If you don’t know, Cannabis is like any other industry where it is broken into sub-sectors and there is inherent volatility. It is likely much of the volatility will come as the Trump Administration clarifies its position on Cannabis Stocks in general. But clearly the important metrics revolve around Federal Legalization, Supreme Court appointments and the voice of the people who know keeping cannabis illegal is a large waste of money.
Friday, Sean Spicer made some comments during a press conference which sent stocks related to recreational cannabis production and sales lower. But it seems from the down side action that nearly every stock found a seller into the close on Friday. More news continued over the weekend and the selling pressure should continue across the board. At Equities Research, we think this is healthy, this is a very long game and pullbacks are good for individual stocks and the market as a whole – which got a bit ahead of themselves – as part of the Global Trump trade since the Election.
Let’s look at a selected stock and how the industry acted on the back of the White House comments. WEED Inc (BUDZ) is on the Medical side of the ledger and had a normal 10% pullback with slightly higher volume. Below is a 5 Day Chart, followed by a longer term picture.
Look at the longer term chart for WEED Inc (BUDZ) and you can see the velocity of the move since the US Election. Most stocks moved like this on Friday. It is important to know where they started, and that the entire Cannabis Sector will have measured pullbacks like these along the growth path. Viridian Capital has some great information on this sector. Click here for more information on Cannabis Stocks
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We have no position in WEED Inc (BUDZ) nor are we paid by the company.