Marijuana News Today
The marijuana news today is mainly focused on the turnaround in some of the top marijuana penny stocks, but another story is the resistance to the U.S. surgeon general’s recent warning about marijuana.
As usual, let’s tackle the political news before we get to the pot stock market performance.
On August 29, the U.S. Department of Health & Human Services issued a statement meant to protect young people and pregnant women from marijuana’s potentially harmful effects. (Source: “Surgeon General Releases Advisory on Marijuana’s Damaging Effects on the Developing Brain,” U.S. Department of Health & Human Services, August 29, 2019.)
Since then, we have seen some pushback from marijuana advocates.
A recent article in The Hill laid out several key ways that the attack on pot by Surgeon General Jerome M. Adams and Health & Human Services Secretary Alex Aza Azar jumped the gun. (Source: “Here’s what the Surgeon General gets wrong about marijuana,” The Hill, September 2, 2019.)
The first point in the piece, by Paul Armentano, deputy director of the National Organization for the Reform of Marijuana Laws (NORML), is that cannabis use is not actually increasing among teenagers as the surgeon general claimed, and has actually been decreasing.
This is very good news for those on the pro-pot side of things. After all, even most marijuana supporters believe in an age limit if that’s what’s best for children. So the fact that pot use is declining among young people is good to see.
The second point that Armentano debunked was the “gateway drug” trope. This is hardly new—we’ve been hearing this trope for years—but the idea that the top medical practitioner in the country was espousing those views is certainly not ideal.
Now, we’re a long way from the old days when people were quick to link marijuana to harder drugs like heroin and crack, but the reality that this “gateway drug” myth continues is harmful to the marijuana legalization effort.
Armentano even argues that marijuana has been shown in some cases to curb addiction, another positive for the pot legalization cause.
The final topic tackled in the column in The Hill is the belief that marijuana is deleterious to the developing brain, which Armentano disputes.
All around, the fact that well-reasoned and supported arguments can be made to refute some of the scaremongering surrounding marijuana is great for pot stocks.
Having a wealth of information to draw from when under attack by anti-pot crusaders is infinitely helpful in swaying public opinion toward the side of legalization and away from the old, fearful line of thinking.
Federal U.S. marijuana legalization remains one of the biggest events for the marijuana industry on the horizon, and until that day comes, the fight for legalization needs to be on the forefront of every weed investor’s mind.
Legalization will undoubtedly send weed stock prices soaring when it eventually gets passed.
There are more good tidings in the marijuana news today as two of our favorite marijuana penny stocks are on the rise, something that I’ve been waiting on for a long time.
The first stock we’ll take a look at is OrganiGram Holdings Inc (NASDAQ:OGI). OrganiGram stock jumped by over one percent in early-morning trading today and is up five percent over the past five days.
Long one of my top pot stocks, OGI stock was getting battered, much like every other stock in the current weed stock correction. That’s no surprise: marijuana penny stocks tend to fare worse in market downturns due to their higher volatility.
On the flip side, however, they also tend to recover faster and stronger.
OrganiGram stock is $4.28 a share right now, and that is a steal. The company is loaded with potential and remains one of my favorite picks in the cannabis industry.
OrganiGram has a number of strong supply agreement across Canada, while having a size that makes it a juicy acquisition target for other companies—especially at its low price.
On top of that, the company remains one of the few pot stocks that wasn’t accused of being overvalued back when share prices were on an upswing.
OrganiGram also has yet to land a major partnership, something that most peers of its market-cap size have managed to score. Far from from being a negative, however, this leaves the door wide open for another company to come in and invest big money into OrganiGram, sending OGI stocksoaring.
At its current price, I’m very bullish on the long-term outlook of OrganiGram stock.
What I largely consider a sister stock to OrganiGram, Hexo Corp (NYSE:HEXO) is a very similar in terms of size and position. HEXO stock also climbed about a point in early-morning trading today, and has gained about nine percent over the past five days.
Hexo, like OrganiGram, has solid supply agreements across Canada, which means strong recurring revenue each quarter. Hexo’s biggest win was in Quebec, where it remains one of the top suppliers of pot in Canada’s second-largest province.
Furthermore, the big selling point for HEXO stock versus OGI stock is that Hexo already has a partnership with a big alcohol company. While OrganiGram could also score such a partnership, we don’t have a timeline on that.
So while OrganiGram may have more potential long-term, Hexo is more suited to see gains during the next stock market recovery and moving forward, as its partnership could kick in and help boost sales with products like cannabis-infused beverages.
Overall, I’m just as bullish on HEXO stock as OGI stock, with the main difference being that Hexo is a less volatile pick (both in terms of potential and risk)—but not by much.
HEXO and OGI Stock Performances
The performances of OGI stock (black line) and HEXO stock (blue line) over the past week are seen in the chart below:
Chart courtesy of StockCharts.com
The marijuana news today showed us a healthy reversal of fortunes for select pot stocks.
While many other weed stocks were about even or down this morning, HEXO stock and OGI stock were able to continue their strong weeks with another day of gains.