Barry Wald, a friend of Good Earth Organics (GEO), wrote on Seeking Alphas this summer that: In the gold rush days of the 1800s, successful entrepreneurs were not just the miners but also the "pick and shovel" suppliers and service providers and their investment partners. Today, many investors are seeking "gold" in the developing cannabis industry. Savvy investors should note the varying risks of investing in cannabis cultivators versus investing in those in the industry supply chain.
Between 2016 and 2019, investors in cannabis cultivators enjoyed more than a 70% return. Since then, however, equity markets have not been friendly to these stocks. Legislative uncertainties and taxation concerns now overshadow rosy revenue growth forecasts; one needs to look no further than the one-year performance of the cannabis ETFs to see the impact. As a group, cannabis ETFs have underperformed major market indices with one-year price declines ranging from 29% to 48% versus gains of 17% for both the S&P 500 and Russell 3000 indices. (Source: Morningstar, 8/24/2020.)." While things have improved dramatically since August -- in large part because of the "Green Wave" we saw in the November election the ancillary stocks are really bringing home the gold!
"Ancillary" cannabis players, as defined by Daily Marijuana Observer, are cannabis companies providing strategic supply chain inputs and services to the cannabis growers. Ranging from agricultural technologies and hydroponic solutions (GRWG, HYFM), to building infrastructures (IIPR), to soils and amendments -- like GEO -- to media services, these ancillary players find ways to make money from the marijuana and hemp industries without actually touching the plant. As such they are not subject to the legal and tax issues of the cultivators, and they are free to operate from any location, can ship their products to any state, and are free to enter new markets whether cannabis-related or not, at whatever pace is right for their businesses.
You can read the full article here and learn more about how you can invest in GEO and be part of the growth of this industry!
