Financial Services

Cramer warns against buying volatile Canadian pot stocks until things settle down after legalization


“‘Better’ will be a big argument” for why more pot customers will pay up for his legal products than go back to illegal street dealers, he said on “Squawk Box” as Canada on Wednesday became the largest country in the world with a legal national marijuana marketplace.

When the excitement from Canada’s legalization blows over, though, investors can start to do some careful stock picking, Cramer said.

“Once legalization goes into effect and [the] cannabis cohort cools when there’s no instant pot at the end of the rainbow, I think Canopy will be the cannabis stock that the big institutions reach for. If you don’t own it, I recommend waiting for it to go a tad lower, maybe you can get it below $50, which is a good price,” he said. “Right now, the entire group is overheated, as we saw today [Tuesday]. But as they come down, remember that Canopy and Constellation [are] the ones to buy.”

Canopy hit a new 52-week high Tuesday, adding to Monday’s 14.2 percent gain after announcing a takeover of U.S.-based hemp company Evergreen. But by Tuesday’s close, Canopy fell 6.8 percent to about $53.

Constellation Brands gained nearly 1.5 percent on Tuesday. In August, U.S.-based Constellation upped its bet on the cannabis industry, announcing an additional $4 billion stake in Canopy.


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