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Alpha Trader Talks Cannabis Investing With Todd Harrison (Podcast)

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This week’s Alpha Trader podcast features hosts Aaron Task and Stephen Alpher talking cannabis investing with Todd Harrison, founding partner and CIO of CB1 Capital.

“2021 will be remembered as the year [cannabis] emerged as a legitimate and powerful asset class,” wrote Harrison recently. The bull case for U.S. cannabis, he says, rests with the legalization wave - not just in the states, but at the federal level where the Blue Wave means a far more favorable regulatory environment.

If Cannabis 1.0 was the Canadian cultivation boom (think APHA, NASDAQ:CGC, NASDAQ:TLRY), and Cannabis 2.0 is the jump in U.S. retail operations thanks to state-by-state legalization (think of the multi-state operators), then Cannabis 3.0 - cannabis as medicine - will come thanks to the Blue Wave that just hit D.C.

That friendlier national regulatory environment also likely means U.S. operators as able to list their stocks on the major exchanges, thus opening them up to institutional investment.

Late last summer, Harrison wrote about the FANGificiation of U.S. cannabis - a group of Cannabis 2.0 stocks similar to the four horsemen of the late 90s (Intel (INTC), Dell (DELL), Microsoft (MSFT), Cisco (CSCO)) and then the more recent Facebook (FB), Amazon (AMZN), Netflix (NFLX), Google (GOOG) (GOOGL). In no particular order: Curaleaf (OTCPK:CURLF), Green Thumb Industries (OTCQX:GTBIF), Trulieve (OTCQX:TCNNF), and Cresco (OTCQX:CRLBF). A big rally since means these are no longer growth names at value multiples, but Harrison remains a fan.

That doesn’t mean there aren’t other quality U.S. operators, and Harrison notes ones like TerrAscend (OTCQX:TRSSF), Columbia Care (OTCQX:CCHWF), and 4Front Ventures (OTCQX:FFNTF). An estimated total addressable market of $85B by 2030 means there’s plenty of room for all to succeed. As for the Cannabis 1.0 names, Harrison will trade them, but he prefers to own the 2.0 players.

There’s plenty more, including why Cannabis 3.0 could mean treatment for a wide range or serious diseases and thus a market opportunity far in excess of Cannabis 2.0.

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This article was written by

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Alpha Trader is a weekly investor-focused podcast produced by Seeking Alpha that will dive into the most impactful market news and set the stage for upcoming market events. Hosted by Aaron Task and Stephen Alpher, episodes will be available every Tuesday, and will include discussions with market experts on topics relevant to active traders.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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