Editors' Note: This article includes micro-cap stocks. Please be aware of the risks associated with these stocks.
When I last reviewed the entire cannabis sector a month ago, I pointed to a big change: Not all of the stocks were moving in the same direction. My thesis was and remains the same: Investors are beginning to differentiate on both transparency as well as leverage to the big themes of recreational legalization and a more enthusiastic embracing of the medical benefits of marijuana. Again, the DOJ "hands-off" policy that gave the green light to Colorado and Washington to proceed with their implementations as well as Sanjay Gupta's reversal of his previously negative view on the medical aspects, both August events, paved the way for investors to sharpen their focus on these themes.
As I suggested then (note: here is a link to all of my previous articles on the sector), two of the better stocks to take advantage of these themes are GW Pharma (GWPH) for medical and GrowLife (OTC:PHOT) for recreational (but also medical). As you can see, these two stocks enjoyed a strong month:
Again, the requirement to make this list is to have a market cap, including assumed conversion of any convertible securities, of at least $10mm. Two companies on the list last month that fell off are Endexx (OTCPK:EDXC) and GreenGro Technologies (OTC:GRNH), while two names joined, including Fusion Pharm (OTC:FSPM) and Puget Technologies (OTC:PUGE). FSPM has only 5.7 million common shares, but I missed a preferred stock that converts at 100-1. This is owned primarily by the CEO, Scott Dittman, and partially by his brother. While the company sounds interesting (and is partnered in part with PHOT), the capital structure isn't very shareholder-friendly. My initial take on PUGE, which recently established Cannabis Biotech, is negative.
GWPH
