102,883,226 Reasons Why Marijuana Bull Market May be Understated; The Marijuana Index Discusses Survey Feedback
March 10, 2014
Filled in: MMJ Finance
The Marijuana Index, or MJX Marijuana Index — the first and only equity tracking index for marijuana stocks, cannabis stocks, and hemp stocks featuring dynamic financial content — experienced a turbulent week as several stocks faced unprecedented interest, while others succumbed to selling pressure and possible profit taking (a credit to Alan Brochstein again, who has done a tremendous job with daily updates for the investing public in this sector via “The Daily Dab,” and his pay-to-play service 420 Investor).
Nevertheless, many stocks in the index are still “getting stoned,” highlighted by what remains the top featured article on micro-cap investor favorite SmallCapNetwork.com’s home page: ”Small Cap Marijuana News: The Marijuana Index Gets Stoned.” In a week where another article from The Marijuana Index appeared to be one of the top articles on search giant Yahoo.com at one point… The interest of the public and investment community in the index and overall marijuana market is apparent.
It will be interesting to watch as Washington’s legalization takes effect, followed by other states like Alaska pushing for similar changes to seemingly archaic laws. The index expects multiple “micro-bubbles,” where trading activity and stock prices experience subsequent peaks and valleys overall — with dramatic changes at any given point. The Bulls and Bears are likely to both be vindicated, depending on what day you pull up the index.
The Marijuana Index has several major updates pending, some of which could ripple throughout mainstream and financial media (are you reading this Jim Cramer?). Details are confidential at this time, but all readers are urged to sign-up for (free) updates on the index homepage at www.marijuanaindex.org. Investors, observers, or media who follow the marijuana industry and index must sign-up for e-mails or wait for future press releases and articles, as no information will be provided via inbound inquiry to the website (unless you are looking to advertise, then you will get some information on advertising).
Results from a recent survey conducted by the index illustrate an overwhelming interest for a fund which in some way would track The Marijuana Index or stocks within the sector in general. As expected, a staggering 97.19% of survey respondents (as of March 9th) maintain at least some level of interest in such a fund, with an overwhelming majority of 76.69% being “extremely interested.” Detailed by industry media leader and network partner Cannabis Financial Network, we appear to be at a tipping point in mainstream acceptance of marijuana.
Any future fund could signify another wave of advancement in a marijuana stock market facing growing interest, regulation, and mainstream “approval.” Illustrating the current but expanding microcosm of marijuana stocks: the only national exchange listed security currently listed in The Marijuana Index is GW Pharmaceuticals (NASDAQ: GWPH). GW Pharmaceuticals was one company highlighted in a recent article by Minyanville founder Todd Harrison: Marijuana Will Be the Single Best Investment Idea of the Next Decade. The 20-year Wall Street veteran’s interview also wisely predicts ebbs and flows in the industry, where a 10-year horizon exists with tremendous opportunity but not without “potholes, false starts, and a lot of risk.” A very fair assessment, particularly as it pertains to potholes.
One thing to track as marijuana enters uncharted financial waters is the potential role of cash-rich companies on major exchanges who could enact consolidation plans — or even IPOs, which have faced a recent resurgence (especially in the technology sector with NASDAQ: TWTR being a prime example). As legislation changes, its not entirely difficult to envision a major IPO involving a company dedicated solely to marijuana. While some are skeptical as to whether an agricultural product could consistently achieve high margins the way marijuana does, those who either medicate, indulge, or understand the value of small-batch wine or spirits recognize what Stephen King said: ”marijuana should not only be legal, it should be a cottage industry.” Even if (when?) big tobacco comes knocking with bags of cash in hand, most realize that there is no replacement for the wares of a master grower, and there will always be a market for top quality product that isn’t mass produced.
The Marijuana Index intends to track everything as it happens for investors, observers, and media — visit www.marijuanaindex.org for more information and to sign-up for free updates.
Understated Interest in Marijuana Stocks
Consider for a moment that, as of Friday March 7th, OTC Markets showed 3,181 securities listed (EDIT: visit www.otcmarkets.com/home for accurate totals, which show 9,855 total) on the various tiers therein (OTCQX, OTCQB, PINK). OTC Markets further details that, within those securities on Friday, $851 million in dollar volume traded (with approximately 5.6 billion shares exchanging hands).
Now imagine the reality that, with $851 million in aggregate trading dollar volume on Friday (usually a light trading day) — roughly $102,883,226 traded within a mere thirty-five issuers on OTC Markets that are listed on The Marijuana Index. To recap, The Marijuana Index represents less than 1% of companies on OTC Markets (EDIT: as above, the actual number is much lower than 1% of total companies, visit www.otcmarkets.com/home for current issuer total) and accounted for roughly 12% of the total dollar volume of all industries combined. Its no wonder MarijuanaIndex.org has exponential increases in traffic and advertiser interest.
While FINRA was right to caution investors about some OTC companies and the possibility of fraud (inherent within any speculative stock, maybe moreso in a bull market like this), the relevance of retail liquidity and investor interest can’t be underestimated. It would appear the investing public is absolutely honed in, hoping that some “green rush” issuers eventually make it to the big leagues of NASDAQ, AMEX, or NYSE where true buy-side and sell-side analysts can throw their respective two-cents in, and where company valuation is ideally expressed in revenues or earnings, not just potential. Speaking of valuation based upon potential, surely everyone was paying attention to Facebook’s (NASDAQ: FB) acquisition of WhatsApp for $19 billion. Oh, the places you can go on the “big boards.”
