Worldwide Cannabis market provides promising investment opportunities

Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area.

When you hear the word cannabis, you might think of a criminalised drug that allows you to get high. However, in recent decades legalised cannabis is being viewed as a new and exciting investment opportunity. Why? Primarily, because the cannabis market is worldwide and there is an array of uses for cannabis. Moreover, countries, like Canada, are legally selling cannabis with great success.

For those who do not know, cannabis has two strands. Indica and Sativa. The Indica side produces Marijuana with high (> 0.3%) Tetrahydrocannabinol (THC), which causes the narcotic effect. Whereas, the Sativa side produces both Marijuana with high THC but also Hemp. Hemp has less than 0.3% THC. Marijuana with high THC has recreational/medicinal purposes. Hemp has industrial purposes.

The cannabis market has different segments. These include cultivation, testing, medicinal, recreational, and Industrial, to name a few.

Cultivating cannabis involves growing the plant. Cannabis can be grown either outside or inside big warehouses. Cannabis warehouses use artificial lighting to grow the plant. Thus, lighting companies could be a potential investment. Second, to that, fertiliser and seeds are needed to grow cannabis. Seed manufacturers could also be an investment.

Cannabis also has medicinal purposes. These can include treating chronic pain to calming seizures to even reducing arthritis pain. Medical practices would use cannabis to treat illnesses through cannabidiol (CBD), edibles, and even lotion.

Recreational cannabis involves your local corner shop such as a café selling loose leaf cannabis or edibles.

Companies who sell medicinal/ recreational cannabis must label what chemicals are inside. Primarily because patients, doctors, and consumers want to understand what is inside their cannabis. Thus, making cannabis testing companies an unapparent but an attractive investment.

Furthermore, the Hemp side of cannabis opens an industrial market. Hemp can be used to create rope, fuel, food (milk, flour the seeds themselves) and even clothing. Therefore, with Hemp having an abundance of industrial use Hemp companies are one to watch.

The Hemp, medicinal, and recreational cannabis markets are all exposed to universal risks. Firstly, all cannabis markets depend on the political environment. Legislation is macro, meaning these cannabis companies cannot change the law to give them the green light. Cannabis companies need federal legislation passed to have a license to cultivate, sell, or medically administer. State laws alone will not be enough, as seen with the ACT, but will push the trend towards federal. Secondly, the effectiveness of cannabis must be shown to the community. Luckily, with countries like Canada, America, and Malaysia legalising and medically administering cannabis, Australia can use their results as evidence.

Investors must realise that irrespective of which segment you invest in, the cannabis market is NOT a lottery ticket to get rich quick. Instead, investors could take a long term or intermediate investment approach however individual research is advised.

The cannabis market is not just a significant trend but also a permanent shift in our lives. Meaning that in decades to come the cannabis market will still exist but be more integrated into society. Therefore, investors should look to invest in stable cannabis companies. Primarily, because in the long term, within the decade, cannabis investors may be able to cash in on eye-watering returns if the market remains open to legalising cannabis  – (Long term investing strategy).

The second strategy is what we call ‘riding the waves.’ In each segment, events will occur that create a surge in the stock price. These events (waves) act as a catalyst for stock growth. For example, if a government legalises the retail of recreational cannabis or a clinical trial for medicinal cannabis proves positive, then the stock price will skyrocket. Therefore, investors should look for penny stocks, buy, ride the wave, sell, then enjoy the smooth swim to capital gains. Extensive individual research is needed.

To conclude, this introduction into the cannabis market might have been a mouthful for some. However, we here at YIG will be creating a series for recreational cannabis, medicinal cannabis and, HEMP cannabis. Each series will include a breakdown of promising stocks within each segment and the critical macro (global and domestic) events. Ultimately, giving investors an edge in the global and surging cannabis market.

Here is our free, uncomplicated, and extensive ASX portfolio

https://youth-investment-group.com/portfolio/

If you enjoy our articles or are wanting to learn more, you can subscribe to us for free via email and get updates when we post new articles. From all of us at YIG, thank you for the support.

The information above should not be taken as financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.

Written by Patrick McLoughlin , associate of YIG.

Paradigm Bio-Pharmaceutical (ASX) with major stock movement- how long will it hold ?

Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area.

Since launching , YIG has published articles relating to commodities (Cobalt) and Tech companies. Now, YIG has a new and exciting list of companies that will be assessed, to give our members an advantage in the market. We are talking about the Pharmaceutical and Biotechnological stock industry . Today we discuss the potential future of Paradigm Bio-Pharmaceutical (PAR).

PAR focuses on repurposing old drugs, such as Pentosan polysulfate sodium (PPS) to improve medical treatment for osteoarthritis (OA). The complexity, financial investment, and timeline behind approving repurposed drugs are substantially shorter than new medicines. Primarily, because of the drugs historical safety, existing manufacturing processes, and market results.

Repurposing drugs involves the following process:

Stage 1: Researchers propose a repurposed drug

Stage 2: Preclinical research

  • Researchers obtain funding to validate that their repurposed drug will satisfy an unmet medical need

Stage 3: Clinical research

  • The drug is tested on humans to measure its safety

Stage 4: FDA Approval

  • FDA approval means the drug is safe and effective in treating the unmet medical need

PAR is currently at $2.52 per share (24/09/2019). Around the same time, last year PAR was trading at 0.88 cents a share (25/09/2019). Instead of just looking at the increase over the year, it is more important to understand why the be stock has spiked at certain points within the year .

