Here’s their introduction……..As we all prepare to wrap up 2019, a year that can’t end fast enough for many investors and operators in the cannabis industry, we want to share our thoughts about the year ahead, as we think we bottomed out this week and expect the year to end on a more positive note. We were a bit premature in both timing and price level when we suggested that the bottom was within 10% and within two weeks in early October, but we think that the tone did change this past week as we anticipated in our last newsletter. Indeed, the market rallied after making a new low on Monday, and it is positioned to possibly break a string of seven consecutive monthly declines as we end November this week.
We predicted strong numbers from the biggest MSOs and a favorable response to them, and that, in our opinion, was one of the three factors that helped engender a massive rally off of multi-year lows in the Global Cannabis Stock Index, which remains down 8.4% this month and 32.1% this year despite the lift. Perhaps the historic favorable vote for the Marijuana Opportunity Reinvestment and Expungement Act of 2019 (MORE Act) played a role as well, but the more important factor, in our view, was the process of Aurora Cannabis shoring up its balance sheet by allowing holders of its convertible notes to convert to stock at a discount to the volume-weighted average price over two different periods. This painful process pressured its stock along with other Canadian LPs, but the market experienced what looks like a capitulation low on Tuesday morning ahead of an explosive rally over the balance of the week.