Even the aforementioned fast-talking mainstream financial guru Jim Cramer is entering the fold of cannabis coverage, where he intimated that he may cover the sector from time-to-time. Imagine a day when The Marijuana Index is covered by Jim Cramer and other prominent financial media on a regular basis, possibly in the same breath as other more established indices. It could happen, just like big cable networks will probably allow marijuana advertisements some day (or maybe companies like MarijuanaDoctors.com will think of new ways to get more than they bargained for in free publicity, even if the ads don’t run!)
Though obviously not mutually exclusive, companies who learn to leverage their relative high valuation and liquidity for revenue-producing acquisitions or capital raises could position for long-term success. Bigger deals such as the $101.1 million (gross) closing of NASDAQ listed ADSs in GW Pharmaceuticals at $36 (NASDAQ: GWPH) illustrate the capacity and comfort for future deals in the space. If you were to ask bankers with Morgan Stanley & Co., Cowen and Cowen Company, Piper Jaffray & Co. and Cannaccord Genuity five years ago if they thought about executing a $100 million raise for a cannabinoid therapeutic company… One might imagine their response at the time.
Improving The Marijuana Index Based on Feedback from Investing Public
The mission of The Marijuana Index is to remain the top resource for marijuana investors and public issuers in the sector, and a recent survey has provided much-needed feedback on what investors and observers are looking for on public companies. Considered by respondents to be the most vital future addition to the site, the index will evaluate methods to deploy third-party research for the sector and index companies which ideally provide additional information and analysis on these issuers to better assist investors, their financial advisors, or the general public in due diligence.
Please e-mail email@example.com if:
* You are interested in joining a possible panel which contributes research, articles, and various content to The Marijuana Index or related future websites;
* You would like to refer ideal candidates who possess credentials to evaluate companies or offer commentary on events in the sector, based upon their education, accreditation, or media footprint; or
* You represent third-party investment research firms who might be paid by the index, listed companies, or sponsors to assemble research reports for companies in the index.
Furthermore, you can submit articles to the index, which will be posted or distributed at the sole discretion of the index, by sending them to firstname.lastname@example.org
Based on data which indicates the desire of survey respondents and visitors, and as a commitment to further transparency, The Marijuana Index expects to soon implement a multi-tier system similar to the one employed by FINRA-operated OTC Markets. By separating issuers who file currently with the SEC from those which don’t or aren’t required to, the index will aim to provide easier access and identification of issuers who have demonstrated a commitment and expense to become “OTCQB” or higher tier on OTC Markets. The Marijuana Index will also launch The Marijuana Index: Canada for securities which are exclusive to Canadian markets, and will eye other exchanges as marijuana policies change worldwide in other financial markets.
Be one of the first to know when The Marijuana Index launches the new tier system by visiting www.marijuanaindex.org and entering your e-mail (free service). Additional surveys may also be released as weighting, constituents, and future listing requirements are changed as needed to reflect the ever-changing market.
Documentary on the Way
Based in part upon overwhelming interest in the index, the business of marijuana, and public companies in the sector — The Marijuana Index will soon help market a documentary (intended to become a box office film) which hopes to offer unique insight into the business of cannabis. The media is becoming saturated with various degrees of documentaries covering similar topics surrounding cannabis, but as a central hub for the marijuana investment community, the index may be uniquely positioned to support a feature film. Details are currently confidential, but interest in a documentary has been expressed by visitors of MarijuanaIndex.org. Including executives or companies listed from The Marijuana Index within the documentary may also feed the expressed desire for more information on these issuers as they (hopefully) achieve more milestones and brave the public markets alongside the investing public.
Readers and site visitors are urged to sign-up for The Marijuana Index Newsletter for further updates on the documentary — visit www.marijuanaindex.org and enter your e-mail (free service).
About The Marijuana Index
Network partners of marijuana media leaders Cannabis Financial Network (www.cannabisfn.com), The Marijuana Index is the first and only registered equity tracking index for marijuana stocks, cannabis stocks, and hemp stocks – providing investors and listed companies with dynamic market data and streaming content. Currently detailing more than thirty publicly traded issuers, The Marijuana Index provides marijuana investors and interested observers with a medium for research, charts, and a centralized news source. Readers are urged to visit www.marijuanaindex.org for up-to-date information and to sign up for updates. Follow The Marijuana Index on Twitter @MarijuanaIndex.
As the index integrates several improvements, investor and site visitor feedback is requested by visiting this link:
Companies or websites wishing to advertise on the index should contact email@example.com
The Marijuana Index (MJX Marijuana Index, the “index”) is a data aggregation service and does not provide promotional efforts, other than future sponsorship or visual advertisements, unless otherwise noted. The Marijuana Index does not offer investment advice. Nothing listed on MarijuanaIndex.org or within this release is an offer to buy or sell securities. Readers are cautioned against using information obtained from The Marijuana Index as a basis for any investment decision. The Marijuana Index makes no warranties or representations as to the accuracy of posted or streamed information. The Marijuana Index was not paid by any companies listed within this press release, but reserves the right to buy or sell shares in listed companies without notice. The word “registered” above as it relates to the index is not meant to imply registration with the SEC – The Marijuana Index is registered with leading financial content provider Quotemedia with the ticker ^MMJ. The Marijuana Index makes no expressed or implied warranties or representations regarding the forthcoming changes to the index, tier system, or current and future features of the website. For more information on our disclaimer, visit www.marijuanaindex.org and click on “About Us” and “Disclaimer.”
INCLUSION IN THE MARIJUANA INDEX DOES NOT IMPLY THAT DUE DILIGENCE OR EVALUATION ON ANY LEVEL HAS BEEN CONDUCTED ON LISTED COMPANIES.