420Investor and New Cannabis Ventures Founder Alan Brochstein, CFA shares his views on why new cannabis issuers have performed dismally this fall. Brochstein emphasizes that the broader market has played a role in this trend, as the downturn since October has weighed heavily on the space. He also highlights that since 2016, significant amounts of capital have been raised in the space and individuals have more options when it comes to cannabis investing. While it is easy for investors to cut their losses right now, Brochstein cautions that they would be wise to pay attention to the immense revenues generated by new issuers, despite stock volatility. Brochstein is happy to see US companies like Harvest Health & Recreation Inc (CNSX:HARV) (OTCMKTS:HTHHF) and Canadian counterparts such as Organigram Holdings Inc (CVE:OGI) (OTCMKTS:OGRMF) (FRA:0OG) providing detailed guidance. Brochstein notes that US investors now have a lot more options to invest in the United States and he believes this will be a big story to watch in 2019.
Transcript:
James West: Hey, Alan, how are you going?
Alan Brochstein: Hey, great, James, good to see you again.
James West: You as well, you as well. So, Alan, you know the market’s been kind of in a tough spot lately, and I guess the best way to describe it is all the new issuers that have been coming to market have been absolutely dismal performers, and I’m curious as to your perspective on why that is.
Alan Brochstein: Yeah, so, you know, I’m not able to confirm this precisely, but I’ve heard from another people it kind of started with the Curaleaf deal. And apparently, they had a big, you know, they were out there representing that the book was even bigger than it was, and people upped their orders, and then they ended up getting full allocations on the upsized orders. And so it left a bad taste in people’s mouth, apparently. I’ve heard that from a number of sources.
So the reality is, we’ve seen, in very weak overa