“Do you want to cover cannabis?”
The question above was posed to my colleague/mentor Howard Penney and me by our Director of Research, Daryl Jones, on September 4, 2018. This was less than a month after Constellation Brands (STZ) backed Canopy Growth (CGC) with an additional $4B, bringing their stake in CGC to 38% and sending the cannabis stocks into a frenzy that peaked in October 2018.
After contemplating the thought of expanding our coverage to include cannabis for less than 24-hours, we said yes. It sent us on an adventure we never thought our careers in equity research would bring us.
We have been traveling around North America since then attending conferences, visiting management teams, and touring cultivation/production sites (it’s harder work than it sounds) trying to figure out what form this industry will take longer-term and who the winners will be. Through our travels, we have met with people we never thought we would cross paths with in an equity research role, and experienced ‘things’ we also didn’t think we would experience as part of our job!
... In our Chart of the Day below, we are displaying the growth in cannabis sales (dry flower vs. concentrate) within the state of Illinois. As we look to 2020, Illinois will be one of the most critical new adult-use states and will have significant impacts on the financials of our Best Idea LONGS: ...