Aurora Cannabis (ACB) $6.24 +0.06 Aphria Inc. (APH) $10.31 +0

David Pescod 780.932.5183

Debbie Lewis 780.499.3933

August 9, 2018

Aurora Cannabis Aphria Inc.

(ACB) (APH)

$6.24 +0.06 $10.31 +0.42

Aurora Cannabis

Maybe we have found the definitive article on the Canadian pot business after all, courtesy of the Globe and Mail in an article in ROB Magazine. We have been whining for awhile about the pot stocks. The volumes that they are doing, how they create news every time one of the companies announces yet another take-over/yet another financing, or whatever. We rehash what happened in Oregon as we believe the same thing is already happening in Canada. In Oregon, a state of only 4 million people, when they legalized the product, 400 individuals/corporations and the like got into the growing of pot. Needless to say, as they all came on stream, there was much more pot than people who needed to use it. Prices went down and when prices hit half of what they used to be, many went bankrupt and were simply out of the business. After all folks, this is just another agricultural product. It might involve more automation, some computerization, but it is still just another agricultural product. But back to the Globe and Mail article which was "Canada's great pot boom could be headed for a giant bust - for investors and consumers". They write, "Unless governments ease supply bottlenecks, loosen up marketing restrictions, and give legal growers and sellers a real chance to compete with unlicensed rivals, things might not turn out according to the hype." (That little comment they make about the unlicensed rivals is important - very important...because if you had a choice of buying merchandise off your regular dealer you've dealt with for the last five or 10 years for half the price of going to the legal shops, would you go across the street to pay the extra price?)

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David Pescod 780.932.5183 Aphria Inc.

Debbie Lewis 780.499.3933

August 9, 2018

The article continues, "Come this fall, pot aficionados like Kelly won't have to go to seedy parts of town or worry about cops busting in while they're replenishing their supplies, because they'll be able to buy cannabis legally, in licensed stores. If you believe Ottawa, the provinces and the CEOs of dozens of publicly traded pot companies, over the next few months, the black market in recreational weed will be magically transformed into a legitimate industry. Bruce Linton, CEO of Canopy Growth Corp., Canada's largest medical cannabis producer, is pumped. He thinks there will be lineups at stores." Linton says, "Some people say they'll go through their opening inventory in five weeks," he says. "I'm going with five days." "Investors are psyched too" the Globe and Mail article continues, "forging a roaring bull market in pot stocks on the premise that legitimate producers will wrest most of the $5.7-billion marijuana market from the vast network of unlicensed purveyors. Those public companies' combined market value is now close to $30 billion--almost three times the market cap of Canada's TSX-listed engineering firms--despite minimal revenues and practically no profits. But things might not turn out according to the hype. After years of study and consultation, politicians have constructed a highly regulated and typically Canadian Rube Goldberg market model. In each province, a cannabis authority will be the monopoly wholesaler, buying only from federally licensed growers. The wholesaler will then supply licensed storefronts and online sellers, or serve as the monopoly retailer..." The Globe continues, "Currently, about 90% of marijuana in Canada sells on the black market"...this is must reading for those who are following the pot market and despite the fact that so many pot stocks have broken down significantly (our one big complaint is that for those of us who want to short the stock, to borrow stocks to short might cost you up to 30% interest...if the stock is available to

While information and opinions expressed in this publication are believed to have been gathered from reliable sources, we accept no liability for actions that you might take in response to the material presented. Because the use of the information presented is relevant to the facts of your personal situation, you should seek the advice and services of a qualified professional who will take your personal situation into consideration in guiding

your actions.

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David Pescod 780.932.5183

Debbie Lewis 780.499.3933

August 9, 2018

short at all). The volumes show us that people are still very much interested. There is a new generation that think weed is some magical new product which has actually been around for hundreds of years and it will be interesting to see what the market cap and stock prices are on many of these Canadian pot companies, come year-end. To see the full article, click here:

Tesla Inc.

