Relax and inhale. The marijuana rally still isn’t over, says Bruce Campbell, founder of StoneCastle Investment Management Inc, who is launching Canada’s first large cannabis mutual fund Friday.
The StoneCastle Cannabis Growth Fund comes into play a month before recreational cannabis is set to become legal in Canada on October 17.
“I wouldn’t be surprised if we saw a steep, sharp pullback, which will scare all the people that got in late, have a little bit of consolidation, and then we start the next phase up,” Bruce Campbell, founder of StoneCastle Investment Management Inc., which has about C$150mln (US$115mln) in assets, told Bloomberg.
Campbell advised investors to get ready for some more “scary down days” just as cannabis-related stocks tumbled Thursday following a report that the US may bar Canadians who invest in the companies from entering the country.
A Politico headline shrilled that “Canadian marijuana users, workers and investors risk lifetime border ban.”
“The move has potential to disrupt border crossings between the US and Canada for travelers who run afoul of American drug laws, even if their activities are legal in Canada,” reported Politico, quoting Todd Owen, executive assistant commissioner for the Office of Field Operations.
Owen gave Politico a detailed preview of how the US Customs and Border Protection agency will continue to apply long-standing US federal laws that treat marijuana as a banned substance and participants in the cannabis industry as drug traffickers.
The cannabis market may still have upside after a period of consolidation as the hype surrounding Big Alcohol/Big Tobacco partnerships continue to generate headlines. Cannabis stocks which retreated over the last few trading days found their mojo Friday with Canopy Growth Corp (NYSE:CGC) up 6.2% to US$46.84 and Cronos Group Inc (NASDAQ:CRON) up a similar 6.7% to US$10.79.
Contact Uttara Choudhury at [email protected]