Cannabis Stocks Starting to Gain more Traction

Discussion in 'Stocks' started by MomentumInvestor, Oct 10, 2018 at 2:50 PM.

  1. Marijuana Stocks are starting to pick up more focus with IGC making big moves last week. Today it managed to bounce and realize another entra day opportunity. GWPH has approval from the FDA to market CBD on a big scale.
     
    Last edited by a moderator: Oct 10, 2018 at 3:34 PM
  2. vanzandt

    vanzandt

    Well, thats a bit of a misleading statement. I have followed this stock very closely. Couple things here that are very important.

    The only drug that has current FDA approval is Epidiolex.

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    2) As this is a nascent market... there's still many unknowns. From their latest SEC filing (last week):

    The commercial success of Epidiolex depends on the extent to which patients and physicians accept and adopt Epidiolex as a treatment for LGS and Dravet syndrome, and we do not know whether our or others’ estimates in this regard will be accurate. We have limited information about how physicians, patients and payors will respond to the pricing of Epidiolex. Physicians may not prescribe Epidiolex and patients may be unwilling to use Epidiolex if coverage is not provided or reimbursement is inadequate to cover a significant portion of the cost.

    3) They just had a 1.9 Million share (adr's) dilutive offering to the tune of $345MM on 10/03/18.

    4) As of 10/01/18 they are changing over all of their accounting to the U.S. methods. I don't like the line below that I have boldfaced. Before I'd go long this stock, I'd wait a quarter and let the analysts look things over. From that 8K:

    We currently prepare our financial statements and report our financial results in pounds sterling under IFRS. Beginning on October 1, 2018, we will report as a U.S. domestic filer and present our historical and future financial statements in our SEC filings and financial reports in U.S. dollars under U.S. GAAP. There have been and there may in the future be certain significant differences between IFRS and U.S. GAAP including the accounting for inventory, revenue recognition, share-based compensation expense, income taxes and classification of research and development tax credits. We do not plan to provide a reconciliation of IFRS to U.S. GAAP. Our functional currency will also change from pounds sterling to U.S. dollars, which could have a material impact on our historical and future financial results. We do not expect this change to affect our reported cash position. When reported in U.S. dollars under U.S. GAAP, our financial results may be significantly different than previously disclosed historical financial results, which could negatively impact the market price of our ADSs.

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    I like the stock.... but to just jump in willy-nilly here without some serious due diligence regarding whats really going on (just because it has something to do with weed)... is a fools game. This is a very volatile stock.

    Again, I do like it.... but until at least one or two quarters are under its belt.... you're just rolling the dice here. They are burning cash very fast.

    -G/L and welcome to ET.