Tuesday, March 28, 2017

Cannabis Expert Alan Brochstein, CFA Responds to News of Canada’s Legalization Bill

Cannabis Expert Alan Brochstein, CFA Responds to News of Canada’s Legalization Bill

Point Roberts, WA, Delta BC – March 28­, 2017 – Investorideas.com, a global news source and investor resource covering actively traded sectors including cannabis and hemp stocks features a sector update with Alan Brochstein, CFA, following Monday’s news that the Canadian Government plans to introduce legislation in April to mandate legal marijuana use for July 1, 2018.     

Alan is a well-known expert in the sector and founded 420 Investor, a subscription-based due diligence platform for investors interested in publicly-traded cannabis stocks.

Alan Brochstein, CFA


Q: Investorideas.com
Alan, Canadian investors are buzzing about news on legislation that is potentially being introduced to legalize marijuana use in Canada for July 1, 2018. Although this was a campaign promise from the Liberals and not really a surprise, what are your thoughts on the implications on what it means?
A: Alan Brochstein, CFA
Traders and investors are rightly excited about what lies ahead. The news was viewed positively because there were some concerns that the first legal sales might take place later in 2018. I don't see the legislation introduction next month as big a driver of sentiment as the actual legalization, and that is more than 15 months away.

Q: Investorideas.com
Several of the Canadian listed cannabis stocks got a bounce from the news. Can you talk about a few of your favorite Canadian plays?

A: Alan Brochstein, CFA
I work with many LPs as clients at New Cannabis Ventures and have a policy not to make public comments about which LPs I favor or disfavor at any given time, though I do so at 420 Investor for my subscribers. I offer a model portfolio that focuses exclusively on Canadian LPs. I encourage investors to build a diversified portfolio, as the industry is so nascent that it is too early to crown the winners.

Q: Investorideas.com
Do you think the news from Canada will influence other global markets to follow suit?

A: Alan Brochstein, CFA
Just like the success in Colorado and Washington has paved the way for other states to follow, I expect that Canada will inspire other countries as well. Already their medical program, ACMPR, is viewed favorably all over the globe and has inspired Germany, several Latin American countries and Australia to move forward. There is little doubt in my mind that the Canadian companies will leverage their intellectual property and deploy capital into some other geographies. Just today, Aurora Cannabis (TSXV: ACB) (OTC: ACBFF) announced that it is acquiring 19.9% of CANN Group, the only licensed producer in Australia.

Q: Investorideas.com
If legalization comes to pass in 2018, what do you see as the opportunity five years from now and with that kind of growth, what hurdles does it come with?

A: Alan Brochstein, CFA
I think 5 years from now, the market will be well beyond its current format of mainly dried flower and THC-capped extracts delivered only through the mail, and investors need to focus on companies that will adapt to the market. The companies that can develop brands that resonate and connect with consumers as the market evolves will be the big winners. There will likely be over-supply of cannabis in the future (though not at first), and companies that invest too much in production capacity could get burned down the road. As the market evolves towards different extract products on the consumer side and towards pharmaceutical products, the role of cannabis itself may be decreased. Many aren't aware, but the technology to develop cannabinoids from sources other than cannabis is advancing. Of course there are synthetic cannabinoids too.

Q: Investorideas.com
Any closing advice for investors in the Canadian plays?

A: Alan Brochstein, CFA
I have been bullish on the sector as a medical market since early 2015 and as a legal market since late 2015. With that said, I worry about valuations at times and believe that many of the analyst sales and earnings estimates are too aggressive. My advice to investors is to be patient on entries and use the volatility in the market to one's advantage.

About Alan Brochstein, CFA and 420 Investor: Founded by Alan Brochstein, 420 Investor is a subscription-based due diligence platform for investors interested in publicly-traded cannabis stocks. His affiliated New Cannabis Ventures is a content aggregation site focused on investors and entrepreneurs in the cannabis industry. Alan Brochstein, founder, has worked in the securities industry since 1986, primarily with the responsibility for managing investments in institutional environments until he founded AB Analytical Services in 2007 in order to provide independent research and consulting to registered investment advisors.

Alan Brochstein, CFA and 420 Investor are listed on the 420 Cannabis Investor ideas Directory www.420cannabisinvestorideas.com

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