canopy growth (weed) $65.76 -2.94 vol: 5.9 mill aurora ...actually best positioned to become a...

David Pescod 780.932.5183 Debbie Lewis 780.499.3933 October 17, 2018

Canopy Growth (WEED) $65.76 -2.94 Vol: 5.9 mill Aurora Cannabis (ACB) $13.57 -0.41 Vol: 74.1 millAphria Inc. (APH) $19.40 +0.71 Vol: 16.1 millCannTrust Holdings (TRST) $13.67 +0.17 Vol: 3.1 millHexo Corp. (HEXO) $7.74 -0.49 Vol: 10 millCronos Group (CRON) $13.95 -0.98 Vol: 3.1 mill

Today was impossible to turn on the TV and NOT see one of the major events happening in Canadian history, as Canada becomes the second country in the world to legalize pot and it's var ious products. Only Uruguay has legalized this as well. But suddenly, the stock markets have gone crazy in this country and with roughly 100 publicly traded or nearly publicly traded companies around, the stock market has welcomed it in welcoming arms as a major social reaction is

expected. We have seen lineups two blocks long in Montreal and every province seems to have a very different system of how you get a hold of your legal pot, but many places where you can order online, were sold out within two hours. Do you think people are adapting? Or is it now that it is legal, why not give it a go?

Now we get to the interesting part on the stock market angle as the euphoria over the stock from the last two years, now has to get down to business and they have to answer one big question...can you make a buck at it, with so much competition in such hefty market capitalizations, maybe absolutely ridiculous market capitalizations. One boutique investment shop, Veritas Investments Research isn't afraid of giving their ideas as they start coverage on the cannabis sector with four sell ratings. It's interesting to read the report from Veritas and their suggestion of the overvaluation of the pot business as there seems to be many other big brokers more than happy with some of the underwriting fees they've had over the last while.

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Aurora Cannabis

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The summary of the Veritas report by analyst Rolfe, suggested the medical marijuana company Canopy Growth as having an intrinsic value of $30 per report on the business news site The Fly. He suggests the Ontario-based company seems to have the most to lose if market conditions disappoint. As far as Aphria, Rolfe takes a more sympathetic view calling the company a "star unicorn" and praising its useful disclosure on strategies and operation. Rolfe suggests Aphria's focus on cost management, cash flow generation and accounting, bodes well for its performance and might be actually best positioned to become a take-out candidate. As far as Aurora Cannabis, he points out that it has morphed into one of the largest scale bets on cannabis capacity, but its approach seems to be a touch on focus. He gives Aurora a target of $13.00 a share. According to ProActive, the Veritas analyst has a harsh view on Cronos Group, calling it an "undifferentiated grower" with a few solid cannabis related investments. They write, "While it's current capabilities are overvalued, Cronos might be able to benefit however by pushing further internationally." He sets a target price for Cronos of a mere $4.50 a share.Once again, a brand new industry, with extremely hopeful and aggressive valuations. Again, they have to answer that question, can they make a buck?


While information and opinions expressed in this publication are believed to have been gathered from reliable sources, we accept no liability for actions that you might take in response to the material presented. Because the use of the information presented is

relevant to the facts of your personal situation, you should seek the advice and services of a qualified professional who will take your personal situation into consideration in guiding

your actions.

The long lineups waiting for the store to open in PEI this morning…




P r o a c t i v e I n v e s t o r s Canada reports in the note d u b b e d " E n d o f t h e Rainbow", Rolfe wrote that he bel ieves Canada's cannabis industry looks wildly overvalued even if 60% of the country's black market converts to legal sales. He points out that "Eager investors have a l r e a d y d r i v e n s t o c k valuations for the eight largest publicly traded C a n a d i a n C a n n a b i s Producers to a combined market cap of $55 billion,

on trailing, 12 month sales of 250 million at a time when "over supply risks are rampant.” Of course all of this is happening at a time when every company out there is trying to produce ever more of the product. With the boom in sales on the first legal day, the question is what are sales going to be like in six months? More than a few people point to what happened in Oregon, when they legalized pot and everyone and their brother got into the business until there were 400 corporation and the like in

production. A few years later, the product is half price and most of the people are out of t h e b u s i n e s s f r o m t h e competition as it gets into the real world of...can you make a buck. Now it starts to get interesting as a couple of these q u e s t i o n s h a v e t o b e answered. Meanwhile, for a very interesting article we saw recently in the Globe and Mail on how Canopy Growth and Bruce Linton have changed the future of small, slowly dying industrial town Smith Falls and how it's changed that town

totally and more than a few lucky employees who got in early on their stock options...a must read. https://www.theglobeandmail.com/cannabis/article-how-cannabis-transformed-this-small-ontario-town/

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Aphria Inc.

Long lineups in Calgary as well…


https://www.theglobeandmail.com/cannabis/article-how-cannabis-transformed-this-small-ontario-town/





We are really looking forward to hearing feedback on this topic as we’ve learned a while ago that some of our readers have some rather significant and deep thoughts on many topics.

1. MADD (Mothers Against Drunk Drivers) is very much against the legalization of pot and point out to accidents and deaths already caused by pot impairment. Do you think it is going to increase dramatically?

2. On a recent poll, 62% of respondents say they will simply never try the product. Do you think that is going to become the truth?

3. It is interesting to see several doctors groups suggesting they do not approve the legalization of pot and more than a few in the medical profession are suggesting use of the product under the age of 25, really can affect one's brain function.

4. Do you think many people will switch their habits from alcohol, beer and the like to pot? It is interesting to see some of the big liquor distributors making sizeable investments in the pot business, some of them quite profitably. But do you think many will switch?

5. Have you tried it yourself to help you sleep? While many people talk about the attempt to get high or such, there are others such as us seniors who might want other uses. We were amazed recently to be at a gathering of six people and find out we were the only one not using a combination of THC and CBD to help get to sleep. The other five are all high-powered people, busy on the road, doing deals, under lots of pressure and found that it dramatically changed their sleeping habits for the better. We have had more difficulty finding such success. What about yourself?

6. Considering that it's suggested the potential market size of the legal recreational market is $10 billion and the estimated size of the ancillary market is $12 billion plus, and0 the market cap of the public stocks in Canada is way over $60 billion, can you see a market crash coming in the future?

7. What can you compare this event to - the legalization of marijuana...is it anywhere similar to the alcohol becoming legal again in the U.S? Or what comes to mind?

8. Would you leave your regular supplier for legal shops considering the price might be significantly higher?






Deb’s Ditty: 'TWAS THE NIGHT BEFORE CANNABIS

Twas the night before cannabis and all through the land,

Every toker was ready with papers in hand. I in my jammies all covered in stripes

Watchin' the neighbours a cleanin' their pipes. When out on the street there rose such a clatter, They'll not sleep tonight just waitin' ta get at 'er! No more in dark alleys or down on the corner,

Sneekin' the weed like our land for a foreig'ner! No more Hail Mary's after leavin' confession,

And no more fines for illegal possession. With a huff and a spliff and a Bob Marley song We'll be rollin' and vapin' and passin' the bong.

And whatever ya do, don't burn 'yer lips, Or forget 'yer lighters and cartons of chips.

Yes, tomorrow's the day for filling the till With blessings from Trudeau on Parliament Hill!

So roll up 'yer doobies, with oil annoint,Mary Jane to all and to all a good joint!!!



canopy growth (weed) $65.76 -2.94 vol: 5.9 mill aurora ...actually best positioned to become a...

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