Buy or Sell: THC Biomed
QUESTION: I am a 62 year old new investor and also new to the marijuana sector. I have been following you for over a year and finally took positions last November in increments of $5,000 in Canopy Growth and in January in Emerald Health, Organigram, Cronos, Radient Technologies, Lexaria and, unfortunately THC Bio at peak prices. Of course, THC was not your selection but I bought it at $2.00 and now its $.44 per share. Now I can’t find much information on them and I don’t know what to do. I am thinking of taking a loss but I wish I had more information on which to make a decision.
L.S. from Louisiana, USA
ANSWER: I note that you watched the cannabis stocks for a while before taking the plunge in December 2017 and January 2018. This would have been after cannabis stock prices had already risen sharply. Now that prices have dropped, you and many others I suspect are thinking of selling. (see Let’s Toke Business Marijuana Composite Index above). If you read the Let’s Toke Business newsletter regularly or follow me in The Cannabis Report Model Portfolio, you will probably find I harp on this basic investment adage frequently: “buy low, sell high.”
Although it sounds so simple, it is actually very difficult to do. As an inexperienced investor, you are only comfortable buying after seeing the stocks go up for a while. On the other hand, when you see prices falling, you get worried and are more likely to sell. This is why so many people have a hard time investing successfully. Unconsciously, they are buying high and selling low. Just the opposite of what they should be doing. I should also point out there is evidence that professional investors have the same problem.
So to improve your investment results, invest with your head and not your heart.
With respect to THC Bio (CSE: THC) I called John Miller, President of the company last week but I didn’t hear back before the publication deadline. So I am passing along information without having spoken to management. If he returns my call and I reach a different conclusion, I will let you know.
THC is a Licensed Producer. That means in Canada, they are licensed by Health Canada to grow and sell cannabis. They are in operation and have sales contracts with the government of British Columbia and Ontario with a pending agreement with Saskatchewan. On October 2, 2018, they announced the first delivery to B.C. with a second delivery announced on October 16, 2018. On October 18, 2018, the company reported that three of THC’s strains and pre-rolls were on the bccannabisstores.com ‘Best Selling’ list.
Conclusion: I was very impressed by my brief look at THC Bio. It is a small company but appears to be well managed and is actually in operations. I think your upside potential may not extend to your $2.00 cost, at least in the foreseeable future. But in any case, I wouldn’t sell and following my advice I would be more inclined to buy to bring your average cost down to a point where you have a better chance for overall profit.
I also suggest investors look up The Cannabis Report Model Portfolio that I “manage.” It will provide you with a step by step, real time portfolio to model your personal portfolio against. You will find more information (here).
THC Biomed is listed on the Canadian Stock Exchange (CSE). As part of the reporting requirement, all CSE listed companies must file a monthly report, called a Form 7, updating operations. You can see the latest Form 7 for THC Bio (here).