"Psst. Blue Horseshoe likes weed stocks."
- Gordon Gecko, if he existed, today.
There are two kinds of medical marijuana plays in Canada right now: The first is business plan-backed and will take some time to establish revenues and profits, and the second is a total and utter ‘stick it all on black’ roulette spin.
But it’s the roulette spin where money is being made.
Satori Resources (
TSX:V.BUD,
Stock Forum) has no news to suggest it is close to making money, doing a deal, coming up with a business concept, or opening a convenience store in Moose Jaw – but, right now, it’s destroying the market.
By noon Eastern, Satori stock was up 43.48%, up $0.05c to $0.165, on 8 million volume.
That’s insane for a company that appears to have one staffer, no track record, and no business plan beyond 'me too on the weed thing, maybe'.
A 43% jump in such a situation is nutty. But by day's end it had evolved; 8 million volume to noon with a 43% spike, 9.3m volume by close with a fall back to 30%.
Such swings are, right now, entirely random in nature and based largely on the hive mind at work in the medical marijuana space. But what is predictable is what happens to them.
Stock goes way up early, market movers take their profits, stock plummets late as money moves to a new 'no news' target, which skyrockets before reversing next morning as the hive moves on.
Essentially, these stocks can be played with no knowledge of what they are, what they do, where they're going and who is behind them, because the market is moving as a large group from company to company among a group of 20 potential targets.
The thinking appears to be, Senator Minerals is down? No worries, wait a day and it'll be up again. Ansell Capital is up? Sell out, put the cash intop something else, and come back to Ansell in a few days when it's turn will come once more.
The one thing Satori has that attracts investment dollars in this space is a great ticker symbol. Like having a great domain name, having the right ticker – at least in this sector at this time – is important. V.BUD and V.THC (Thelon Capital) are places that, for the uninitiated (and let’s face it, everyone’s uninitiated at the moment), seem like they’re going to be a definite weed play, so there’s likely a decent amount of new money attracted to those places on pure speculation alone.
Satori's
Stockhouse Bullboard has become a defacto weed clubhouse, where investors in 420 stock fling around rumors and pumps, and the stampede runs wherever the front of the herd is headed for that day.
The market bears this out. Today, the big movers in weed today at noon eastern were Seaway Energy (
TSX:V.SEW,
Stock Forum - up 50%), Satori (up 43%), 88 Capital (
TSX:V.EEC,
Stock Forum - up 40%), Alchemist Mining (
TSX:V.AMS,
Stock Forum - up 32%), Senator Minerals (
TSX:V.SNR,
Stock Forum - up 17.5%), and Thelon Capital - the aforementioned V.THC (
TSX:V.THC,
Stock Forum), and up 11.1%).
None of those companies have any news that points to a solid marijuana-focused business, or the acquisition of grow licenses. And by the end of the day, a lot of that money had switched gears entirely. As an example, Seaway ended the day down 12.5%, a 62.5% swing from their noon high to the close of trading - on no news.
At the down end of the doobisphere sits GrowLife (
OBB:PHOT,
Stock Forum), which actually has acquired cannabis-based IP and products, has revenue, and yet is down 7.4%. Next Gen Metals (
CSE:C.N,
Stock Forum), which has announced it will be holding marijuana investment conferences in April, is also down a small amount, the second day of drops since they announced their news. Pan American Fertilizer (
TSX:V.PFE,
Stock Forum), which has a solid fertilizer business irrespective of the weed plays, is down for the third day as sentiment that it might be a 420 player dissipates.
Just as many mining executives take the quiet stance that the best way to ruin the value of their property is to start drilling holes in it, right now, in Canada, the best way to limit the demand of your marijuana business, it appears, is to tell people what you plan to do with it.
That will change. The streaking 420 plays, right now, are shell games being played not by executives but by syndicates of investors and shorters who make a big move on a stock, wait for the crowd to join them, and then pull their profits. That means, in general, the best way to play the market may be to buy into big drops and wait for that company to get another turn at a big day.
