Who Is Jeff sessions you ask? … Or maybe not. Maybe you follow along with American Politics more than the average Joe. If you’re anything like myself, and only tune into political banter during major events, then I wouldn’t be surprised if you’ve not heard of the name Jeff Sessions. Jeff has been the public enemy number 1 for many years, as aside from his notably poor choices against the public in favour of federal government, Jeff was unquestionably the most notorious advocate against Marijuana reform policy. Now you may begin to see the picture.
There is nothing but huge relief to Cannabis advocates across all of America, as Jeff was asked to resign as Attorney General last week by president Trump himself. As attorney General, he had done everything in his power over the years to limit marijuana policy from progressing. Which answers the second question; why as a Cannabis investor this should bring you joy. Granted, as marijuana policy reform is already majorly underway in both red and blue states, his leaving may not make a major impact moving forward, other than it will stop the active pressure he put against the substance, comparing it to the likes of Heroin, opioids and meth on many occasions.
Lets not celebrate too quickly, as the new AG has not been officially chosen we can only hope the grass will be greener on this side. However it’s fair to assume that anyone (even if apposed to cannabis) would be less of threat then Jeff staying in office. Voters definitely want to see the grass “Greener” (pun intended,) as US states all trend towards cannabis legalization during these recent midterm elections. Legal Cannabis use was approved in Michigan, Utah and Missouri, however North Dakota failed by a 19% margin. Let it be noted that North Dakota approved a similar bill 2 years earlier in a much more difficult landscape.
American cannabis stocks were also seeing favourable bull runs after the election results, and here at The Cannabis Investor we have our eyes pealed on a handful of American companies that we believe remain undervalued even as the climate shifts ever so steadily towards full US federal legalization.
First on our watch list is Liberty Health Sciences (CSE: LHS) (OTCQX: LHSIF), a small cap stock (400m market cap) that is compared to Tilray by few, however un-noticed by many. Despite the hype around many other US names, LHS is extremely overlooked. With offices in Toronto and operational heritage rooting in Florida, they pose a great investment for anyone wanting exposure into US markets.
The company recently began production of over 41,200 square feet of growing space in Florida and has a retrofitting project underway that should raise its total growing space to around 225,000 square feet by early next year. This will then make it the largest producer in Florida. Liberty currently operates four dispensaries in Florida along with six delivery centers. The company anticipates opening seven additional dispensaries throughout the state by early 2019. The state of Florida allows licensed producers to operate up to 30 dispensaries, so they have a lot of room to grow.
With Medical Cannabis sales forecasted at 1.8 Billion in Florida within the next 3-4 years, even Major Canadian producer Aphria (TSX: APHA) (NYSE: APHA) could not take their eyes off of LHS. APHA recently held a major stake in the company, however was forced to sell their share down to a 28% by Canadian law, as the TSX exchange currently does not allow our companies to hold significant operations in the US. Aphria now holds an agreement with LHS, which allows them to re purchase those shares at the same price within 18 months, IF the laws happen to change. If Aphria is that interested in regaining their additional shares back, maybe that is a sign of a bright future for LHS.
At this point we urge all investors to continue to search for stocks that will give them exposure to American markets. Adding starting positions to such companies will give them a head start. Especially adding stocks that are relatively priced to peers, compared by market caps and number of assets.
Remember to follow the story, and always do your own due diligence when investing!
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