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Cannabis Portfolio Changes: Two Sells

Cannabis Portfolio Changes: Two Sells
By Adam Sharp
Date February 20, 2020
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Cannabis stocks have had a rough ride for the last nine months. We initiated our positions when pot stocks were already down 50% to 80% from all-time highs. But prices have fallen further since.

As a result, Iโ€™m announcing some important changes to our Cannabis Portfolio.

Sell Aurora Cannabis and Elixinol Global

I recommend members sell their Aurora Cannabis (NYSE: ACB) and Elixinol Global (OTC: ELLXF) holdings. I am no longer confident in either companyโ€™s ability to weather a sustained downturn. Aurora is struggling on all fronts. And Aurora founder Terry Booth recently left under a cloud of controversy (read more about the companyโ€™s troubles here). Elixinol is facing similar issues, and the companyโ€™s U.S. expansion has been a disappointment.

Iโ€™m disappointed that these stocks have done so poorly. But I feel itโ€™s best that we cut our losses. Itโ€™s possible that these companies will rebound. But I believe they no longer offer an attractive risk-reward proposition.

Hold Canopy Growth, Charlotteโ€™s Web and OrganiGram

I recommend members hold on to their shares of Canopy Growth (NYSE: CGC), Charlotteโ€™s Web (OTC: CWBHF) and OrganiGram (Nasdaq: OGI).

All three are very high-quality companies. And I believe they are well-positioned to emerge from this storm stronger โ€“ and with increased market share.

Iโ€™m still extremely bullish on the cannabis market. I believe it will revolutionize how we treat pain and dozens of common diseases. On the recreational side, I think it will continue taking market share from alcohol.

But right now, the cannabis industry is going through a difficult adjustment. Thereโ€™s too much cannabis on the market in many areas โ€“ especially Canada. Weaker companies need to either die off or be acquired to restore market balance. This will take time.

While we wait, I will continue to evaluate potential new positions. However, itโ€™s likely that I will wait until weโ€™re in a confirmed uptrend before recommending anything new.

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