(TSLA)

$350.33 -20.01

As we were saying...about shorting stocks, Tesla would have been one of our other favourite short ideas...and again, you have a problem of being able to borrow the stock to sell. And thank goodness we didn't pursue it as in the last few days, Elon Musk - the visionary behind Tesla tweeted a thought about potentially taking over the company at $420.00 a share. Once again, few people have the visions of Elon Musk and you do wish him well...heck, who else would think of building his own spaceships to take ultimately people to the moon - that used to be something governments with access to huge chunks of capital did, wasn't it? But back to Tesla. There are a few questions right now that have to be asked. Firstly, how could be possibly afford an $82 billion take-over. That's a lot of money to put together. While there have been rumours that the Saudi Sovereign Fund may have taken an interest in the company of between 3% and 5% - there has got to be some big questions about whether they are thinking of putting any more in. As far as the questions on Tesla the company itself, the questions remain. First of all, should there be government grants to those folks that make electric cars such as in California and recently in Ontario, which just eliminated it. Basically, you are simply subsidizing expensive cars for rich people. Are you kidding? That's the first big question. Secondly...parts. Way back decades ago when times were really good, we had the audacity to pick up a sports car. You guessed it. Within two weeks we had an accident. The European sports car needed parts and it took six months for them to be delivered. You missed the whole summer, waiting for those parts and how much fun is that? There are already a large number of complaints from owners around the world as to the same problem. Do you want to be waiting six months or longer should something happen to your vehicle? With no real dealer network out there, I suspect parts is a real problem. Thirdly is the electricity market itself. Where is that electricity coming from? Is it that bird whacker? Or is it that old coal-fired plant? Fourthly, one thing about those old gas-fired cars is in Canada, on average a third of the price of your fuel goes to taxes. Originally those taxes were designed to help pay for the roads that the cars go on. Currently, electric cars contribute absolutely nothing and in fact, with some governments providing huge subsidies, you would think more people would be asking harder questions about these vehicles.

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David Pescod 780.932.5183 Tesla Inc.

Debbie Lewis 780.499.3933

August 9, 2018

Lastly, this market valuation makes no sense. To think of a take-over at $82 billion for a company that produces 1/30th of the cars of General Motors, but being capitalized supposedly at 40% higher, makes no sense. We shouldn't say a thirtieth because Tesla's vehicle production is always a huge question. Anyway, this is going to be an interesting drama developing over the next many weeks and months and suddenly one is quite glad one wasn't able to borrow paper.

Sokoman Iron

(SIC)

$0.39 -0.02

Sokoman Iron

Huge Volumes!

With the significant sell off we've seen in the price of so many commodities, does anyone care about the mineral exploration business these days? Heck, volumes have died on the senior stocks - what hope is there for juniors? Well, obviously people still do care. The three month chart on Sokoman Iron tells us that if you do come up with something significant, people will find out about it. Sokoman Iron has the Moosehead property in Newfoundland which just recently announced a pretty good hole - 11.9m of 44.96 g/t AU. You could discover that in my backyard anytime. It has this little stock excited and helping the cause is that on their $3 million financing, the bulk of it

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David Pescod 780.932.5183

Debbie Lewis 780.499.3933

August 9, 2018

was taken by Eric Sprott, a name synonymous with gold and the exploration business in Canada. Mind you, the private placement was done at a mere $0.15. But the volume traded on the stock over the last few days, tells you that people are still watching. Another tidbit though, is if you go to the Stockhouse boards on the company, there is so much chatter about the prospect, but almost just as much is people trying to push/slash/promote their own junior story, most of which are not having any fun these days as the Venture Exchange is providing little joy for the junior explorers. We touched base with Timothy Froude, lead hand at Sokoman Iron Corp. and yes he is a very happy fellow these days. He tells us it has been a mighty lean couple of years, so he is happy for some long-suffering shareholders. He is telling us that their financing should be closing very shortly, that assays from the rest of the holes should be due late next week and drilling should resume late September as paperwork to get the permits has to be finalized. The drilling program then, is needless to say, going to be many times the size of the past one. Froude tells us about how lean their operation has been over the last couple of years, no geologists on staff, working out of his own home in an area of Newfoundland close to where he was born...he tells us this and I don't think there are any other junior miner that can say this...for the last while, up until recently, there were so lean and mean they had a negative BURN RATE. When we try and corner Tim for his guess on what next for gold, he figures it is tied into the American elections and what they might do next. But he just has no idea. When pushed, he figures a year from today, maybe $1350...he hopes!

Disclosure: Unfortunately, we have been unable to short any pot stocks. Fortunately, we could not short Tesla...

Deb's Ditty: Saw a guy at Starbucks today. No phone, no tablet, no computer. He just sat there drinking coffee...

Like a psychopath

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