Canadian CANNAINVESTOR Magazine October 2017 - Page 132

Quite complicated indeed yet deceivingly simple and now think about where any new investment dollars into the industry likely originates from – investments elsewhere. Remember the Monty Hall Problem? Remember how Stock Promoters and Influencers tied to other industries appear bearish on the Cannabis Industry? The added water in the “glasses” exercise is water leaking out of investments in these other industries causing downward pressure on ROI in those other unrelated investments. These forces are all in competition with one another with complete indifference to how it affects the Retail Investor. Now add hucksters running their share price manipulation games; bogus websites and domain name grabs; creating multiple accounts on social media and bulletin boards; etc … it can be over-whelming. A very real and recent example can be found on September 16th. The day after the game changing MOUs were announced between the Province of New Brunswick and Organigram Holdings Inc (TSXV:OGI;OTC:OGRMF) and also with Canopy Growth Corporation (TSX:WEED;OTC:TWMJF). Eight Capital raised the price target of OGI to over $4.00 and owners of OGI shares and warrants were rewarded nicely that same day. Understanding how a guaranteed contract to purchase a significant percentage of harvests is not difficult to appreciate; however, one industry promoter took to social media to state “don’t see how they can make money on the deal”. This promoter has many companies as clients – an example of the Monty Hall Problem.

The example often given is what is more likely: the current share price of $10 for an existing larger LP reaching $30 before the share price of a late stage applicant reaching $0.24 from its current share price of $0.08? These latter stage applicants may also be M&A targets. Companies you are bullish on that have trading warrants may be just the way to maximize ROI. When Organigram announced its MOU with the government of NB, its share price rose 16.74% on September 15th but warrants of OGI rose 38.64% that same day. Understanding Supply and Demand is key. This Case Study can also be boiled down to two terms coined by CannaInvestor Magazine and now used by others:

1. View the Industry as a Vibrant Eco-System in its early stages

2. Understand and Accept Ecoforming and connecting the dots.

And there is a third element that we have brought to the table since our very first issue in the USA:

3. Understand that there is a small number of individuals who will go to extremes to move Retail Investors out of their current position to a position being promoted.