On January 1st 2024 I wrote down the following 11 precise & sometimes contrarian Cannabis Predictions for 2024:
Significant Cannabis reforms (Schedule 3 and/or SAFEBanking) will be announced before 4/30/2024
Throughout 2024, $MSOS will trade above the low of $4.78 from August 2023
In 2024, $MSOS will trend as #1 on the Stocktwits Trending list on 5 or more trading days
In 2024, individual cannabis stocks (most likely $TLRY or $HITI) will trend as top 10 on the Stocktwits Trending list on 5 or more trading days
Cannabis stocks will rise in 2024 & within the year, 12 (or more) of the following 16 high revenue cannabis stocks will gain more than 200%: $GTBIF $HITI $CURLF $TCNNF $JUSHF $AYRWF $TSNDF $SNDL $VRNOF $MAPS $CRLBF $CBSTF $AAWH $TLRY $ACB $CGC
Cannabis stocks will rise in 2024 & end the year with 12 (or more) of the following 16 high revenue cannabis stocks gaining more than 150%: $GTBIF $HITI $CURLF $TCNNF $JUSHF $AYRWF $TSNDF $SNDL $VRNOF $MAPS $CRLBF $CBSTF $AAWH $TLRY $ACB $CGC
Cannabis ETFs will rise in 2024 & within the year, with 5 (or more) of the following 7 cannabis ETFs will gain more than 150%: $MSOS $MJ $YOLO $MJUS $CNBS $THCX $POTX
Cannabis ETFs will rise in 2024 & end the year with 5 (or more) of the following 7 cannabis ETFs gaining more than 100%: $MSOS $MJ $YOLO $MJUS $CNBS $THCX $POTX
The $YOLO ETF will end 2024 with higher gains than the following 6 ETFs: $MSOS $MJ $MJUS $CNBS $THCX $POTX
The $MSOX ETF will end 2024 underperforming (lower gains) than the following 7 ETFs: $MSOS $MJ $YOLO $MJUS $CNBS $THCX $POTX
The Adastra Cannabis Portfolio (80% $MSOS + 20% $HITI) will end 2024 with higher gains than the following 8 ETFs: $MSOS $MJ $YOLO $MJUS $CNBS $THCX $POTX $MSOX
Some of you will read these and laugh. I don’t blame you. The three tables below track the predictions and will be revised at least once a month. The predictions are data driven and I will share the rational below on each prediction, but will highlight that nobody can predict the future and I am not an advisor/analyst. Given the precision, I would be happy to get 7 or more of the 11 to be correct by end of year 2024.
Adastra's Cannabis Predictions for 2024 Tracker 1: Predictions Tracker
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Rationale for Adastra’s 9 Cannabis Predictions for 2024
Prediction #1: Significant Cannabis reforms (Schedule 3 and/or SAFEBanking) will be announced before 4/30/2024
I have followed the words and actions of US leaders including Biden, Schumer, etc and have come to the conclusion that the Democrats will use Cannabis reforms to bring in voters for the 2024 election. They could have passed reforms in the past if they had made it a priority. Given the rise in crime at Cannabis dispensaries and the unnecessary deaths of cannabis employees and police personnel, I was convinced reforms would happen earlier. But it seems that these were stalled on purpose, so that they could be used in 2024 to improve the election prospects of the Democrats. Biden’s popularity is low. To bring in voters, the cannabis reforms will need to be meaningful.
The top reform I’m anticipating is the rescheduling of Cannabis from Schedule 1 to Schedule 3. The HHS has recommended it and the DEA is currently reviewing. The other reform that can be impactful would be SAFE Banking. But I have grown cynical with Schumer’s lack of action and think this is a low probability event. I predict however, that some meaningful reforms will be announced (DEA Rescheduling and/or SAFE Banking brought to vote in Senate) on or before April 30, 2024. It is likely that this might happen around 4/20 for dramatic purposes. But for any reforms to have an impact prior to the elections, it would need to happen earlier in April or earlier.
Prediction #2: Throughout 2024, $MSOS will trade above the low of $4.78 from August 2023
I had predicted (correct so far) the bottom for the $MSOS ETF at $4.78 on August 30, 2023.
I’m predicting that $MSOS will trade above $4.78 on every trading day of 2024.
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Prediction #3: In 2024, $MSOS will trend as #1 on the Stocktwits Trending list on 5 or more trading days
Stocktwits has a trending page and posts top 10 trending tickers for the day. This is across a very large number of publicly traded stocks and ETFs. I'm predicting $MSOS will hit #1 on 5 or more trading days in 2024.
This has not yet happened. But on January 5, 2024, $MSOS did hit #2 trending rank, second only to $AAPL.
Prediction #4: In 2024, individual cannabis stocks (most likely $TLRY or $HITI) will trend as top 10 on the Stocktwits Trending list on 5 or more trading days
I'm predicting that individual cannabis stocks will trend in the top 10 on Stocktwits on 5 or more trading days in 2024.
