I have written a few articles about marijuana stocks. This article is an update on marijuana related legislation and past stock selections, as well as a quick discussion on one new selection for my watch list.
In prior articles, I wrote about two marijuana bills currently being considered by the House of Representatives. Those bills are H.R. 975 and H.R. 1227. While there is still limited support, H.R. 1227 did receive two additional co-sponsors as of April 5th.
Since the time of my last marijuana related article, “Terra Tech: An Analysis,” a third bill, or really set of bills, has been introduced. This set of bills is being spearheaded by Representative Jared Polis. This is not the first time that Polis has introduced these bills. Clearly in the past not much progress had been made. However, the political climate is different now, and with three separate legislative options, chances of at least one bill getting enough support to pass are growing.
Furthermore, this year, we saw the establishment of the “Cannabis Caucus,” a bipartisan group of congress members who are pro pot. The initial four members of the group are Dana Rohrabacher (R. California), Don Young (R. Alaska), Earl Blumenauer (D. Oregon), and Jared Polis (D. Colorado).
I first wrote about MassRoots in “Cannabis Stock Pick: MassRoots.” One of the issues facing MassRoots (MSRT) has been the delisting of its application from major app stores. For a time, Amazon’s app store was the only place to download MassRoots. However, Apple and Google have both accepted relisting of the app, with some location restrictions to ensure that the app is being used in areas where marijuana is legal. With almost full access to the app restored, we should see increased user growth.
Terra Tech (TRTC) was late with its most recent earnings report, but the earnings information itself was acceptable. Total revenue for Terra Tech came in at $25,327,000 for 2016, as compared to $9,975,000 for 2015 and $7,094,000 for 2014. The company is still very far away from a net profit, with a loss of $18,147,000 in 2016. However, right now I am far more interested in seeing growing revenue than I am in seeing a net profit.
I think a lot of investors were expecting a fair amount of growth, as it is consistent with TRTC’s track record. While there was a slight initial increase in stock price, overall, there has been little change. If stock price does start to rise, the next price target for me is roughly $0.336.
One final matter of note: a fellow contributor commented on some insider selling that occurred recently. If these sales constituted a significant amount of the total outstanding shares, I might be considered, but they do not. If the shares were preferred convertible stock, I would be a bit concerned as well. But again, that is not the case.
North American Cannabis Holdings
One stock I have been watching, but have not written a full article on yet is (USMJ). The reason I have held off on the article is because it is a trip zero stock, with price hovering between $0.0006 – $0.0009. Furthermore, it’s corporate structure is somewhat ambiguous. That being said, if the company turns out to be what it claims, it would be exactly what I am looking for in a marijuana stock. It engages in a diverse range of marijuana related business activities, along with hemp related activities. This includes “AmeriCanna Cafe,” a fast casual restaurant that will serve hemp (and eventually marijuana) related beverages and foods.
This cafe will not be an individual location, but a chain. On March 28th, USMJ announced that it would officially launch the brand at the Southwest Cannabis Conference and Expo held during April 22-23. I will continue to keep an eye on this company, and if transparency improves, or if enough interest is shown, I will write a full article on the company.
I am long TRTC and MSRT and may initiate a position in USMJ. However, USMJ is even riskier than the other stocks mentioned, which are already high risk OTC stocks. Trade at your own risk.