Personally, I like Enertopia (
CSE:C.TOP,
Stock Forum) as a marijuana play with long term worth. There’s a business there which, while not overly valued by the community right now, will soon look a good bet when dabblers have been run over by the market movers a few times. I bought a little for my RRSP, so I’ll only comment on price moves going forward to avoid any conflict of interest.
I also like, but am a little confused by, Terra Firma Resources (
TSX:V.TFR,
Stock Forum). There’s astonishing volume on this stock, considering the market cap and 65m shares outstanding, but at present the bids aren’t biting on the asks. Like Zodiac Explorations, the one-time resource darling that is drowning in an over-supply of shares and a scarcity of news to move them upward, TFR is choked by investors working for half cent profits who can't dispose of their shares without driving the share price down 25%, or buy any without sending it up the same amount.
But with so many in the TFR game, a little news may turn it into a surger. It did pick up a cent over the course of the day, delivering a 40% profit on 5.7m volume.
That said, money in the stock is dead money right now with so many competitors on the move.
NOTE: Supreme Resources (TSX:V.SL, Stock Forum) has given up on finding metals and changed name to Supreme Pharmaceuticals. Today it announced it was in the cannabis game. Stock jumped 150% on massive volume.Windfire Capital (TSX:V.WIF, Stock Forum) has done likewise.
President and CEO of Supreme Resources, Mr.
David Stadnyk states, "As a diversified life science company we are now looking into the medical marijuana industry as part of our duty to our shareholders to investigate potential transactions. As a company we continue to search for opportunities that provide value and the medical marijuana industry appears to be booming and may offer significant rewards to our shareholders. We have several key contacts with potentially valuable opportunities and we will evaluate them rigorously."
Also added to the list today is Rostock Ventures (OTCBB:ROSV, Stock Forum) , a San Diego-based company that is closing acquisition of the iWeedz.com website, which helps medical marijuana consumers connect to “vendors or likeminded individuals” with “daily deals, proximity marketing, social media and back end payment processing.”
Rostock stock has climbed from $0.02 at the start of the year to almost $0.10 today.
The US Marijuana Index is up 2.7% in early trading. Our own Stockhouse Canadian MJ Plays Index is up 7.2%.
Here’s the market activity today:
| Ticker |
Last |
|
% Change |
Bid |
| V.SEW |
0.175 |
-0.025 |
-12.50% |
| V.ACP |
0.085 |
-0.010 |
-10.53% |
| PHOT |
0.601 |
-0.048 |
-7.40% |
| EAPH |
0.058 |
-0.004 |
-6.66% |
| V.PFE |
0.155 |
-0.010 |
-6.06% |
| FWSI |
1.800 |
-0.100 |
-5.26% |
| C.N |
0.580 |
-0.020 |
-3.33% |
| C.TOP |
0.900 |
-0.030 |
-3.23% |
| V.NSP |
0.220 |
-0.005 |
-2.22% |
| C.SOU |
0.050 |
0.000 |
0.00% |
| C.ATT |
2.470 |
+0.130 |
+5.56% |
| MDRM |
0.100 |
+0.011 |
+11.73% |
| V.THC |
0.155 |
+0.020 |
+14.81% |
| V.SNR |
0.230 |
+0.030 |
+15.00% |
| C.AAF |
0.140 |
+0.025 |
+21.74% |
| ROSV |
0.103 |
+0.019 |
+22.62% |
| V.BUD |
0.150 |
+0.035 |
+30.43% |
| V.AMS |
0.205 |
+0.050 |
+32.26% |
| V.WIF |
0.180 |
+0.045 |
+33.33% |
| V.EEC |
0.035 |
+0.010 |
+40.00% |
| V.TFR |
0.035 |
+0.010 |
+40.00% |
| V.SL |
0.050 |
+0.030 |
+150.00% |
Note: We're changing format of the Medical Marijuana Update a little as, while it's the most widely read thing on the Stockhouse website right now, it takes a lot of research and prep.
We will do a weekly round-up of where each company is at, in the form of the old format, as of next Friday, so you can stay on top of who's doing what in the business.
As always, if you know of a company in the business that we're not covering, let us know in the comments below.
Currently watching Copper Reed Mining and Synapsus Therapeutics for moves into the market.