Prediction #5: Cannabis stocks will rise in 2024 & within the year, 12 (or more) of the following 16 high revenue cannabis stocks will gain more than 200%: $GTBIF $HITI $CURLF $TCNNF $JUSHF $AYRWF $TSNDF $SNDL $VRNOF $MAPS $CRLBF $CBSTF $AAWH $TLRY $ACB $CGC
This blog tracks 16 high revenue Cannabis stocks in the Best Cannabis Stocks analysis. Within the year 2024, I’m predicting 12 or more of these stocks will gain (at some point) more that 200% from the share price on January 1st, 2024.
Prediction #6: Cannabis stocks will rise in 2024 & end the year with 12 (or more) of the following 16 high revenue cannabis stocks gaining more than 150%: $GTBIF $HITI $CURLF $TCNNF $JUSHF $AYRWF $TSNDF $SNDL $VRNOF $MAPS $CRLBF $CBSTF $AAWH $TLRY $ACB $CGC
At the end of the year 2024, I’m predicting 12 or more of these stocks will close at share prices more that 150% from the share price on January 1st, 2024.
Prediction #7: Cannabis ETFs will rise in 2024 & within the year, 5 (or more) of the following 7 cannabis ETFs will gain more than 150%: $MSOS $MJ $YOLO $MJUS $CNBS $THCX $POTX
This blog tracks 7 Cannabis ETFs in the Cannabis ETF Analysis page. Within the year 2024, I’m predicting 5 or more of these stocks will gain (at some point) more that 150% from the share price on January 1st, 2024.
Prediction #8: Cannabis ETFs will rise in 2024 & end the year with 5 (or more) of the following 7 cannabis ETFs gaining more than 100%: $MSOS $MJ $YOLO $MJUS $CNBS $THCX $POTX
At the end of the year 2024, I’m predicting 5 or more of these ETFs will close at share prices more that 100% from the share price on January 1st, 2024.
Given the prolonged stagnation of cannabis stocks, a first look at the stock and ETF price targets will look ridiculous and far fetched. But they are based on the main analysis this blog's analysis is built off, the Historic Bull Market Valuations analysis:
This leads to my investment thesis for cannabis stocks that can be summarized in the following points:
1. The cannabis stocks trade more on hype than on fundamentals
2. In the two previous cannabis bull runs (2018 for Canadian cannabis legalization and 2021 for promised, but undelivered US cannabis reforms), stocks traded at logic and fundamentals defying high valuations of double and even triple digit PS ratios. The Historic Bull Market Valuations analysis shows visually the extent of this insanity. A point to note is that the Nasdaq listed stocks traded at much higher valuations than OTC listed stocks
3. The next bull run in cannabis stocks will need meaningful US cannabis reforms. This will likely be from either the DEA rescheduling cannabis to schedule 3 or the passing of banking reforms (SAFER Banking Act). There is a good probability that meaningful reforms will pass in the weeks/months to follow, well before the US Presidential elections. The Democrats have stalled on promised cannabis reforms and will use it to improve Biden's chances for re-election
4. The best gains in cannabis stocks will only happen when there is confirmation that stocks stagnating on the OTC exchange will get to uplist to Nasdaq/NYSE and there is confirmation that institutional investors can easily invest in the sector
5. Although nothing can be predicted with certainty, cannabis reforms will be a once in a century event, not seen since the end of alcohol prohibition (1933). The entry of institutional investors, along with hype/FOMO from retail investors, will likely lead to similar valuations (PS 5+, 10+ or maybe even 20+) for the Nasdaq listed stocks, as seen in the 2018 & 2021 bull runs. The color coding stays Green (darker to lighter shades) from PS ratios from 0 to 10, and switches to Yellow at 10. This is designed to give visual data points for investors to decide (for themselves based on their individual risk profile) when to reduce risks or take profits during the bull run
6. There is a good probability that Nasdaq listed stocks will outperform OTC listed stocks, prior to the OTC listed stocks getting uplisted. This is based on the historical analysis of previous bull markets and because many institutional investors can invest in Nasdaq listed stocks but not on OTC listed stocks. In addition, established retail investors, many of whom I have discussed OTC listed MSO stocks with in real life, refuse to invest in stocks listed on illiquid and easy to manipulate OTC exchange.
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Prediction #9: The $YOLO ETF will end 2024 with higher gains than the following 6 ETFs: $MSOS $MJ $MJUS $CNBS $THCX $POTX
This is a contrarian call, based on timing of funds flowing into the cannabis sector. As mentioned in the cannabis investment thesis above, there is a good probability that Nasdaq listed stocks will outperform OTC listed stocks, prior to the OTC listed stocks getting uplisted.
