The Reddit Railroad

forced selling / liquidation = process of price discovery.

On Tuesday we shared the US cannabis bear scare that was being whispered around the street; two-days later, we’re navigating the full-fledged fall-out of risk gone awry. We know all about the $GME/WSB/HF saga playing out and at it’s face, it would appear to be a world away from U.S cannabis.

But this is Wall Street. Everything’s connected.

Late yesterday on Twitter I shared, “Hearing someone long US cannabis / short CAD cannabis was forced to unwind today, which helped shape the price action on both sides of the border.” When a narrative fits what my eyes are seeing, I pay attention; sure enough, this morning, picked up more 4-1-1 that supports that assertion.

The price action smacks of indiscriminate selling; and I know after 30 yrs on the street, when someone is forced to unwind their short bets, they typically (if not always) unwind both sides. Given how thin US cannabis stocks are, 1-800-GET-ME-OUT will make some noise, as it has.

FOR THE RECORD, when I said on Tuesday, “GTI, which is +688% in ten months, trades where in a nuclear winter: $20? Maybe? That’s 33% and not to be glib, I’m not that concerned” I did not expect it to drop 25% in the next session or so but we cannot control the wind, we can only adjust our sails.

We knew US cannabis was super-extended coming into this week; and that’s not the case anymore. And while one never knows the timing on invisible catalysts, or when they abate, there are good names on sale, we should have a better set-up into earnings, and at the risk of sounding glib, we knew it would be bumpy.

All else being equal—and that’s a lot to ask, these days—I’ll leave you with this: if you believe that acheiving success requires the ability to turn obstacles into opportunities, then this sell-off has your name written all over it. That doesn’t mean it’ll end today but I’ll go out on a limb here and say, I don’t think we’ve seen the top in US cannabis.

/position $GTBIF