MSOS - MSOS: U.S. Cannabis Sector Oversold And Ready To Light Up

2023-04-02 00:44:59 ET

Summary

• US Cannabis Stocks and the US Cannabis ETF have been sold off significantly more than the S&P as well as the consumer discretionary sector.
• However, cannabis sales still grew throughout 2022 for all 3 of the largest US cannabis retailers. Since cannabis is a growth sector, this is a strong counterpoint to the depreciation.
• This has resulted in each of the stocks - and thus the ETF - trading at a cheap sales multiple and a significant discount to the overall pharma sector.
• Including another sensible data point, cannabis has also been sold off more than the consumer discretionary sector at large - I don't think this is exactly sensible given the nature of this good.
• I think growth will continue throughout the new economic/consumer context and that the cannabis sector is priced cheaply at the moment.

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