Marijuana News Today: Democratic Presidential Nominees Come Close to Fully Endorsing U.S. Marijuana Legalization

Marijuana News Today
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Marijuana News Today

The marijuana news today should have marijuana investors celebrating: most of the major Democratic Party nominees for president have come out in support of a U.S. marijuana legalization bill that was reintroduced yesterday afternoon.

The Marijuana Justice Act would remove marijuana as a Schedule I narcotic and expunge federal convictions related to pot.

While the legislation stops short of full U.S. recreational marijuana legalization, it’s clear for all to see that this bill would be a huge step toward that goal. It was introduced before, in 2017, but did not receive a vote at that time.

At the head of the push is Senator Cory Booker, who is among the front-runners to become the Democratic presidential nominee to go up against Donald Trump in the 2020 election.

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In a press release announcing the legislation, Booker said:

The War on Drugs has not been a war on drugs, it’s been a war on people, and disproportionately people of color and low-income individuals…The Marijuana Justice Act seeks to reverse decades of this unfair, unjust, and failed policy by removing marijuana from the list of controlled substances and making it legal at the federal level.

(Source: “Cory Booker introduces bill to legalize marijuana nationwide,” The Hill, February 28, 2019.)

Removing marijuana’s Schedule I classification would open the door for medical marijuana to flourish in the United States.

As it stands now, being a Schedule I drug defines marijuana as having no medical purpose.

Lifting the Schedule I status from cannabidiol  (CBD) was part of the reason that “Epidiolex,” the first-ever cannabis-derived drug, was approved by the U.S. Food and Drug Administration (FDA). That decision was a refutation of the argument that marijuana has no health benefits.

Of course, the FDA was able to square that circle by putting heavy restrictions on tetrahydrocannabinol (THC) levels, thereby allowing a cannabis-derived medical drug while also keeping marijuana as a Schedule I drug.

In any case, Democratic presidential nominees have drawn a clear line in the sand: the Democratic Party is now officially for marijuana reform, full stop.

All the major Democratic names running for president have co-sponsored the bill, including Senator Bernie Sanders, Senator Elizabeth Warren, and Senator Kamala Harris.

What this means is that the Democratic Party is (finally) taking a page out of the Liberal Party of Canada’s playbook. Canadian Prime Minister Justin Trudeau used marijuana legalization as a key pillar in his campaign that eventually led to his party’s electoral victory.

Again, the Democrats are not promising marijuana legalization (yet), but it’s easy to see which way the wind is blowing. The logical next step would be to see legislation to legalize pot in America.

The next question is whether the current bill can gain widespread support. I doubt there are enough House and Senate Republicans willing to support the bill for it to pass—and even some Democrats may chafe at the idea of marijuana legalization.

But symbolically, this is a big first step toward legalization.

Not to mention that if any of these candidates win, expect them to carry their pro-marijuana agendas to the White House.

Furthermore, if the Democrats gain control of the Senate and House in the upcoming elections, we’ll likely see U.S. marijuana legalization sooner rather than later, which would create exponential growth in the pot stock market.

CGC Stock

While not quite as important as the political marijuana news today, Canopy Growth Corp (NYSE:CGC) continues to grab attention, even while the pot stock market has remained pancake-flat to start the day.

CGC stock saw little change in early-morning trading today, but it did manage a near-six-percent gain over the past five days.

While it didn’t serve to push Canopy Growth stock any higher, the company did make headlines when it added domestic guru Martha Stewart to the team. (Source: “Martha Stewart joins Canadian marijuana grower as adviser,” The Guardian, February 28, 2019.)

Stewart is serving as an advisor on a new line of cannabis products for both humans and animals. So long as Stewart stays away from the stock side of Canopy Growth, this partnership should work out nicely.

Jokes aside, this is a win for CGC stock. After all, branding is going to be hugely important as sales become an increasingly prominent factor in pot stock performances.

Stewart brings with her a whole brand unto herself that will likely lend credibility to these products in the eyes of her many fans.

It also helps normalize marijuana as a product. After all, if America’s domesticity expert comes along and approves of pot, how bad could it really be?

Canopy Growth stock will more directly benefit from the sales boost that Stewart-supported products could yield.

The first new line of products is said to be targeting pets and could open another untapped market.

As usual, I’m bullish on CGC stock, with the Martha Stewart addition being another strong move by the company.

TLRY Stock

A far more impactful development in the marijuana news today was Tilray Inc (NASDAQ:TLRY) inking a deal to acquire FHF Holdings Ltd. (also known as Manitoba Harvest).

Manitoba Harvest is the world’s largest hemp food manufacturer. It produces a number of cannabis-related goods. (Source: “Tilray Closes Transaction Acquiring Manitoba Harvest, the World’s Largest Hemp Foods Company,” Business Wire, February 28, 2019.)

TLRY stock, like many pot stocks today, saw little movement in early-morning trading, but it does find itself up two percent over the past five days.

While the deal was announced several weeks ago, its finalization is a big step for the company. It also signals the growing interest in hemp products, especially now that hemp offers the best avenue for companies to enter the U.S. marijuana market.

While the winds of change are blowing and we’re likely to see U.S. marijuana legalization sooner rather than later, “sooner” in this case still means a couple of years, minimum. It’s more likely three to five. But hemp is officially legal across all 50 U.S. states and D.C.

Canopy Growth has signaled its interest in the hemp market, and so have several other pot companies. Tilray’s acquisition of Manitoba Harvest puts Tilray stock right in that conversation.

I still have a few reservations about TLRY stock, but ultimately appears that it is set for higher gains in 2019—especially if the company enters the U.S. hemp market in force.

CGC and TLRY Stock Performances

The performances of CGC stock (black line) and TLRY stock (blue line) over the past week are seen on the chart below.

Chart courtesy of StockCharts.com

Analyst Take

The marijuana news today was a great success for the future of pot stocks. The Democratic Party has now, for all intents and purposes, put its entire weight behind marijuana reform.

If any of the party’s presidential hopefuls who supported the Marijuana Justice Act find themselves in the Oval Office by 2021, we’re likely to see a huge push for pot reform—maybe even legalization—in as little as two years.

If you look at the three-year run-up to marijuana legalization in Canada, pot stocks grew exponentially, with many gaining by as much as 1,000% in that period. The same could happen again if marijuana becomes legal in the U.S.

Meanwhile, the pot stock market remains quiet to end this week, even as CGC stock and TLRY stock both made significant moves.