Cannabis Corner: Winners and Losers

The divergence we highlighted last week in Big Cannabis continues. There are clear winners and losers in the group now.

Over the past month, Canopy Growth Corp. (NYSE:CGC) and my personal favorite cultivator Aphria Inc. (NASDAQ:APHA) have rebounded a breathtaking 40 percent and 29 percent, respectively. They’re obvious winners.

But Aurora Cannabis Inc. (NYSE:ACB) has gone nowhere over that period and Tilray Inc. (NASDAQ:TLRY) is down 13 percent. That stock really can’t afford to miss the bounce. It has fallen 60 percent since June.

CGC has distinguished itself with a clear show of confidence from strategic investor Constellation Brands Inc. (NYSE:STZ), which installed its own chief financial officer as head of the once-leaderless cannabis company.

As someone who’s run my share of corporate restructuring programs, this kind of parachute appointment is about more than simply moving executive talent where it’s most needed. The real goal here is to permanently align the companies culturally.

That’s a good thing on Wall Street because it means the world’s biggest beer bottler sees long-term potential here. STZ isn’t going to write off its investment in legal cannabis and walk away.

And as for APHA, focusing on the medical market has been a steadier route to profitability. Nervous investors can see that this is much less speculative than any of the recreational stocks.

Now tell me in short words what makes ACB or TLRY special or even what differentiates them from each other. All the typical investor can see is that they both distribute a lot of dried plant matter and are struggling to achieve scale before they run out of money.

Given that kind of choice, money eventually will flow from the generic commodity names into those with a more compelling proposition. That’s simply how the market works.

We’ll keep watching that flow. Once Wall Street figures out that a few of these stocks are bouncing back, there might be a trickle-down effect to help ACB and TLRY join the party.

In the meantime, CGC and APHA have finally captured 50-day support and have a long way to rally before hitting resistance. They’ve fallen far. Those looking for a lot of upside can have a lot of fun investing here.

This is a buying opportunity if you’re selective. We’re choosy in my Turbo Trader Marijuana Millionaires Portfolio. Satisfaction may be on the way.