Marijuana News Today: Market Rebounds Despite Canada Pot Shortages

Marijuana News Today
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Marijuana News Today

The marijuana news today has us seeing a continued marijuana shortage plague Canada while the pot stock market rebounds.

In a frustrating example of bureaucracy getting in the way of business, one of Canada’s most populous provinces—Alberta—has received only about one-fifth of the marijuana it was supposed to have on hand. As a result, it will no longer be providing retail cannabis licenses. (Source: “Alberta receives only fifth of the marijuana it ordered as country-wide shortage worsens,” Financial Post, November 21, 2018.)

“This has been the case in Alberta and across Canada,” Alberta Gaming, Liquor and Cannabis commission president, Alain Maisonneuve, said in a statement. “Unfortunately, regardless of our efforts, we are seeing the supply of most products run out.”

While some pot producers have agreed to step up to the plate, ultimately this is a case of the current producers biting off more than they could chew, and this is impacting marijuana sales.

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The good news is that this likely won’t have too profound an effect on the pot stock market, so long as it is dealt with speedily.

Furthermore, the shortage of weed speaks to the high demand for the product across the country.

Demand is so high, in fact, that some have termed the Wednesday before Thanksgiving “Green Wednesday” due to the spike in sales for cannabis and cannabis-related products in the lead-up to the holiday. (Source: “Green is the new black as cannabis retailers push ‘Green Wednesday’ as the next big shopping holiday,” CNBC, November 21, 2018.)

Of course, it is worth noting that Canada and the U.S. have different dates for when they celebrate the holiday, but the simple fact that there’s now an unofficial consumer holiday regarding marijuana—joining the ranks of Cyber Monday and Black Friday—is a good sign and speaks to the heavy demand for the product.

The marijuana industry was bound to face hiccups like supply shortages, as this is often the case in markets where the drug is newly legalized. Still, you’d hope that Canada would be more prepared and have better than 20% of the promised cannabis in stock.

All the same, the long-term projections of the marijuana industry are still bright and will largely be unaffected by this blip, even if it does potentially lower sales numbers on the next quarterly reports and deal a blow to short-term gains.

CGC Stock

Despite the marijuana shortages, we’re still seeing strong growth across the industry in one of the better days for the market in weeks.

Canopy Growth Corp (NYSE:CGC) is among the top performers, picking up five percent in early-morning trading today. CGC stock is still down about two percent over the past two weeks, however.

Despite that, the future of Canopy Growth stock looks about as bright as ever. The company is signaling a number of strong moves that make it a pot stock to watch in 2019.

The first is that its investment arm is ramping up interest in the U.S. market. Canopy Rivers Inc (CVE:RIV) is able to skirt the rules imposed by the Toronto Stock Exchange (TSE) against investing in marijuana where it is illegal federally by listing on the Canadian Venture Exchange (CVE), where no such rule exists.

While Canopy Rivers has yet to yield fruit for investors, it remains on the hunt for lucrative investments in the U.S. market, which only serve to bolster CGC stock in the future.

Overall, despite the correction and a weaker-than-usual quarterly report, Canopy Growth is still set to make strong gains in 2019, and remains among the top performers in the marijuana industry in 2018 year-to-date.

TLRY Stock

Another strong performer to start the day is Tilray Inc (NASDAQ:TLRY).

Tilray stock climbed about five percent in early-morning trading today. TLRY stock has also performed admirably over the past five days, showing a gain of about seven percent.

This marks an extended turning point in the current correction. While I don’t think we’re out of it yet, this mini-run is still a relief from the downturn that caused many companies to lose value in recent weeks.

All that being said, Tilray stock also has an impressive forecast, due to the growing strength of the Nasdaq for marijuana stocks.

Both Tilray and Cronos Group Inc (NASDAQ:CRON) have shown that the Nasdaq is a kinder and more forgiving exchange for pot stocks—at least for now—as both have outperformed their competitors in recent weeks.

Much of that has to do with the typical investor on the Nasdaq being used to nascent and volatile industries like tech, so marijuana is familiar to them in a way.

Tilray stock also sports a number of strong fundamentals that bolster its future projections, like supply agreements and a globally-minded expansion.

ACB Stock

Aurora Cannabis Inc (NYSE:ACB) was mentioned as one of the companies that would provide some relief to the Canadian marijuana shortage.

While we have yet to see that promise come to fruition, that hasn’t stopped Aurora stock from making decent gains over the past few days.

ACB stock gained three percent in early-morning trading today, and it is up about one percent over the past five days.

Falling between CGC and TLRY stock in terms of gains, ACB stock is performing much along the industry average, with CGC stock being a little weaker these past few weeks and TLRY being stronger.

Aurora stock has a lot going for it with a very similar host of qualities that it shares with Canopy, if to a lesser degree.

As such, I see gains in store for ACB stock, although CGC is still likely to outperform in 2019.

CGC, TLRY, and ACB Stock Performances

The CGC stock (black line), ACB stock (blue line), and  TLRY stock (red line) performances from the past week are seen on the chart below:

Chart courtesy of StockCharts.com

Analyst Take

The marijuana news today has us still grappling with the supply shortages in Canada.

While these headaches may cost marijuana stocks in the short term, the long term is still looking great with strong gains on the horizon for the industry.

There’s simply too much to look forward to in the pot industry to worry much about the current correction, which will likely yield to a prolonged rally within the next few months.