With the cannabis industry on the cusp of legalized recreational pot next month, seasoned investors are having a hard time understanding a pot company’s fundamental business amid a rapidly evolving sector, according to one Bay Street portfolio manager.

Patrick Horan, principal at Agilith Capital, told BNN Bloomberg Tuesday that it’s been difficult to invest in the cannabis sector because there’s a lack of fundamental information, which prevents investors from getting a full view of how the industry and its companies are operating.

“We look for fundamentals, we look for valuation, we look for technical and we look for momentum. When all four of those are in your favour, it can be a wonderful thing,” Horan said.

“The problem with the cannabis stocks is we can’t get there on valuation and we don’t know what fundamentals look like because the industry is developing so quickly,” he added. “It’s really hard to understand the players involved, where they sit. So really, you’re relying on momentum and technicals. Those two variables alone just aren’t enough for us to go on.”

Horan noted that when investors look back at the cannabis sector over the next 20 years, there’s likely to be one or two “really big winners”, however he added that the “path to get there could be tumultuous.”

Late Monday, Aurora reported fiscal 2018 results with revenue reaching $55.2 million from $18.1 million in 2017, while net income swung to a $71.9-million profit from a $13-million loss a year ago. Other marijuana companies that will release earnings over the next month include Aphria Inc. on October 15 and Canopy Growth Corp. on November 14.

Horan added that the cannabis industry appears to be mirroring the frenzy that semiconductor companies enjoyed in the mid-1990s as investors pushed firms involved in making microchips to billion-dollar valuations before crashing several years later. Since then, only Intel Corp. is a significant player, although he said it is arguably “a struggling value-based semiconductor stock and you have 100 companies that went bankrupt in the process,” Horan said.

“That’s not to say there’s no money still to be made [in cannabis] but it’s really tricky from here,” he said.

Cannabis Canada is BNN Bloomberg’s in-depth series exploring the stunning formation of the entirely new – and controversial – Canadian recreational marijuana industry. Read more from the special series here and subscribe to our Cannabis Canada newsletter to have the latest marijuana news delivered directly to your inbox every day.