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There is less than one month left in the year and we expect 2023 to be a banner year for the cannabis sector.
Although most of 2022 has been extremely challenging for cannabis stocks, the sector benefited from pro-cannabis legislation having recently gained traction in the United States (US) Congress.
Despite the recent bounce higher for the cannabis sector, many operators are trading at near all-time lows and we find valuations to be attractive for certain companies. We are especially bullish on multi-state-operators (MSOs) that are levered to high-profile recreational cannabis markets in the US.
During the last month, we became slightly more favorable on certain Canadian Licensed Producers (LPs). We believe the Canadian cannabis sector is starting to find real support and attribute this to pro-cannabis legislation gaining traction in the US.
Most North American cannabis companies recently reported quarterly financial results and several recorded strong growth on a year-over-year basis. We believe the sector’s near-term performance is based on US cannabis legislation and legalization trends in the European Union (EU).
We are bullish on the cannabis opportunity in the EU and believe that Germany is leading the charge with this trend. After Germany announced plans to move forward with legalizing recreational cannabis, several EU members expressed a more favorable view on cannabis and we find this to be a significant development.
To learn more about important trends in the cannabis sector, please send an email to suppport@technical420.com with the subject “Important Cannabis Trends” to be added to our distribution list.
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