Big Tobacco remains attractive because scale lowers unit costs and nicotine substitution can shift consumption beyond cigarettes. Cigarettes are homogeneous, so volume lowers costs; Sweden's shift to snus and nicotine pouches shows where consumption can move. The screen ranks tobacco among the strongest subsectors on fundamentals and market pricing. x.com  x.com  x.com  x.com 

British American Tobacco is a cigarette turnaround story nobody is talking about, with the stock up 100% in 18 months while paying a 6-10% dividend. x.com 

Altria, British American Tobacco and Philip Morris are priced as if headed to a terminal zero, so if that end date disappears, their valuations gain embedded convexity. Buybacks add EPS convexity by shrinking the share count, making a share of tobacco a different investment than owning the whole company. Fast-growing nicotine pouches, highlighted in a Reuters report shared by @tobaccoinsider, are the focus for a future beyond cigarettes. x.com 

Cannabis stocks offer an excellent entry point after a procedural pause in the DEA rescheduling hearing triggered near-panic selling. The industry has never been closer to rescheduling and resolving custody and uplisting issues, and it recently refinanced its debt on excellent rate and duration terms. The pause until October 13 may delay rescheduling somewhat but is unlikely to derail it, and institutional investors should begin entering over the rest of the year. x.com 

Philip Morris's growth valuation is vulnerable because Velo is ramping while moving from 15 to 20 ZYN pouches per can effectively cuts the price per pouch by 25%. At 29-30x earnings, the timing suggests ZYN is getting beaten; if volumes fall and the multiple drops to 17x, PM could really tank. Combustibles are in terminal decline, and PM trades like Altria despite half its yield and twice its multiple. The bigger pack may be right long term, and ETF flows and baskets could foil a short. x.com  … Show more

Philip Morris is collecting the inheritance as nicotine moves from cigarettes to smoke-free products, after choosing a decade ago to replace its own core business. Smoke-free is now 40% of revenue, ZYN and IQOS grow 20%+ a year, and each smoke-free pack brings 2.5 times a cigarette's revenue. Sweden shows the path: under 5% of Swedes smoke daily after switching to snus and pouches. The $16B Swedish Match deal in 2022, called overpriced, made ZYN America's fastest-growing oral tobacco product. … Show more

Developments around Altria's on! nicotine pouch brand look unfavorable, with new flavors coming in Q4 for on! Plus. x.com 

Cronos Group is one of the easiest longs in the market as higher-margin Israel and Germany sales lift gross profit without excise taxes. Q2 revenue rose 58% to $53M and adjusted EBITDA to $13.1M from $1.7M; gross profit nearly doubled. Spinach is Canada's #2 cannabis brand and #1 in edibles and vapes. CanAdelaar adds a leading Dutch adult-use pilot position at ~1.4x annualized revenue. Q2's $827M in cash, investments and deposits against $62M in liabilities and buybacks support per-share upside. … Show more

High Tide's lead in Canadian cannabis retail is widening toward a position competitors can hardly catch, yet it trades at about 5x EV/EBITDA. 23% of Canadian consumers now say Canna Cabana is the retailer they shop most often, more than double the next competitor's 11%. Its loyalty and discount model concentrates frequent users, so rivals must overcome both physical scale and an entrenched customer base, and High Tide is using its Canadian strength to grow internationally. x.com 

Cannabis is the least efficient pocket of the market, an opportunity for patient retail investors because long-term institutions and money managers do not yet care about the sector. That is why the stocks did not jump on rescheduling. @aaronvalue adds that so few eyeballs are on the space that investors face almost zero competition. x.com