Marijuana Mystery: Why the Cannabis Market is Up in 2015 when the Dow is Down
Ramona, CA -- (SBWIRE) -- 01/08/2015 -- At the start of 2015 Marijuana stocks are up 10% YTD, our company, Mentor Capital (OTCMarkets: MNTR), a cannabis M&A leader, is up 16% YTD, while the Dow is down 800 pts already in the new year. Why? And will it continue for 2015? Observing from the trenches, there seems to be a positive quadruple storm in Cannabis involving (i) major TV documentaries, (ii) cash from deferred tax selling now, (iii) rebound buying 30 days after December tax loss selling in marijuana stocks, and (iv) 30% long-term growth in the market.
First, CNBC spent a month in the mile high country of Colorado and just released its positive sounding documentary on the Cannabis industry, January 5, 2015. This, the ubiquitous airings of the Pot Barons of Colorado and replays of Cannabis in America and Marijuana Country are all stoking the Pot Rush fever right at the start of the year.
This flame is further fueled by ready cash in the hands of those investors that are finally taking profits in 2015 that were built up over 2014. The year-long tax deferral until April 15, 2016 on profits realized now, typically enables investors to take a shot at the hot new issues at this time of year - like medical marijuana stocks. The 16,000 to 18,000 movement in the DOW over 2014 is especially conducive to driving this phenomena.
The flip side of this is that there was significant tax loss selling during December 2014, that seems to be undergoing repurchase after the passage of the 30 days required to comply with the wash sale rule. The artificially high March 2014 cannabis bubble created the up to 90% losses that couldn't be passed up by many investors to lay off as losses for 2014 tax coverage during the last month of 2014. Today, cannabis true believers, and there are many, can jump back in during January to continue their financial and social quest.
All of this is against the political backdrop of additional states approving recreational marijuana and a greater acceptance by the public of both medical and social use. It is four states down, forty-six to go. In Colorado, 60% of the market has rotated to legal sales. This metric can applied against the baseline of the estimated illegal marijuana market in the USA of $50 Billion. That projects to an eventual $30 Billion legal cannabis market starting from just $1.5 Billion in 2013 and growing to $2.1 Billion in 2014. If that transition is accomplished across a decade it implies a 30% compounded annualized growth rate in the overall legal marijuana market over ten years.
About Mentor Capital
By acquisition or stock purchase, Mentor Capital, Inc. seeks to invest in leading cannabis companies. Additional important information for investors and founders seeking expansion funding is presented at:
This press release is neither an offer to sell, nor a solicitation of offers to purchase, securities.
This press release contains forward-looking statements within the meaning of the federal securities laws, including statements concerning financial projections, financing activities, corporate combinations, product development activities and sales and licensing activities. Such forward-looking statements are not guarantees of future results or performance, are sometimes identified by words of condition such as "should," "could," "expects," "may," or "intends," and are subject to a number of risks and uncertainties, known and unknown, that could cause actual results to differ materially from those intended or anticipated. Such risks include, without limitation: nonperformance of investments, partner and portfolio difficulties, potential delays in marketing and sales activities, problems securing the necessary financing to continue operations, problems encountered in commercializing cannabis products, potential of competitive products, services, and technologies, difficulties experienced in product development, difficulties in recruiting knowledgeable personnel and potential problems in protecting intellectual property. Further information concerning these and other risks is included in the Company's 15c2-11 filing which, along with other very important information about the Company, can be found here:
The Company undertakes no obligation to update or revise such forward-looking statements to reflect events or circumstances occurring after the date of this press release.
Mentor Capital, Inc.
Chet Billingsley, CEO
Source: UPTICK Newswire