Tuesday Travel Now With Your US Dollar

Global markets are in rally mode for the second day. The U.S. dollar has eased a bit, oil continues to bounce off of recent lows and Greece may step back from the ledge, so investors are feeling a bit of a renewed risk appetite. It is interesting to see that Biotech is sitting out on the rally. Currency is cheap in other countries. The S&P 500 rallied into the close with a gain of 1.44% to 2,050.

Cannabis stocks are not feeling quite the same positive risk sentiment as the broader markets. Investors, traders and speculators may be feeling a bit of fatigue with these seasoned tickers, many of which will amount to nothing. New opportunities are on the horizon and they can’t come soon enough. Until then, yesterday’s pop seems to be just that for the time being.

Daily Positive: GW Pharma is scheduled to report earnings before the opening bell tomorrow. Consensus estimates are for $12.1 million in revenue with an earnings per share of -$1.25 for Q1 2015. There seemed to be some positive positioning ahead of the announcement as GWPH moved up 2.09% on the day.

Daily Negative: The U.S. dollar is off recent highs versus the Canadian dollar, which seemed supportive to Canadian LPs yesterday. However, the dollar continued to soften today and the LPs failed to participate in the upside despite strength in the Canadian equity markets.

How has the U.S. dollar’s upward movement with foreign currency lowering impacted the cannabis investor experience? Well, just like with any other industry, when you are investing in foreign companies, you are taking on currency risk. Right now, much of the investing to be done is in the U.S., with Canada offering some names and a couple of others abroad.

As investors we must consider the potential benefits and drawbacks of placing investments and considering currency is just one aspect. Right now, the global marketplace is certainly in flux and the U.S. dollar has been moving upward more than it has in recent memory. One thing is for sure, traveling abroad with the U.S. dollar sure feels better than it did in the recent past!


The discussion above is provided for informational purposes only and does not constitute an offer of, or solicitation for, any investment services or products offered by the author. The author is not making any investment recommendations and the opinions above do not constitute investment advice. Reference to above indices [and companies] is based on information provided by sources the author believes to be credible. Investing in the cannabis industry, as with other industries, presents certain risks including the risk of loss on an investment.

Morgan is a Founding Partner and Managing Director of Poseidon Asset Management. He is the Chief Investor of their Cannabis Focused Fund. Morgan previously worked for a privately owned Registered Investment Adviser and earlier was at UBS Financial Services focusing on wealth management. Morgan believes in the potential of the cannabis industry and likes having an active involvement as it develops. You can follow him on Twitter @PoseidonAsset.

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