Yet another banner week was had for the Canadian cannabis sector. Several of the smaller players in the sector decided to get moving, setting many new 52 week highs much to the delight of investors. However, there are apparent signs of weakness in the sector that individuals need to be cognizant of.
For instance, while the small timers were moving, the majors of the sector largely did not. As an example Aurora Cannabis saw its second straight week of consolidation, on the third red candle in a row. If it fails to hold key levels in the next day or two, it might begin its descent to reality.
As many involved in the sector know, the majors of the industry largely set the tone for the rest of the sector. Should the likes of Canopy Growth, Aphria, and Aurora falter in the next week or two it will likely signal the end of the fall bull run. With this, will begin the process of sector rotation. Much like we saw in April with the beginnings of the summer sell off, it is expected that this money will then rotate in to the emerging sector of blockchain technology.
As this sector rotation begins, expect our mild focus on the Canadian cannabis sector to shift to that of the blockchain and crypto sector. This has slowly been apparent to avid readers over the last week or two. Expect this to continue as money continues the process of moving on over. With that, lets get on with our Friday recap.
Cuba Ventures Corp (TSXV: CUV)
To start our week off, we did a full analysis on Cuba Ventures Corp, a company focused on investments within the communist Caribbean country. Historically, Cuba Ventures has largely been involved in the travel aspect of the country, providing travelers with flights and bookings for travel to the secluded country. Recently, the company announced that it had signed a memorandum of understanding with a related party to acquire blockchain technology. This technology would be used to establish Revolupay, a mobile app, and CCU Coin, a cryptocurrency focused on servicing Cuba and eventually all of the Caribbean. The only issue? Internet access. Check out our report for the full details on this venture.
Big Wind Capital (CSE: BWC)
Our analysis of Big Wind Capital consists of assessing the risk investors have taken with it. Although it is already a common name in the blockchain sector, there’s an issue – it doesn’t actually have any blockchain assets. Rather, it’s had a letter of intent to acquire portions of an asset in somewhat unclear terms since mid summer. Although Big Wind may have future potential, there’s high risk in that investors may be left with nothing.
Garibaldi Resources Corp (TSXV: GGI)
For our piece on Garibaldi Resources Corp, we did something we haven’t done before. We focused an article entirely on a single inside investor. However, Eric Sprott is not a typical insider – he is very active in purchasing company stock. We also took this opportunity to educate readers on some ways in which the markets work, and the different data that is available if you’re willing to pay for it. This data was then used to further our point by estimating that Sprott had indeed purchased more shares in Garibaldi. Check out the article to see how our analysis fared!
Delivra Corp (TSXV: DVA)
Last weeks company of focus was that of Delivra Corp, where we analyzed the company from top to bottom. To date, it has been our most popular article. At the end of the analysis, which can be found here, we stated that we had contacted the investor relations team with a few questions. Well, they finally got back to us. To keep readers in the loop, we formatted our exchange into a Q&A. Check out the article to see what information we dug up on this little known company.
The Blockchain & Cryptocurrency Sector
Our final article of the week was unlike anything we had previously published. Rather than focus on one specific company like we typically do, we changed it up a bit. Instead, we provided our views on where the smart money is headed. Earlier, we addressed the concept of sector rotation. This is a deeper look at that theory, where we provide examples of this occurring. To close, we also give details on several different raises that are currently underway in this emerging sector.
That’s all we’ve got for this week folks. In the week ahead, watch for signs of this sector rotation. It will happen, there’s no doubt about it. It’s just the question of when that is up in the air. As the hype surrounding the cannabis sector fades, the momentum of the markets will shift to the next emerging trend. This time, that will undoubtedly be the blockchain sector.
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As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.