Marijuana News Today: Another State Furthers U.S. Marijuana Legalization

Marijuana News Today: Another State Furthers U.S. Marijuana Legalization
iStock.com/Yevhenii Orlov

Marijuana News Today

The marijuana news today has us looking at Hawaii, which has decriminalized small possession of marijuana (and furthered the goal of total U.S. marijuana legalization) and Jay-Z, the billionaire rapper who is getting in on the weed business.

Although you’d probably have expected Hawaii to have been far closer to marijuana legalization than it is (surfer culture and all), but the state is still making its way toward pot reform. By 2020, however, the state will no longer jail those who are in possession of small amounts of weed, instead handing out fines. (Source: “Hawaii decriminalizes possession of small amounts of marijuana,” CNN, July 9, 2019.)

This is the first step on the way towards legalization. We’ve seen this process play out many times before; decriminalization almost always precedes further marijuana reform.

As I have said before, every state that pushes decriminalization and legalization brings us closer to the ultimate tipping point in which the federal government will agree to take a hands-off approach to pot.

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After all, if the majority of the country permits an action—and that is quickly becoming the case—it’s nearly impossible for the federal government to sit on its hands and do nothing while federal law is technically in contradiction to those state reforms.

And as I have also said before, marijuana legalization in the U.S. would be an event unlike any that the cannabis industry has ever seen. We’d see stock prices soar, followed by massive increases in sales, as well as a whole bevy of pot initial public offerings. It would be a fantastic boost to the marijuana stock market, so the sooner, the better.

In other news, rapper and billionaire Jay-Z has joined a private marijuana business in California as chief brand strategist. (Source: “Jay-Z joins cannabis company as chief brand strategist,” The Guardian, July 10, 2019.)

Nabbing Jay-Z is a big win for any company. His fan base is already known for buying other branded material from the artist, so they may now flock toward his marijuana products.

And of course, should he so choose, he could use some of his private wealth and his connections to other enormously wealthy people to help fund said venture, putting the company, Caliva, in a very good place.

As for pot stocks in general, this is a good sign. The more people with influence and money who get involved with the marijuana sector, the easier it will be for the industry to transition from illicit business to worldwide, multi-billion-dollar legitimate business.

That time is growing ever nearer, and marijuana stocks are only going to go up as the world continues to open itself up to the drug.

CTST Stock

The marijuana news today is largely positive, but the pot stock market is on a downswing yet again.

We’ve seen several weeks of this now, so it is safe to say we are firmly in the grips of a marijuana correction. That’s no reason to fear, however; I long predicted that this was on the way. It may not be ideal, but it’s all part of the game.

Many marijuana stocks that are down now can be considered a bargain, because they will soon surge back. Whether that’s in a few weeks or months is hard to tell, but events like edible legalization in Canada are sure to have a very positive effect on pot stocks, ensuring that this will not be a particularly long pullback.

One company, however, that may not be able to recover so quickly is CannTrust Holdings Inc (NYSE:CTST).

CannTrust stock continues to get hammered following a non-compliance finding by Health Canada, which led to massive amounts of the company’s inventory being frozen.

CTST stock dropped an additional 12% in early-morning trading today, making its five-day loss now 36%.

Recently I warned investors that the losses are likely to continue. Unfortunately, I’ve been right; this fall has no end in sight.

The problem is that Health Canada is going to need several days to investigate the matter, leading to potentially more problems down the line for CannTrust Holdings. In the interim, sales will be severely harmed, which will also hurt the next quarterly report. It’s a devastating confluence of events that will likely sink CannTrust stock for some time yet.

That doesn’t mean the company is doomed forever, but it does mean that its road to recovery is likely to be long. Marijuana investors looking for faster gains or more stability might want to look elsewhere.

IIPR Stock

If there is an antidote to the chaos that is CannTrust Holdings stock, it is Innovative Industrial Properties Inc (NYSE:IIPR).

A marijuana real estate investment trust (REIT), CTST stock is the picture of stability and gains.

While I predicted that a small pullback was in the stock’s future—and I still believe that—it hasn’t taken place yet. Instead, we’ve continued to see gains from one of my favorite marijuana stocks.

Innovative Industrial Properties stock jumped by a point in early-morning trading today and is up nearly 11% over the past five days.

As sour as I’ve been on CTST stock, I’ve been equally sweet on IIPR stock. It has everything an investor could want from a pot stock right now: stability, strong gains, momentum, and a connection to the burgeoning marijuana trade in the United States.

While there may be better long-term picks than Innovative Industrial Properties stock, I remain very bullish on the company, even if there is a chance for a slight pullback in the near future.

CTST and IIPR Stock Performances

The performances of CTST stock (black line) and IIPR stock (blue line) over the past week are seen on the chart below:

Chart courtesy of StockCharts.com

Analyst Take

Every day, the marijuana industry gets a little more mature, a little stronger. The marijuana news today is no different.

We’re now seeing mainstream celebrities enter the trade, while states continue to push legalization along one step at at time.

The pot stock market, meanwhile, is less than ideal right now, but there are still gems to be found. Overall, it’s not a bad time to be a marijuana investor, considering just how bright the future is looking.