Sound Bites: Pot stock consolidation and the cryptocurrency trust factor

In my latest interview with Jim Goddard on Howestreet.com, we discuss how Canadian marijuana firms are scrambling to increase capacity through expansion, mergers, and takeovers in preparation for legalization later this hear. Investors seem to be betting that these companies will be ready to deliver big profits soon. Meanwhile, insiders were selling the recent rally. So, was the sell-off last week a short-term buying opportunity?

Horizons Medical Marijuana Life Science ETF (HMMJ)

What's next for pot stocks? Another leg up or consolidation? (Click for higher resolution)

In our view, the amount of insider selling suggests that pot stocks may have had their run for a while, and a consolidation phase may be next. On that front, it would seem reasonable for investors to consider stocks that have a focus on specific markets that could be potential takeover candidates for either larger existing players who want to expand distribution capabilities or industry newcomers who need an entry point. We highlight two potential takeover candidates with sunny INK Edge outlooks in this week's market report available here for Canadian Insider Club members.

Cryptocurrencies are another hot area with speculators that recently experienced a pullback. As I discussed with Jim, this is a positive development as it will take some froth out the market and encourage greater consideration of fundamentals. I pointed to our survey of the Canadian Insider community which found that building trust and providing more insight to investors will be key for companies who want to succeed in the blockchain and cryptocurrency space.

Marijuana stocks, cryptocurrencies, and Vancouver housing: plenty of froth.

We cover a lot of ground in the interview, including Canada's good New Year's start heading back to the NAFTA negotiating table in 2018 and why tax reform as proposed by UBC professor Tom Davidoff is critical to removing speculative froth out of the Vancouver housing market.

Listen to or download the interview below. You can also catch it on Howestreet.com's YouTube channel.