In such a scenario, Nasdaq listed stocks will outperform initially, with OTC listed stocks catching up around the time of confirmation of uplisting to Nasdaq/NYSE. $YOLO is my top pick from the ETFs because it is actively managed and has a good blend of Nasdaq listed stocks, while also having $MSOS as the largest holding by AUM. The scenario I predict is that the Nasdaq listed stocks will rise first, giving the fund manager(s) the opportunity to rebalance between higher valued Nasdaq listed stocks and likely relatively undervalued OTC listed stocks. Since $YOLO and $MSOS have the same fund manager(s), there is flexibility and the potential to actively manage holdings for best gains.
Prediction #10: The $MSOX ETF will end 2024 underperforming (lower gains) than the following 7 ETFs: $MSOS $MJ $YOLO $MJUS $CNBS $THCX $POTX
The $MSOX ETF is a 2X leveraged ETF on the $MSOS ETF. In my early days of investing I actually lost money in a leveraged Energy ETF at a time when Oil prices were rising. My mistake was to buy/hold, not factoring in the impact of decay. I won’t go into it, but you can search “leveraged ETF decay” and learn about it. Leveraged ETFs are for highly skilled traders who have expertise in timing their entries and exits. These are not for buy/hold investors. My prediction is that the $MSOX ETF will underperform the following 7 ETFs covered in the Cannabis ETF Analysis page: $MSOS $MJ $YOLO $MJUS $CNBS $THCX $POTX. Results will be tracked in the table presented earlier in this blog post.
Prediction #11: The Adastra Cannabis Portfolio (80% $MSOS + 20% $HITI) will end 2024 with higher gains than the following 8 ETFs: $MSOS $MJ $YOLO $MJUS $CNBS $THCX $POTX $MSOX
For this prediction, I have created a hypothetical portfolio that is very simple with only 2 tickers and has the potential to outperform all the ETFs covered in the Cannabis ETF Analysis page. The Adastra Cannabis Portfolio is a simple blend of 80% $MSOS + 20% $HITI.
While $YOLO is my top pick in the ETFs, I also have a high regard for the $MSOS ETF. I have tracked this for 3 years and seen the improvements in holdings towards stocks I deem higher quality. At the start of 2024, 9 of the top 10 holding of $MSOS are high revenue stocks covered and highly ranked in the Best Cannabis Stocks analysis. Many of these have excellent growth per the Revenue Growth Analysis, are consistently AEBITDA positive per the AEBITDA Analysis, and will gain significantly from US reforms including tax reforms for the cannabis industry. My two MSO investments, Green Thumb and Curaleaf, happen to be the top 2 holding for the $MSOS ETF. Also, the top stock on my watch list, Trulieve, is a top 4 holding. You can click on the links, Curaleaf, Green Thumb, Trulieve, to read my detailed investment thesis and scenario analysis for these 3 MSOs. The $MSOS ETF has a good blend of lower risk large companies and smaller companies that have the potential to outperform in terms of share price gains.
The ETF however is missing my top Nasdaq pick, High Tide. This company is lesser known and still a hidden gem that has ranked high in my data driven analysis. It has a lot to gain from US reforms because it has 3 million existing US customers across 5 ecommerce platforms. These customers are knowledgeable cannabis consumers who currently buy accessories and Cannabinoid (CBD, CBG, CBC, CBN) products. Reforms should allow High Tide to leverage these customers by adding THC products to ecommerce platforms where allowed. Detailed investment thesis and scenario analysis are presented in my High Tide page.
My analysis indicates that a combination of $MSOS (80%) and $HITI (20%) will outperform all ETFs covered in this blog's Cannabis ETF Analysis page, including $YOLO. As for why I did not select $YOLO + $HITI, $YOLO already has $HITI and $MSOS is the better known name, simplifying the chosen portfolio.
I’m curious to see how many of these 11 predictions come true. When a bull run does happen, I expect all cannabis stocks to rise, except those that destroy shareholder value through excessive dilution. So, this is an exercise is identifying potential outperformers, should this sector rally.
Wishing all cannabis investors success in 2024, after 3 years of hell!
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Disclosure: I (username Adastra) am an investor not a trader. I am bullish on the Cannabis sector as a long-term investment (2026 and beyond), provided stocks/ETFs are carefully picked based on data-driven due diligence. Of the 16 stocks covered in the Best Cannabis Stocks analysis, I have invested only in my top 3 picks: High Tide, Green Thumb and Curaleaf. But my analysis indicates (without any guarantees) that there is a potential for impressive gains in investing in the stocks best ranked in the analysis, including WM Technology, and Trulieve, which have a dedicated page with detailed analysis in the STOCKS category. I reserve the right to buy or sell at any time any of the stocks mentioned in this blog. I do not short stocks and never will short any stock in a company that makes the world a better place. I do not have insider knowledge of any company covered in this blog. All data used for analysis is from public sources. I have received (as of last update date of this page) ZERO funding for this blog from any of the companies featured in this blog.