex Software (
TSX:V.MSC.H,
Stock Forum) took a 17% jump on no news with 2m+ volume, while PMX Communities (
OBB:PMXO,
Stock Forum) climbed 31.9%.
Terra Firma Resources (
TSX:V.TFR,
Stock Forum) went up half a penny for a while, which registers a 25% lift for the $0.02 stock, but that broken listing never stays up for long. It’s the Zodiac Explorations of weed stocks. Without news of substance, avoid this take-a-penny-leave-a-penny play.
DOWNERS:
Two new players, Majescor (
TSX:V.MJX,
Stock Forum) and West Point Resources (
TSX:V.WPO,
Stock Forum) both took hits today of 14.2%, but they’re both (right now anyway) total vapor plays, in that there’s nothing to them but the news they like the sector. For every 15% they drop or rise, expect a 15% swing the other way the following day, at least until substantive news emerges.
Also down on the day… urgh… Satori Resources. Something that I’m sure I’ll be blamed for, if previous days are anything to go by.
INSIDE DIRT:
Every time I post an update that says something mean about SadStori – sorry, Satori Resources (
TSX:V.BUD,
Stock Forum) - someone calling themselves ‘MarketLady’ leaves a comment to say I’m unprofessional and should be fired. This played out yesterday when I noted a bullboarder had joked that the company had hired three weed consultants and linked to a picture of the Trailer Park Boys, for example.
Submitted for your consideration and completely hypothetical: I was just pondering how
professional it would be to masquerade as a mining company for a year while giving yourself a weed-inspired name and a weed-inspired ticker symbol, taking money from investors for a dried up mineshaft while secretly eyeing the opportunity to go all 420? Probably no less professional than masquerading as a messageboard troll..
Complete hypothetical of course, but an interesting talking point if we’re discussing professionalism, don’t you think?
That said, Satori Resources is, obviously, a completely professional outfit with a genuinely interesting play that is brimming with potential.
It dropped 11.7% today. (sad trombone)
THE MOVERS:
| PMXO |
0.029 |
+0.007 |
+31.96% |
629.49k |
| V.MSC.H |
0.300 |
+0.045 |
+17.65% |
2.19m |
| V.BHS |
0.160 |
+0.020 |
+14.29% |
286.4k |
| V.AMS |
0.170 |
+0.020 |
+13.33% |
203.5k |
| C.AFI |
0.375 |
+0.035 |
+10.29% |
1.69m |
| V.ACP |
0.055 |
+0.005 |
+10.00% |
138k |
| V.SL |
0.060 |
+0.005 |
+9.09% |
2.01m |
| V.WIF |
0.155 |
+0.010 |
+6.90% |
43.5k |
| V.CYX |
0.105 |
+0.005 |
+5.00% |
2.01m |
| V.CMTH |
0.465 |
+0.020 |
+4.49% |
1.34m |
| RAGO |
0.101 |
+0.002 |
+1.51% |
642.49k |
| V.EEC |
0.030 |
0.000 |
0.00% |
0 |
| MDRM |
0.188 |
0.000 |
0.00% |
951.89k |
| C.SOU |
0.420 |
0.000 |
0.00% |
50k |
| V.TFR |
0.020 |
0.000 |
0.00% |
1.73m |
| ROSV |
0.085 |
0.000 |
0.00% |
179.16k |
| V.PXR |
0.035 |
0.000 |
0.00% |
0 |
| V.CVN |
0.045 |
0.000 |
0.00% |
196.5k |
| V.WER |
0.045 |
0.000 |
0.00% |
167k |
| V.JOR |
0.040 |
0.000 |
0.00% |
159.5k |
| NGMC |
0.045 |
0.000 |
-0.22% |
1.3m |
| V.CL |
1.210 |
-0.020 |
-1.63% |
6.6k |
| V.NSP |
0.350 |
-0.010 |
-2.78% |
87.34k |
| EAPH |
0.041 |
-0.001 |
-2.84% |
5.51m |
| V.THC |
0.130 |
-0.005 |
-3.70% |
1.18m |
| C.N |
0.360 |
-0.015 |
-4.00% |
204.26k |
| C.ATT |
1.650 |
-0.070 |
-4.07% |
746.12k |
| V.MGW |
0.085 |
-0.005 |
-5.56% |
2.27m |
| V.SNR |
0.150 |
-0.010 |
-6.25% |
5k |
| PHOT |
0.546 |
-0.043 |
-7.23% |
15.8m |
| C.GHG |
0.115 |
-0.010 |
-8.00% |
186k |
| C.TOP |
0.550 |
-0.050 |
-8.33% |
100.6k |
| V.PFE |
0.105 |
-0.010 |
-8.70% |
128.25k |
| V.SEW |
0.255 |
-0.025 |
-8.93% |
5.6k |
| V.BUD |
0.075 |
-0.010 |
-11.76% |
2.18m |
| V.WPO |
0.060 |
-0.010 |
-14.29% |
42.22k |
| V.MJX |
0.090 |
-0.015 |
-14.29% |
77.5k |
| V.TWD |
2.550 |
-2.050 |
-44.57% |
9.02m |
Check back daily for the latest news in this sector.
For more stories on this sector, see our
Medical Marijuana section.
Follow me on Twitter at @ChrisParry
Send tips, news, suggestions to chris(dot)parry(at)stockhouse(dot)com