Today we’ll not only take a look at further cannabis globalization, but I’ll also be answering some questions about Constellation, Cresco Labs, Green Thumb Industries, and Innovative Industrial Properties…
More and more countries are jumping on the cannabis legalization train. Some are more progressive than others, but we’re seeing a shift in people’s opinions with the “normalization of cannabis.”
In fact, in recent news, Sweden announced it is following in Italy’s footsteps in determining CBD oil regulations and defining what, from the cannabis plant, classifies as a “narcotic.”
Both Sweden and Italy believe hemp-derived CBD oil from industrial hemp is not a narcotic. However, the highest court in Sweden stated that if the oil has a THC level of more than 0.2%, then it is still a drug.
So, CBD containing THC lower than 0.2% is exempt from narcotic control laws.
Shifting over to Asia, Thailand recently stated that it will be distributing about 10,000 bottles of medical cannabis oil to patients who suffer from an array of diseases and chronic illnesses.
We’ll talk to you more about Thailand and why it’s so important next week, so stay tuned!
Now, we’re going to take a look at a question from one of our members who was wondering about a certain stock ticker.
Shado462 asks: “Hi Greg, I’m a newbie. It is Constellation I have a question about. They have TWO stock symbols – one STZ ($199.60/share) is for Constellation Brands Inc. and the other is STZ/B ($199.85 at this posting) for the same company name. What is the difference? Which one do I invest in? With their per share value what it is, I really want to make sure I am investing in the correct one… Any insight is greatly appreciated! Keeping the faith…”
Hi Shado462, great question! For Constellation Brands (NYSE: STZ), you want to buy STZ and not STZ/B. The difference between the two is that the STZ/B shares get ten votes for every one vote of an STZ share, but the STZ shares get a dividend premium.
The B shares rarely trade, so it’s a lot easier to buy the A shares.
In our NICILytics stock rating system, our team gives an extensive analysis on over 180 public companies, and you can see how we rate STZ.
In our next question, we take a look at growth projections for two different companies.
Cresco or Green Thumb?
John J. asks: “Which of Cresco and Green Thumb Industries has the greater growth projection? What is the takeover potential for each?”
With their current platform of assets, I think Cresco (CSE: CL, OTC: CRLBF) can grow a little faster than Green Thumb Industries (CSE: GTII, OTC: GTBIF). But there are important considerations that go with that. Neither of these companies are done adding to their growth plans. Cresco has been acquiring more companies than Green Thumb – but that could change at any time – and Green Thumb has shown itself as a master at winning licensing awards.
Among the currently important cannabis markets from a profit standpoint, Cresco is not yet in New Jersey or Maryland, and Green Thumb is not in Michigan, Ohio, or Arizona. Look for both of the companies to fill in those holes. With the recent changes in laws in Colorado, both companies will most likely enter that market, too.
Either of those companies would be an outstanding takeover target, but I don’t think either wants to sell at anywhere close to the current prices.
I also don’t think strategic buyers – like the alcohol companies – want to enter the U.S. market until cannabis is descheduled.
I wouldn’t expect either to be bought anytime soon.
Finally, let’s take a look at the one cannabis company paying a dividend right now.
What to Know About IIPR
Fred M. asks: “I know the recent pullback is a great buying opportunity, but would it be better to buy IIPR/PA? With the lower price point and larger dividends would you suggest this play for those that missed the previous run?”
Great question, Fred.
I just wrote this week about Innovative Industrial Properties (NYSE: IIPR) and how pension funds are starting to buy the company. That means the pension funder managers at least believe the price will be stable.
They are entrusted to safeguard a lot of money.
I think at the current price, Innovative Industrial is a decent buy with not much more downside risk and, as you say, the company offers a nice juicy dividend every quarter.
It’s a dividend I expect to continue to increase over time. I think there are opportunities for higher returns elsewhere, but they carry more risk, too.
Before you enjoy the rest of your weekend, I wanted to remind members of Cannabis Investor’s Report about the monthly issue we released yesterday. In it, we take a look at the importance of good management.
Until next time,
Executive Director, National Institute for Cannabis Investors
One response to “New Countries Try to Make Progress with Cannabis Legalization”
August 03 2019