Matt here.
I hope you enjoyed Bryce’s watchlist yesterday. The weekend is halfway through and I’m eager for Monday’s open.
Today’s email is budding with weed picks. Oh yeah, let the dad jokes and pot puns begin. Seriously, though — the next few weeks could be smokin’ for the MJ sector.
Why? On Friday, the U.S. House of Representatives passed a bill to legalize marijuana at the federal level. The bill also goes a step further and seeks to expunge the records of people with non-violent cannabis offenses.
Just think of all those people now free to toke up the industry again. I might need to borrow Bryce’s dollar-sign sunglasses (check ‘em out in this episode of The Tuohey Talk Show).
Let’s get to the tickers…
Matt’s Picks — April 3, 2022
Here are the marijuana sector plays I’ve got my eyes on this week.
Tilray Inc (NASDAQ: TLRY)
TLRY needs no introduction. It’s pretty much the former runner du jour.
It’s a global cannabis company, and when marijuana stocks first took off in the summer of 2018, this baby ran from the $24s up to the $150s.
Remember that was pre-lockdowns. Stock moves like that — 6x — were still jaw-dropping. Especially in the listed stock world.
Whenever weed sector momentum returns, this is one of my go-to tickers to watch. There’s no firm date yet for when the recent marijuana House bill will hit the Senate, but I think weed could run into the 4/20 holiday.
TLRY needs to make a move above the $8.50–$9 mark to break past March 25’s $8.56 close. If it manages that, it could see $10 or more next.
Canopy Growth Corp (NASDAQ: CGC)
This is another OG MJ play. Canopy didn’t run as fast or as far as TLRY did in 2018, but it did 2x and 3x at key levels, depending on where you got in.
Keep in mind that both TLRY and CGC are Canadian pot companies, so it’s not yet clear how U.S. legalization could affect their bottom lines.
With that said, with sector momentum, sometimes it’s less about logic and more about popularity.
Traders see that weed’s getting a lot of press and they look for the most familiar tickers in the industry. They want tickers that have run in the past. That increases confidence that they could run again.
CGC would have to break past its March 25 closing price of $8.69 to convince me it wants to run again. If it hits $8.75 or $9, $10, or more could follow.
Medical Marijuana Inc (OTCPK: MJNA)
After the two listed stocks mentioned above, MJNA is one of the most popular OTC runners.
It’s based in Oregon and holds subsidiaries that make and sell a range of hemp-based products.
MJNA hit resistance at the 3-cent key level a few times at the end of 2021, then again at the end of March 2022.
It would have to break past that threshold to make a convincing move to the upside. If it does, 4 cents and 5 cents could follow.
Conclusion
Trading tickers in hot sectors is one of the best ways I know to get ahead in the stock market. Popularity brings volume, and volume brings meaningful price action.
I hope the weed sector can go on another smokin’ run. But even if it doesn’t, something else will.
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