Today the S&P 500 caps the biggest rally in a year, up 1.9% to 1,941. Are we already heading back to record highs? If so, the recent correction will have been nothing more than a blip on the radar. Most market participants did not see this quick of a reflex rally. Contrarian says, when the herd is saying one thing, look the other way.
The cannabis markets extended their rally again today with the MJIC Marijuana Index and Benzinga 420 Marijuana Index both appreciated by 2.28% and 6.26% respectively.
Daily Positive – MCIG posted a new distribution agreement for their new VitaCig product. Stock responded positively with a gain of 8.7% and strong volume. Volumes across the sector are improving, which is a welcome sign of confidence and a return of capital. Investors are taking solace in seeing a volume uptick after managing for months with challenged bid/ask spreads and sometimes days without any trades.
Daily Negative – It is disappointing to see several low quality, PINK sheet companies participating in the upside. We are encouraged to see trading volumes picking up in the OTC space. However, we would like to see investor capital focusing on companies with better business opportunities.
In terms of the political landscape, it is disappointing to hear that Colorado has some proponents supporting a reactionary policy that would ban most edibles. There is an issue with the extreme potencies and lack of transparency leading to poor user experience. However, adult use is just that, it is a product used by an adult. The idea of responsible usage seems to fall on both parties.
The edibles companies should aspire to clarity in dosage and some education around how edibles work. Adults trying edibles for the first time should beware. A good analogy is the difference between beer and hard alcohol, it is key to understand that consumption is different for each. Ingestion via other methods beyond smoking is a key element to this industry expanding and to walk away from it without further consideration, leaves many consumers out of the experience and many dollars on the table.
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