1st of September 2018

The markets have really been moving this week. Most of the Canadian Licensed Producers have seen significant gains. To be honest, if you're in the market right now, and are down, then you really must have had some bad luck and timing. So, given the vast majority of us are up right now, I am getting the same question again and again.

"Have I missed the boat?"

Many of you have been asking if it's still a good time to try and get into the market. To that, I say yes, but with caution. Do not chase the herd. Look to stocks that still have good potential running up till the end of the year.

And who might the herd be? Three of the biggest movers have been Canopy Growth, Cronos, and Tilray. It's obvious why Canopy has been off to the races. The Constellation deal is huge. Simply huge. Canopy essentially has circa $4 billion ready to invest into the US market the minute it opens up. Tilray. An awesome company. Massive respect for these guys and what they are doing. But you can still like a company and not its stock price. Understand that Tilray has a very, very tight float. In other words, only the shares that were made available for IPO are currently being traded. A huge amount of shares will unlock for trading in January, and this will have a significant impact on the share price. We will definitely look to add Tilray to the fund. We're just not going to follow the herd. And Cronos? They're riding the wave of enthusiasm for Cannabis Nasdaq listed stocks. It's crazy really. Their valuation of$1.6 billion is just too high right now. Again, big respect for Mike Gorenstein (the CEO) and the rest of the management team, I just cannot get excited about their share price at this level.

So, where to look?

I still maintain that the US stocks offer far greater upside in the coming months, although must state that I don't quite think the Canadian LP highs are in. There are still gains to be made. We personally like CannTrust and Organigram to name a few. And in the US, well, look to the portfolio. Most of the US stocks we hold have not seen the kind of gains their Canadian counterparts have over the past 2 weeks. That's a good place to start.

The Big Movers

Most of the Canadian producers were well up this week. Money continues to pour into these stocks and especially the 3 Nasdaq listed stocks of Canopy Growth (CGC), Tilray (TLRY), and Cronos Group (CRON). Although I don't feel that simply being on the Nasdaq is enough of a reason for these stocks to have shot up so dramatically, it does shed a little bit of insight into the US investor mindset. Seemingly easier to invest in (and with the perception of prestige) money has flowed into these names. This bodes very well for the likes of Aphria and Aurora – both of whom are rumoured to be uplisting to the Nasdaq – and very soon! A good entry point for them? Maybe.

The Losers

CV Sciences really has been the rollercoaster share this week. Significant spikes and then dips have left some traders with massive gains, and others (who bought in on the highs) now desperately looking for an out. The reasons for this volatility have been numerous.

First off, the stock has run too hard. Plain and simple. The stock is at massively high overbought levels and the current valuation is completely out of whack. Remember, we are talking about a company whose share price was at $0.40 in early April! During the week, certain trading houses went very short on the company and simultaneously released information that portrayed the company as being deceitful to its shareholders in not disclosing pertinent information pertaining to their CVSI-007 patent application (and it's rejection). Honestly, though, this is not a big deal at all. Great management, solid performance, and a booming addressable market all make for a great story. This is simply a case of what goes up (massively) must come down. We're looking for another entry point between$2.20 and $2.40. iAnthus delivered their Q2 results with 40% sales growth "The iAnthus team had its hard hats on during Q2 2018, putting in place the foundation for rapid growth going forward. We continued to make significant investments in scaling our operations, including breaking ground on a state-of-the-art cultivation facility in New York State, acquiring additional space adjacent to our flagship dispensary in Brooklyn, expanding our Florida cultivation and processing facility, and signing dispensary leases ahead of schedule in seven Florida communities with another eight in the pipeline by the end of the year." Hadley Ford, CEO of iAnthus Solid results on the back of significant gains in the number of assets.$142 million as opposed to $45 million at December 31. The bulk of this 310% increase as a result of acquisitions in Florida (GrowHealthy) and New York (Citiva) and the development of their cultivation and dispensaries in their other states of Colorado, Vermont, and New Mexico. Bottom line, they expanding and laying the foundation for continued growth. Don't forget they also got the$50 million backing from Gotham Green in May. Debt free and cash-flush, they are primed for growth in the latter half of 2018. We're looking to add to the portfolio under $5.50. The watchlist The following two companies sit on our watch list and we are patiently waiting for a better entry point. Both are superb A-list companies with outstanding technicals and fundamentals, however, their current stock price makes it very hard to justify an entry point. We will, of course, keep you updated. Green Thumb Industries Generates$13.6 Million Revenue in Q2

"The second quarter was a critical quarter for GTI. We became a publicly-traded company on June 13th. The team has been hard at work and that is reflected in the results for our first reporting period as a public company – generating solid revenue growth, raising capital, entering new markets and attracting top talent. What lies ahead is even more exciting as this rapidly evolving industry takes shape."

GTI Founder & Chairman Ben Kovler

GTI is a multi-state, vertically-integrated, cannabis consumer packaged goods company and owner-operator of the high growth national retail chain RISE Dispensaries. The current valuation is high, and with a tight float, it is difficult to justify an entry point at current prices (pending an unlock of some of the shares later this year and into the new year).

Tilray Q2 Revenue Grows 95% to $9.7 Million "We are very pleased with our strong start to 2018. Tilray is well-positioned to continue to pioneer the development of the global medical cannabis market and to become a leader in the adult-use cannabis market in Canada." Brendan Kennedy, President & CEO of Tilray Tilray has gone nuts. Plain and simple. The stock is hyperbolic and is challenging Canopy Growth for record gains these past 2 weeks. They too are a multi-state, vertically-integrated, cannabis company. The company sells its medical marijuana products on its own, with partners or through export deals, in countries including Australia, Germany, Portugal, Argentina, South Africa and Britain. Again, like GTI, also have an incredibly tight float. The current valuation?$4 billion. Crazy. Tilray remains 82-percent owned by Seattle-based private equity firm Privateer Holdings. Again, there is a significant chunk of shares due to unlock in January.  You've been warned.

Until next week.

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Mark Bernberg

Mark Bernberg is a long-time cannabis investing enthusiast and founder of The Green Fund, Asia Pacific's preeminent media house, positioned at the forefront of the global cannabis industry.