You may have noticed that there’s a lot of talking about marijuana investing these days. Most of all because a recreational weed is going to be legalized in Canada on a federal level very soon and then it also gets much more attention in the USA. Several states already legalized recreational marijuana and more than two dozen have medical cannabis legalized for a while.
You also may have noticed that several companies engaged in pot business grew exponentially in recent 3 years. Some stocks have risen by 200%, some 800%, and some even 4000%. Investing in such companies early when they’re considered penny stocks now will guarantee you incredible profits in future. The marijuana industry is not Bitcoin industry, although the significant price performance for such short time is very similar. The difference is that pot stocks have an intrinsic value and thus, we are actually investing in a real thing!
Finding such stock is not an easy task. Considering the number of companies trying to enter the market, the search is like for a needle in a haystack. Therefore, you must take into account many crucial requirements, which enable a company to grow in future – maybe fly!
Lexaria Bioscience Corporation (LLX.CN)
Lexaria develops nutrient infusion technologies for the production of superfoods. The company has many patents in several countries around the world, most of all it has a patent for utilization of its DehydraTECH delivery technology in the USA and Australia.
The technology is designed to increase the bioavailability, improve the flavors, and rapidity of onset of cannabinoids across a wide array of products – including beverages. This a big thing, because the customers in a market of such scale will care about the convenience of the consumption.
So far still a small-cap of 140M with a price around 2.0. Once the company starts to deliver numbers, a significant surge is expected. You can already see where the money is flowing. Because hedge funds and other institutional investors already buy shares of the healthy pot stocks, so they don’t miss the big surge. There are three types of pot stocks in North America:
- Stocks that already broke out e.g. Canopy Growth – see my article before it actually happened
- Stocks that consolidate
- Stocks going downward
Now, we want to invest in the first type, because this has still a long way to go and grow. Then, we want to invest also in the second type when breakout happens, because of a likelihood to grow exponentially.
Lexaria is the second type of the stock at the moment. Although the company already broke some resistances, it is still waiting for its big run upward. Depicted below, orange dashed lines show the broken resistance levels. A most recent resistance that was broken in April resulted in 40% price increase so far. Currently, Lexaria is in short-term consolidation forming a Flag & Pennant Pattern. See the blue pennant – the price moves inside now, once it breaks above the flagpole – it is time to go long. This is the most important event to watch now – BREAKOUT!
Lexaria Bioscience Corp. offers a fabulous opportunity for investing. Important is to stay disciplined and focused on the big picture!
