An easy way to get in cheap on a cannabis stock is to wait for insider shares to be unlocked and can be sold on the open market, which usually is 180 days after the company goes public. When Tilray unlocked a few months ago, the shares dropped 15% in a few days. So you could either buy the dip, or short the stock beforehand.
Lockup Ending Bargains a Thing of the Past?
But things are changing. I had planned to get back into Trulieve, after taking profits at $12.70 recently, when their lockup ends in July. But the latest trend is for insiders to postpone their unlock dates, as Curaleaf did; they now unlock in October. That keeps their shares from dropping, which creates lack of confidence among investors.
Cresco Labs recently announced postponement of their upcoming unlock, and TILT hinted at doing so in yesterday’s conference call. Acreage Holdings insiders will not be able to sell their shares until trigger events related to their acquisition by Canopy Growth. So if you are looking for an entry point on a cannabis stock that has gone public in the past six months or so, research the status of their lockup.
That’s one of the fascinating things about the cannabis industry and stocks, how so much changes every couple of months.
For more of my blog posts, scroll down. See my FaceBook group, Cannabis Stocks, for more information about the cannabis industry and cannabis stocks.