Google 25/09/19 Paradigm Share Price

During May 2019 PAR launched a phased 2 clinical trial of their OA drug Zilosul. Of the 205 patients treated, PAR found that Zilosul reduced pain by over 50% for patients with knee OA. Paradigms promising results provided real-world evidence that Zilosul is a safe and effective drug that reduces OA pain. In turn, these clinical results increased investor confidence in PAR, causing the share price to increase.

Furthermore, in August, PAR’s clinical trial demonstrated how Zilosul could also slow cartilage degradation. What is cartilage degradation? Well, it is when the cushiony lubricant between bones (cartilage) wears away, causing inflammation as the bones directly contact. Cartilage degradation is an effect of osteoarthritis. Therefore, these results illustrated how Zilosul not only reduces pain for OA patients but also protects cartilage from progressive deterioration.

Just this month, Zilosul received clearance from the US Food and Drug Administration (FDA). FDA clearance is a critical hurdle to overcome in the process of repurposing a drug. Primarily, because FDA clearance validates both drug safety and that it successfully responds to the unmet medical need. The unmet medical need is the unavailability of registered treatments to reduce osteoarthritis .Therefore, FDA clearance on Zilosul increased investor confidence that Paradigm, will be able to bring the drug to the market. In turn, the FDA clearance increased both the demand for the PAR and the share price.

So, where to from now?

The increase in share price (2018-2019) was a mirrored response to the significant medical progress of Zilosul. However, now that the FDA approval is still in a 30-day review, we can expect some levelling off or slight decrease in the share price. PAR did report a $2.45 million operating cash loss for 2ndquarter of 2019. However, high costs and minimal cash is the nature of this industry as the development of the drug initially requires significant capital outlay.

If Paradigm can bring Zilosul to market, then investors could instantly see some eye watering returns. Primarily because the OA market represents 13% of the world’s population with an American market size of $5 billion US a year.

Furthermore, Paradigms main OA competitor Tanezumab, has experienced mixed results from their clinical trials. Tanezumab’s delay could allow Paradigm to gain the first market foothold.

Here is our free, uncomplicated, and extensive ASX portfolio

https://youth-investment-group.com/portfolio/

If you enjoy our articles or are wanting to learn more, you can subscribe to us for free via email and get updates when we post new articles. From all of us at YIG, thank you for the support.

The information above should not be taken as financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.

Written by Patrick McLoughlin, Asscoiate of YIG

Demand for electric cars drives potential in Cobalt stock

Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area.

Cobalt, alongside nickel and copper, is a critical component of lithium-ion batteries. These batteries are found in everything, from smartphones to electric vehicles. The upward shift in electric vehicles (EV), especially from Tesla, caused the demand for lithium-ion batteries and thus cobalt, to surge in the past couple of years. Prices for cobalt were rising steadily from 2016 to 2018 and peaked at $123.3 per kilo in 2018. However, now cobalt prices have decreased, currently sitting at AUD $46.82 per kilo (23rdAugust 2019). So why have cobalt prices fallen?

Firstly, the demand for electric vehicles sparked a cobalt mining frenzy in 2018. In turn, mining companies pre-emptively increased their supply of cobalt, thus causing prices to rise. However, the evolution toward electric vehicles has not taken off yet. Secondly, the political instability and use of child labour within the Democratic Republic of Congo, a country who supplies 60% of the world’s cobalt, has further contributed to the declining prices.

So, what can young investors do now? Due to the current global volatility of cobalt and the temporary delay in the electric vehicle evolution, it would not be wise to invest directly in cobalt through futures (futures will be explained in a later article). Instead it would be best if you looked to invest in the stocks of those companies within the cobalt – battery or mining sector.

The investing strategy to be used for all these companies is, buy low, and sell high. The following companies are, in my opinion, some of the most promising businesses to invest in within the cobalt – mining sector.

CBLT is a Canadian mineral exploration company. CBLT have acquired safe and healthy cobalt/gold mining properties throughout Canada, especially in Ontario. CBLT, under the guidance of CEO Peter M Clausi, has placed these mining properties under merger and acquisition (M&A) activity. Ultimately, increasing profits for their shareholders.

Global Energy Metals (TSXV; GEMC) are sourcing cobalt from top tier mining jurisdictions worldwide. These include the Millennium Cobalt Project in Australia (Queensland), the Werner Lake Cobalt mine in Ontario (Canada) as well as early exploration in Nevada (America). GEMC’s diversification of cobalt supply in stable countries has significant upside potential in preparation for EV demand. CEO Mitchel Smith’s confirmation of mining progress in Australia and Canada makes this company one to watch.

It would help, that readers check out cobalt mines/electric car companies in China. Primarily, due to China accounting for 65% of the world’s lithium-ion battery and the government wanting to produce a minimum of 2 million EV cars in 2020.

To conclude, do not be discouraged by the decrease in cobalt prices this year. Due to the current and forecasted appetite for technology, lithium-ion batteries, and electric cars, it does not seem like the demand for cobalt will slow down in the future. Ultimately, driving cobalt prices up in the long term (2020 and beyond) and providing significant upside potential in the cobalt – electric vehicle sector.

Here is our free, uncomplicated, and extensive ASX portfolio

https://youth-investment-group.com/portfolio/

If you enjoy our articles or are wanting to learn more, you can subscribe to us for free via email and get updates when we post new articles. From all of us at YIG, thank you for the support.

The information above should not be taken as financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.

Written by associate Patrick Mcloughlin of YIG.