Marijuana News Today
The marijuana news today is once again of the positive variety, with several big gains in the pot stock market while Israel officially approves medical marijuana exports.
This means that Israel is now officially in the ring when it comes to the international marijuana game. (Source: “Israel Finally Approves Cannabis Exports, Stockholders Rush to Cash In,” Haaretz, January 27, 2019.)
The country has had legal medical marijuana sales for some time now (since the 1990s), so this move isn’t exactly out of left field.
The issue had been widely debated in Israel for a good while, but in the end, the results are exactly what we want to see as marijuana bulls.
This marks perhaps the first major legislative breakthrough for cannabis in 2019, unless you count the U.S. 2018 Farm Bill, which is really only coming into effect this year.
All the same, this is a huge victory for marijuana stocks, with a corresponding surge among Israeli marijuana companies that we’ll be keeping a close eye on.
As it stands, Israel is one of the few markets with publicly traded marijuana companies that have international reach. While Canada is still the king when it comes to pot stocks, this move by Israel is a huge leap forward in terms of broadening the options available to pot investors looking to go long on global weed expansion.
The caveat is that Israel has yet to legalize recreational marijuana, which may actually be a good thing for marijuana investors.
You see, Canadian pot stocks were juiced up heavily in the years running up to marijuana legalization. They saw hundreds of points in gains during that time and we witnessed the birth of an industry right before our eyes.
For those savvy enough to have bought in early, the returns were astronomical.
Now Israel has marijuana stocks you can invest in today that could also benefit greatly from a recreational pot stock push.
Buying Israeli marijuana stocks would help expose investors not only to a whole new segment of the market, but also help them get out ahead of any bull rush that would take place if recreational marijuana legislation is passed by the Israeli government.
Now, the catch is that these companies may not all transition into recreational pot (some are more pharmaceutical-facing than others). However, the entire industry will still likely benefit from legalization in Israel.
That is to say, for investors looking for a buy-and-hold strategy, Israeli marijuana stocks might be an intriguing play.
Turning our attention back to marijuana news closer to home, Cronos Group Inc (NASDAQ:CRON) started the week strong, jumping by over five percent in early-morning trading today.
Cronos stock has been off to a rip-roaring start to 2019, with gains of more than 66% over the past 30 days or so. The stock is also up about 11% over the past five days.
There hasn’t been much in the way of news to motivate this surge, but CRON stock seems to be primarily benefiting from an overall bullish sentiment in pot stocks.
It’s worth noting that CIBC World Markets recently endorsed Cronos and Canopy Growth Corp (NYSE:CGC) as two of the companies best suited to take advantage of the burgeoning legal marijuana industry. (Source: “Canopy Growth set to become the ‘global titan’ of cannabis: CIBC report,” The Ottawa Citizen, January 21, 2019.)
In any case, CRON stock is turning into one of the better marijuana stocks in the industry.
I’ve had my doubts about the company in the past due to its erratic performance, often going against industry trends in the stock market and seeing relatively muted gains compared to its top competitors.
While those concerns haven’t been totally erased, the company seems to be coming into its own, with very strong and sustained gains over the past several weeks. It helps that it’s one of only two pure-play pot stocks on the Nasdaq.
Cronos Group’s fundamentals aren’t as strong as Canopy Growth’s, but the company has its major Big Tobacco deal signed with Altria Group Inc (NYSE:MO), as well as a number of lucrative supply agreements.
This makes me feel rather positive about the future outlook of CRON stock.
Another huge winner in the marijuana news today is OrganiGram Holdings Inc (OTCMKTS:OGRMF, CVE:OGI).
OrganiGram stock soared by 11% to start the day.
This huge jump was the result of a very positive quarterly report.
The OrganiGram Q1 2019 financial report had a ton of goodies in it, leading investors to pour into one of my favorite marijuana penny stocks. (Source: “Organigram Reports Record Net Revenue of $12.4 Million Up 287% Sequentially Quarter-over-Quarter; Adjusted Gross Margin of 71%,” OrganiGram Holdings Inc, January 28, 2019.)
OrganiGram saw net sales skyrocket 419% compared to the year before, hitting CA$12.4 million, up from CA$2.4 million. The company also saw major gains over the previous quarter, jumping 287% in net sales.
Gross margin was another huge jump for the company, hitting CA$51.7 million this quarter, compared to CA$1.3 million the year prior. Net income similarly climbed to CA$29.5 million (CA$0.195 per share on a diluted basis), a huge shift from a net loss of CA$1.2 million the year before.
The icing on the cake was a positive free cash flow for the first time, with CA$2.9 million in the quarter versus a loss of CA$700,000 a year before.
“While we continue to work hard to take advantage of our enviable inventory build to drive increased sales we are already well underway preparing for the derivative and edibles launch during the fall of 2019,” said CEO Greg Engel. (Source: Ibid.)
That focus on the edible market is particularly scrumptious, since edibles will be one of the more exciting subsectors of the pot industry.
I’ve been a fan of OGRMF stock for a long time. Alongside Hexo Corp (NYSE:HEXO), it is one of the few marijuana stocks largely considered to be undervalued.
Furthermore, OrganiGram stock has seen huge gains over the past several weeks—in keeping with many other pot stocks—jumping by about 63% over the past month.
OrganiGram is also an enticing acquisition target for companies looking to expand their marijuana footprint.
This makes me very bullish about the long-term potential of OGRMF stock.
CRON and OGRMF Stock Performances
The performances of CRON stock (black line) and OGRMF stock (blue line) over the past week are seen on the chart below.
Chart courtesy of StockCharts.com
You couldn’t really ask for a better start to the week.
The marijuana news today has two longtime favorite pot stocks of mine winning big, while international marijuana stocks got a shot in the arm by way of Israel today, with its official seal of approval on medical cannabis exports.