Marijuana News Today
In what has been a recurring theme this summer, the marijuana news today shows another massive alcohol company getting in on the legal pot business. This time it’s Heineken N.V. (OTCMKTS:HEINY, EPA:HEIA).
The company, which is one of the largest alcohol producers in the world, has also been bitten by the green bug. It is now offering cannabis-infused beverages in California, where they are legal.
Heineken is selling beers with cannabidiol (CBD) and tetrahydrocannabinol (THC). CBD is the extract known for its therapeutic effects, while THC is known for its psychological stimulants. (Source: “Heineken is betting on a brew made with marijuana instead of alcohol, and it could help give a boost to the struggling beer industry,” Business Insider, August 8, 2018.)
This marks another major entry by a massive alcohol company into the marijuana market, following the footsteps of Constellation Brands, Inc. (NYSE:STZ), which partnered with Canopy Growth Corp (NYSE:CGC), and Molson Coors Brewing Co (NYSE:TAP), which teamed up with Hydropothecary Corp (OTCMKTS:HYYDF, TSE:HEXO).
It’s a partnership between two industries that makes a lot of sense, and I predicted that more of these deals would follow.
At the moment, Heineken hasn’t announced any substantial joint venture with a major marijuana company, but I doubt it will remain in the pot business on its own for long.
I foresee many alcohol companies looking to join up with the new kid on the block. In Canada, for instance, we’re already seeing this take place. Many booze retailers in that country are looking to team up with marijuana sellers in order to peddle weed come October 17, when recreational cannabis becomes legal across Canada.
What that means for marijuana stocks is that we’re likely to see another massive injection of capital into the industry as multi-billion-dollar companies look to reap the rewards of the marijuana rush.
Marijuana companies are going to see their stock values increase if they sign supply deals with alcohol companies to provide them with cannabis for the production of drinks.
And if pot companies make joint ventures with alcohol companies, they’ll benefit from having a more varied line of products.
For the alcohol companies, they’ll be able to join the weed rush rather than fight a losing battle.
We’ve already seen booze sales decline in U.S. states where marijuana has been legalized. So, instead of trying to fight a war of attrition against marijuana, alcohol companies can join in on the gains that the cannabis industry will generate.
Since the marijuana news today was all about alcohol-marijuana partnerships, let’s take a look at two of the first movers in that space.
Canopy Growth Stock
Canopy Growth stock is up almost six percent since the end of last week, making this one of the best runs for the company in over a month.
July was marked by steady declines and only slight rises, but this has been a very solid past couple weeks for CGC stock.
Early-morning trading today had the stock price up by just a hair, so nothing too spectacular going on yet.
Still, considering how marijuana stocks have fared lately, a six-percent gain over 10 days or so is fantastic news.
It’s also worth mentioning that Canopy Growth has now further cemented its stakes in the South American market. The company now has Spectrum Cannabis Chile SpA fully under its control. (Source: “Canopy Growth Announces Further Consolidation of Latin America Assets with Full Acquisition of Spectrum Cannabis Chile,” Cision, August 9, 2018.)
This follows other acquisitions that Canopy Growth made in South America earlier this year.
Hydropothecary stock has been flying high ever since its partnership with Molson Coors was announced. The company is up about 10% over the past two weeks, bolstered by the deal.
We’ve seen some of those gains begin to decline, however. HYYDF stock reached a peak of about 18% twice in that period. Nevertheless, I believe that these gains will likely be sustainable, if perhaps down a little from their current high.
In any case, Hydropothecary is among the few marijuana companies to have had a measure of success in July in the face of the market correction.
For now, I’m very bullish on the long-term projection of Hydropothecary stock, since the company has teamed up with a premier alcohol business and appears poised to become one of the big success stories.
While the volatile future of the pot industry will see numerous ups and downs, both CGC stock and HYYDF stock intrigue me for their long-term potential.
CGC and HYYDF Stock Performances
Check out the chart below of the recent performances of Canopy Growth stock (black line) and Hydropothecary stock (blue line).
Chart courtesy of StockCharts.com
As more and more alcohol companies enter the marijuana industry, we’re only going to see good things come to pot stocks.
More products means a wider customer base, which means increased sales, which means better stock performances.
Not to mention that the vast resources of older, larger, and more established alcohol businesses can be instrumental in helping these newer marijuana companies navigate the world of retail sales.
It’s a win-win situation and another good-news day for the marijuana industry.