Marijuana News Today: U.S. Marijuana Legalization Continues to Gain Steam in Washington

Marijuana News Today
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Marijuana News Today

The marijuana news today has us looking toward Washington, D.C. as the presence of cannabis lobbyists grows, signaling that the push for pot legalization in America is continuing to gain steam.

Lobbying is not the most celebrated of jobs (in fact, it is often railed against in the columns of newspapers across the country), but it is a powerful one. Companies spend millions of dollars on these operatives so they can rub elbows with the power brokers in Congress, intent on getting the legislation best suited for their clients through the legislative body.

Marijuana is the latest industry to start investing heavily in lobbying. Cannabis companies spent $2.7 million on lobbying last year, a sixfold increase over just two years ago, according to the Center for Responsive Politics. (Source: “Beer and cigarette makers join the pot lobbying parade,” Politico, April 23, 2019.)

While some believe that the lobbying will prove effective, the very existence of lobbyists getting this kind of cash to help push through law changes shows that, as I’m wont to say, the marijuana industry is maturing.

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It’s another sign that the normal machinations available to other industries are also becoming available to the pot sector.

Whether they will be successful remains to be determined, but the very existence of a pot industry lobbying group is more proof that cannabis is becoming just like any other industry. It’s losing its notoriety as an illicit drug, allowing skittish investors to feel more comfortable getting into pot stocks.

Now, moving beyond the symbolic, there’s a reason that companies pay lobbyists big money: lobbying works. Lobbyists wield powerful influence when it comes to the crafting and passing of laws.

While the legal status of marijuana will ultimately come down to the lawmakers themselves, lobbying can be critical in turning a few fence-sitters and potentially helping push through legalization in the U.S. faster than it would take otherwise.

While there’s no guarantee, that is a very real possibility.

The overall picture, then, is one of marijuana legalization’s impending inevitability.

With never-before-seen political support for pot reform and indicators like the development of a cannabis lobby in the U.S., we’re seeing marijuana come as close as it ever has to federal legalization.

While I judge pot legalization in the U.S. to be several years away, we’re getting very close to seeing it become a real possibility. When federal legalization eventually comes, marijuana stocks will see huge gains.

CGC Stock

Speaking of pot legalization, in the marijuana news today it would be impossible to gloss over the biggest player in the industry: Canopy Growth Corp (NYSE:CGC). CGC stock was only up about one percent in early-morning trading today but it has gained 15% over the past five days.

Much of that rise can be attributed to Canopy Growth’s deal to acquire Acreage Holdings Inc (OTCMKTS:ACRGF, CNSX:ACRG.U).

The deal saw Canopy spend $300.0 million now and pledge to spend over $3.4 billion when cannabis production and sales become federally legal in the United States. (Source: “Canopy Growth Announces Plan To Acquire Leading U.S. Multi-State Cannabis Operator, Acreage Holdings,” Canopy Growth Corp, April 18, 2019.)

“Our right to acquire Acreage secures our entrance strategy into the United States as soon as a federally-permissible pathway exists,” said Canopy Growth Chairperson and co-CEO Bruce Linton. (Source: Ibid.)

The Canopy Growth-Acreage deal puts Canopy in the U.S. in a big way, but it also implies that marijuana legalization in the U.S. could be close.

And consider that Acreage’s board counts former U.S. House Speaker John Boehner and former Canadian Prime Minister Brian Mulroney among its ranks. That’s some heavy-hitting political power with a lot of insight into how Washington works.

I imagine that Boehner is still very much attuned to the goings on in Washington, having been among the top lawmakers in the country for years. I’m sure he consulted with Acreage over the course of this deal, which is a very healthy signal that marijuana legalization is likely closer than many people think.

This deal, after all, would never have been made if the marijuana reform timescale was decades instead of just a few years..

Whether in this election cycle or the next, there’s a lot of momentum building up behind pot. The future is undoubtedly green.

TLRY Stock

Another marijuana company that has been in the news lately is Tilray Inc (NASDAQ:TLRY), although for different reasons than with Canopy Growth. Tilray stock was up about one percent in early trading today, but it has been flat over the past five days, continuing to tumble since the beginning of 2019.

Analysts continue to downgrade TLRY stock as it falls from the lofty gains it made after its initial public offering (IPO).

Long gone are the 1,000% gains that took place immediately after Tilray went public on the Nasdaq (the first pot stock to do so). Those gains have been replaced by a steady downward trend that has yet to slow down.

While I was wrong about the speed of its fall, I was ultimately right about Tilray stock when I began writing about it. The stock had risen far too high, far too fast, and it would see its price fall as a consequence.

The slow dying has still allowed many who invested early to lock in gains. But for those who came late to TLRY stock, there have been few bright spots.

Analysts are continuing to downgrade Tilray stock while Canopy Growth stock is receiving the opposite treatment post-Acreage deal. It’s easy to see, in my eyes, which of the two is the better stock right now.

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 is, on the whole, very positive.

We’re seeing small gains across the stock market, bouncing back from a day of similarly small losses.

But more importantly, we’re seeing more and more support for the idea of U.S. marijuana legalization being on the horizon, and potentially not too far off at all. With that in mind, marijuana stocks can expect a huge boost in the coming years.