Marijuana News Today
One of the major developing stories of 2019 is the growing number of presidential hopefuls who support marijuana legalization in the U.S., with the marijuana news today seeing Kirsten Gillibrand coming out in support of federal marijuana legalization.
Gillibrand is considered one of the top contenders in a very crowded Democratic Party field that currently has over 20 people running for the party’s nomination. Gillibrand has one of the higher profiles in the race and is senator from a large state: New York. (Source: “2020 hopeful Gillibrand unveils plan to legalize marijuana,” ABC News, June 5, 2019.)
Gillibrand is largely considered to be among the top potential nominees, although her fortunes have fallen in the polls lately. Still, she is part of a growing movement within her party to push for marijuana legalization.
Between Gillibrand, Cory Booker, Elizabeth Warren, Bernie Sanders, Kamala Harris, and several other prominent supporters of marijuana reform, a good chunk of the top contenders for the Democrat nomination have come out in full support of marijuana reform.
Even Joe Biden, a notorious centrist on most issues, has voiced mild support for marijuana legalization, promising decriminalization. Biden, in most polls, remains the front runner, but that could easily change once the primaries begin.
Politics aside, it is looking increasingly likely that the Democratic Party standard bearer is going to be a pro-pot politician. Furthermore, considering that the next presidential seat is very much up for grabs, we could plausibly see a pro-marijuana president in the White House in 2020. Which means we could hope to see related legislation in Congress by 2021.
While this is the best-case scenario timeline, it is hardly an overly optimistic one. It is very possible that marijuana will be legalized in the U.S. by 2021, or at least that the legislative process will start by then.
And if that happens, marijuana stocks could shoot through the roof.
It may not be a matter of “if” so much as “when.” Every indication is that marijuana will be federally legal in the U.S. in the near future. When that happens, how the laws look will play a big part in just how high pot stocks rise, but one thing is undeniable: the second there is marijuana legislation working its way through Congress, pot stocks will surge.
This is, after all, the event that many investors, analysts, and pot companies have been waiting for: the ability to tap into the largest cannabis market in the world. And considering just how mainstream the issue of marijuana legalization has become, that huge surge could be right around the corner.
The marijuana news today, while positive on politics, continues to be a bitter pill to swallow when looking at the pot stock market.
This is the worst period in 2019 so far, with May having been a weak month and the stock market losses continuing to build up in June. While a correction was always going to be on the horizon, it appears that we are now finally in it, with several weeks of declines.
Whether this lasts for a month or several will determine just how high the gains will be in 2019. But something that I’m still quite certain about is that 2019 will be a very positive year for marijuana stocks when all is said and done.
One stock that has seen huge growth in 2019 despite the recent pullback is Cronos Group Inc (NASDAQ:CRON). CRON stock fell about three percent in early-morning trading today, but it’s up five percent over the past five days.
One of the mains reasons for the stock’s gains is that Bank of America Corp (NYSE:BOA) gave the company a two-notch upgrade following Cronos CEO Mike Gorenstein claiming on June 4 that his company would be “aggressive” regarding a U.S. cannabidiol (CBD) launch.
Speaking at a luncheon hosted by the Consumer Analyst Group of New York, Gorenstein added that he’s not talking “that long of a way out” regarding the company’s entry into the U.S. market. (Source: “Cronos Rises On Analyst Upgrade Following ‘Aggressive’ CBD Expansion,“ Bloomberg, June 5, 2019.)
These comments resulted in analyst Christopher Carey boosting his rating of Cronos stock from “underperform” to “buy.” Carey said that Cronos had a solid avenue for entry into the U.S. market through its partnership with Altria Group Inc (NYSE:MO), which he said was the “key to winning the U.S.”
The analyst explained that Cronos could leverage Altria’s U.S. presence (its products are in 230,000 stores) to launch its own products. “The potential to scale distribution nationally via Altria separates Cronos vs peers,” said Carey.
But as I wrote yesterday, these gains would not last more than a day, and I was proven correct today.
While the double-digit boost was nice to see yesterday, this type of good news typically only lasts for about a day before receding. We’ve been seeing CRON stock fall a little bit more than its competitors today as a result of its huge gains yesterday.
Still, Cronos is in a very powerful position and it has the ability to finish out 2019 strong.
One company that has weathered the recent storm particularly well is Canopy Growth Corp (NYSE:CGC). Canopy Growth stock fell only a point in early-morning trading today, and it is down nearly four percent over the past five days.
Canopy is the beneficiary of its own size and strength, making it one of the more stable marijuana companies around.
One piece of bad news for the company came today, however, as Newfoundland Auditor General Julia Mullaley is said to be investigating a number of cannabis deals that the province made, with the $40.0-million contract with Canopy Growth being one of the key deals of interest.
“The fact that there were some concerns around a particular contract — those are things we can look at once we actually undertake the work — but I think it’s the broader aspects of the public policy side that would be important for us,” said Mullaley. (Source: “AG to investigate N.L. marijuana industry — including Canopy Growth deal,” CBC, June 5, 2019.)
While we don’t know how the investigation will shake out—and the contract is one of the smaller ones for Canopy Growth—it could hurt CGC stock if the investigation uncovers anything duplicitous. While not a reason to panic, if the investigation turns up something negative for the company, expect Canopy Growth stock to take a hit.
CRON and CGC Stock Performances
The performances of CRON stock (black line) and CGC stock (blue line) over the past week are seen on the chart below:
Chart courtesy of StockCharts.com
The marijuana news today is very much a mixed bag.
On the political side of things, you have the most support we’ve ever seen for the cannabis industry as another presidential hopeful throws their weight behind marijuana reform.
The pot stock market, meanwhile, continues to struggle as we enter the toughest stretch so far in what has otherwise been a very strong 2019.