How To Analyze A Marijuana Stock

Joe Weisenthal (0:11)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:15)

And I'm Tracy Alloway.

Joe Weisenthal (0:17)

Tracy, you want to hear something funny?

Tracy Alloway (0:19)

Always, Joe.

Joe Weisenthal (0:20)

So I think in our work chat the other day, I don't think you were online. I think you were off that day, but in our work chat the other day, I was talking to some of our colleagues, and I found out that they have a different description of me and you. They have a different way of thinking about our roles.

Tracy Alloway (0:38)

Oh, really?

Joe Weisenthal (0:40)

Have you heard this?

Tracy Alloway (0:40)

I'm very curious. No.

Joe Weisenthal (0:42)

Okay, so you know how like I am always sort of jumping on like whatever the hot market story is. Last year, I was talking about crypto a lot, and this year I wrote an article about cannabis or whatever it is.

And you consistently cover the very serious things, right? So you're into like credit markets and market structure, and you basically have an understanding of the things that will be enduring through markets for a long time, whereas I'm much more flighty and just sort of jump to whatever's hot. So anyway, apparently they say that I'm the momentum factor and you're the value factor is sort of how they see our different roles.

Tracy Alloway (1:25)

Sorry.

Joe Weisenthal (1:25)

Isn't that perfect?

Tracy Alloway (1:28)

That's great.

I guess we need to think about rebranding Odd Lots as momentum and value. Oh God, it sounds like a terrible like sitcom.

Joe Weisenthal (1:37)

But it is a good characterization. Anyway, so I wrote this story a few weeks ago for Business Week about exactly what I'm talking about, cannabis and crypto and various investing fads and bubbles and psychology and stuff like that.

And in doing the research for that story, I came across what at the time was a group of anonymous experts in marijuana investing called the Cannalists. And they have a podcast and a page on Reddit where they analyze really intensely, break down the various businesses of all these marijuana companies that people are investing in. And it's pretty clear that they're very far ahead of the pack, like a few different guys whose understanding of the granularity of the industry are far above where most of the media and most Wall Street analysts are on this nation area.

Tracy Alloway (2:35)

Right. So I remember reading a little bit about this in that piece that you did for Business Week. And I thought it was really fascinating because every once in a while, you see these communities essentially spring up on Reddit.

And sometimes these communities go into an insane amount of granular detail about what they're talking about. And the catalyst is definitely one of those.

Joe Weisenthal (2:58)

And even though I started by saying how you and I, we sort of have different complimentary approaches, one thing that I know both of us are very fond of is any stories of essentially someone on the internet becoming the ax in a certain space. So like we both used to read, like Calculated Risk, Bill McBride, we had him on the podcast. We both love these stories of someone online on their own independent of major institutions becoming the expert, becoming the must read on some new area.

Tracy Alloway (3:29)

Right, especially when it's new. And that's, I think, the thing that's the most interesting about cannabis stocks right now, because you're talking about an entirely new industry, potentially, with a whole new set of rules and a whole new way of functioning.

And a lot of the people, the traditional people, the sell side analysts on Wall Street, haven't really wrapped their heads around it just yet.

Joe Weisenthal (3:51)

Exactly right. So the interesting thing is right after my article came out, the canalists, they de-anonymized themselves. They doxxed themselves and revealed who they are.

And we're very lucky because one of them has agreed to come on today's Odd Lots podcast. So I would like to bring in Craig Wiggins. He is one of the three canalists. Craig, thank you very much for joining us.

Craig Wiggins (4:16)

Joe, Tracy, pleasure to be here. It's nice to be a guest on a podcast and not have to run the show.

Joe Weisenthal (4:23)

I know it's, I've been, whenever, the few times I've been a guest on a podcast, I always appreciate how much easier it is. I'm glad you're with us.

Tell us, why don't you just give us the background? Who are you? Who are the canalists? And why do people read your stuff?