• Daily Marijuana Observer Facebook
  • Daily Marijuana Observer Twitter
  • Daily Marijuana Observer StockTwits
  • Daily Marijuana Observer SA
  • Daily Marijuana Observer Instagram
  • Daily Marijuana Observer Youtube
  • Pinterest Social Icon
  • Daily Marijuana Observer Talk Market

A Sessions-Proof Strategy: Geographic Rotation in Cannabis Stocks

January 5, 2018


Earlier today, United States Attorney General Jeff Sessions issued a memo regarding the enforcement (or lack thereof) of federal laws regarding cannabis. The memo has already caused a U.S. cannabis stock sell-off, and many are wondering if it will continue throughout the rest of the week.


Today’s U.S. Sell-Off


To state the obvious, Jeff Sessions is the U.S. Attorney General. That means that his control is confined to the United States, and only the United States! Despite this, many Canadian licensed producers sold off in trading today, causing confusion amongst participants in our forums and beyond.


It makes perfect sense why cannabis stocks like Terra Tech Corp. (OTC:TRTC) sold off, as they are totally U.S.-focused. When it comes to cannabis companies though, each one is totally different. Thanks to the recently launched cannabis-focused ETF, correlation amongst many of these names is at an all time high, which has caused many companies to move in lockstep that shouldn’t have.


So, Why Did Canadian Companies Sell Off Today?

Correlation aside, the answer in many cases is profit taking. Some of the Canadian licensed producers have risen so much in recent weeks and months, that there’s no wonder people want to take some gains off of the table. In other cases, the answer is geographic diversification. Some Canadian-listed cannabis companies also have operations or investments south of the Canadian border, which caused investors to panic.


While geographic diversification may have hurt some cannabis stocks today, it could save your portfolio tomorrow!


Geographic Rotation and Diversification


The concept of sector rotation is essentially moving investment dollars from one sector to another as markets move through various stages of an economic cycle. Simply put, some sectors perform better in an booming market, and some perform better in a down market.


At the current stage in the worldwide cannabis legalization cycle, some geographic regions are doing better than others. So what do we mean by geographic rotation? In this case, it means avoiding the cannabis companies that Jeff Sessions can ruin by moving investment dollars towards cannabis companies targeting countries other than the U.S.


Where to Look?


The quick answer - Australia.


While Jeff Sessions was drafting his memo, Australian cannabis companies were celebrating the country’s decision to expand the existing Australian cannabis cultivation and production industries through worldwide exports.



This decision by Health Minister Greg Hunt to legalize the exportation of Australian cannabis sent every one of the ASX-listed cannabis stocks we’re aware of flying. While you may not be able to access these companies on the ASX, a large handful of them are available OTC, while others are also trading on the Frankfurt Borse.




It should be noted that this is not a recommendation to buy or sell any security. Before jumping into or out of any company, be sure to consult your professional financial advisor. Investing time in due diligence can save a lot of headache and money down the line.

To stay up to date with Australian cannabis news, subscribe to our Aussie newsletter here. To stay up to date with other important developments in the cannabis industry, be sure to sign up for one or more of our other free e-mail newsletters. Also, don’t forget to connect with The Daily Marijuana Observer on Facebook, Twitter, and StockTwits.



Read more articles tagged:

Please reload

Please reload

Please reload


© Copyright 2016-2020 Smoke Show Ventures, Inc.

RSS Feed

Disclaimer: Except for the historical information and data presented herein, matters discussed in articles on this website contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future performance or achievements expressed or implied by such coverage. Smoke Show Ventures, Inc., which owns The Daily Marijuana Observer, is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. Smoke Show Ventures, Inc., which owns The Daily Marijuana Observer, may from time to time have a position in the securities mentioned herein and will increase or decrease such positions without notice. Before making specific investment decisions, readers should seek their own professional advice and that of their own professional financial adviser. Smoke Show Ventures, Inc. or its affiliates, which owns The Daily Marijuana Observer, may be compensated for its services in the form of cash-based and/or equity- based compensation in the companies it writes about, or a combination of the two. For full disclosure please visit: https://www.dailymarijuanaobserver.com/legal-disclaimer/.