Marijuana News Today
In the marijuana news today we have another extremely impressive performance out of Aphria Inc (NYSE:APHA), while on the politics side of things we’re seeing some pushback against presidential candidate Joe Biden and his antiquated marijuana views.
First, as always, let’s tackle the political.
Since he announced his entry, former vice president Biden has been largely considered the frontrunner in the Democratic Party race for the presidential nomination.
Barack Obama’s heir apparent, Biden is respected across the aisle as a centrist who would bring a sensible, middle-way attitude back to politics. He’s also praised for his electability and aptitude for connecting with the white working class—something that many consider to be a strength of President Donald Trump.
But what we’re looking at, through the prism of marijuana reform, is how much Biden’s retrograde ideas on pot will affect his nomination process.
Biden has gone on record in the past railing against marijuana, using the tired old attack line of comparing it to much more deleterious drugs like cocaine and heroine. (Source: “Joe Biden’s marijuana views are stuck in 1989 — literally,” The Growth Op, May 27, 2019.)
While Biden has changed his position somewhat, he has largely stuck to his guns, not really coming out in any meaningful way to support pot reform.
What we’re looking for, then, is to see how much his position on marijuana support will shift and change as the campaign wears on.
While he might keep to this “moderate” view and not make pot reform a priority, if this position begins to damage his standing in the polls, then expect to see a quick turnaround from Biden.
The thing is that if marijuana reform is as popular and powerful a movement as we hope (and the evidence is beginning to back up that belief), then Biden will have to change his stance on marijuana reform.
If he does and goes on to win the nomination, then we’d have someone potentially heading to the White House with a clear promise for marijuana reform on the record.
If, on the other hand, Biden sticks to his guns and is still able to win the nomination, then that will be a telling sign that we’re not quite as far along as we want to be in the push for marijuana legalization in the U.S.
In fact, the worst-case scenario for marijuana enthusiasts, both financial and personal, would be a centrist Biden against a right-wing Trump, both of whom are in opposition to marijuana legalization, all but ensuring another four years of prohibition.
While I don’t think this is likely, it’s a possibility that investors ought to be wary of.
The other major story in the marijuana news today concerns Aphria Inc as it continues to see huge growth following an analyst endorsement last week.
Jefferies Financial Group Inc (NYSE:JEF) analyst Owen Bennett assigned APHA stock a 115% higher target compared to its current price. “On our strategic scorecard Aphria scores highly, and third overall behind only Canopy and Aurora,” he explained. “Despite its strong global outlook, its valuation is the cheapest across our space, with allegations around inflated assets/insider deals weighing.” (Source: “Jefferies starts coverage of Aphria (APHA) with a Buy rating,” Stock News, May 24, 2019.)
This motivated a huge jump in APHA stock to close out last week, and that increase is continuing apace to start this week.
APHA stock is up nearly 15% and over the past five days has been one of the few positive performers with gains of nearly eight percent.
As for his prediction, I lay out my thoughts on it here.
For those who are clicking-adverse (or who are interested in the brief summary) the long story short is that Aphria stock is still one of the more volatile picks in the industry.
Gaining support from Jefferies is great, and is really the first substantial victory for the company in a long time, but I’m not sold on it quite yet.
I believe that Bennett’s projection is accurate and the company certainly could double in the coming months. My issue is more in the uncertainty; Aphria has burned us before.
There are better long-term buys compared to Aphria Inc—ones that are likely to keep the gains they make—but for those looking to make gains quick, few are looking better than APHA stock.
Another company that has burned investors, Tilray Inc (NASDAQ:TLRY), continues to do so. And unlike Aphria, it cannot seem to stem the bleeding.
TLRY stock fell two percent in early morning trading and is down four percent over the past five days.
Tilray, which we’ve written about a number of times now, continues to struggle, and there doesn’t appear to be much on the horizon that could spell relief for the beleaguered company.
I still am firm in my belief that Tilray stock is heading south of $40.00, which would represent about another 10% drop in the coming weeks.
While the company has the potential to turn it around, I’d hold off on Tilray stock until it begins to show major progress.
From the good to the bad, OrganiGram Holdings Inc (NASDAQ:OGI) is starting the week strong, even if it has disappointed a little over the past week.
OGI stock was strong to start the day with gains of nearly four percent, while over the past five days, the company has seen declines of six percent.
OGI stock was and continues to be one of my favorite pot stocks due to its massive potential for growth in the near and long terms.
The problem with OrganiGram is the timing. The company jumped to the Nasdaq during a relative down period in the marijuana stock market—one of the few rough patches in 2019 so far. While not a debilitating loss, it would have been nice if the company could have parlayed its Nasdaq momentum into more gains.
Having said that, unlike the marijuana stocks above, I’m very confident in the company’s future and I believe that OGI stock is in for strong growth in 2019. The company is simply too loaded to be slowed by the market’s hiccup.
Lookout for acquisition rumors and big partnerships as the next big steps for OrganiGram Holdings Inc.
APHA, TLRY, and OGI Stock Performances
The performances of APHA stock (black line), OGI stock (blue line) and TLRY stock (red line) over the past week are seen on the chart below.
Chart courtesy of StockCharts.com
The marijuana news today is that of potential.
If Joe Biden is forced to change his views on marijuana reform, that will be the most concrete example of pot reform becoming a mainstream issue receiving broad support from at least half of the country.
Similarly, Aphria Inc is looking to turn its current momentum into long-term gains, even if question marks still do surround the company.