Summary
The Canadian legislature has legalized recreational cannabis nationwide.
An escalating trade war and a tepid rebound in Canadian cannabis stocks left the portfolio running in the red for the second quarter in a row.
I’m rebalancing the portfolio, trimming profits, and preparing for the eventual legalization of recreational cannabis nationwide in the United States.
Two major players in the North American cannabis industry, Tilray and Acreage Holdings, will IPO in the second half of 2018. I plan to establish a position in both.
Legal Weed
On June 19, the Canadian Senate passed Bill C-45, legalizing recreational cannabis nationwide. Starting October 17, dispensaries across Canada will be able to sell cannabis to non-medical users. This new recreational market is expected to grow to around $8 billion over the next 2-3 years. Anticipating these events, I started to add positions in Canadian (and a few American) cannabis companies to my portfolio.
Who Is Bay Area Kid?
I am a 28-year-old Marine veteran currently enrolled in the MBA program at the University of Nevada, Las Vegas. I’ve been managing my own portfolio since 2010 and purchased a rental property in 2016. My long-term investment goal is to make enough money on the stock market to allow me to buy more rental properties, with the end result of an early retirement funded by my monthly rental income.
How I Built The Portfolio
The BAK portfolio was started in March 2017, with the primary goal of capitalizing on a number of emerging industries, most notably cannabis and AI. The only rule I have for the portfolio is that no single stock can make up more than 15% of the entire portfolio. You can read more about the creation of the portfolio in my original article The BAK Portfolio: Making Money On Cannabis And Tech
The Bay Area Kid Portfolio – Q2 2018
With nationwide Canadian legalization already baked into their stock prices, I decided to take some of the profits I made on Canopy Growth (CGC), Aurora (OTCQX:ACBFF), and Aphria (OTCQB:APHQF), among others, and invest them in a few smaller producers, some ancillary cannabis companies, a newly traded producer in the United States and a Canadian company looking to become the dominant medical cannabis producer in Colombia and, eventually, all of South America.
Credit:Â seekingalpha.com
