Marijuana News Today: Medical Marijuana Boom in the U.S.

Marijuana News Today
iStock.com/Denise Hasse

Marijuana News Today

Following the long weekend, our marijuana news today focuses on the U.S. medical marijuana boom—as well as on the several marijuana stocks that were down in early-morning trading today (with one notable exception).

First, the increasing interest in medical marijuana in the United States:

The CEO of Trulieve Cannabis (OTCMKTS:TCNNF, CSE:TRUL), the first and largest fully licensed medical marijuana company in Florida, recently said there has been a major swap going on from opioids to cannabis, in terms of treating certain ailments.

“We’re seeing a huge transition,” said Kim Rivers, the Trulieve CEO. “That’s actually one of our initiatives in front of the [Florida state] legislature this upcoming session, to introduce policies to say instead of only having opioids as an alternative, why not medical cannabis?” (Source: “Florida’s largest medical cannabis producer seeing ‘huge transition’ from opioids to marijuana treatment: CEO,” CNBC, October 8, 2018.)

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“There have been a number of recent studies that have come out that have shown that in states where medical cannabis programs are robust, the number of opioid prescriptions reduces dramatically,” said Rivers.

What This Means for Marijuana Stocks

As has been the case all over the world, whenever medical marijuana legalization enters a particular jurisdiction, recreational marijuana legalization more often than not follows close behind.

The same holds true for the U.S., which is becoming increasingly permissive toward medicinal marijuana. The increasing acceptance of medical cannabis is likely to pave the way toward more acceptance of recreational pot.

The fact that marijuana has been replacing opioids as the drug of choice to treat a variety of conditions further improves marijuana’s future prospects. After all, if there’s one subset of drugs that has taken serious damage in the headlines as of late, it’s opioids.

The overprescription of opioids—and their proclivity for being abused—has led to a massive PR campaign painting opioids as dangerous in the eyes of many U.S. citizens, perhaps more dangerous than the far less addictive cannabis.

If producers can effectively market cannabis as a suitable alternative to opioids, we can expect to see a huge market share open up for medical marijuana.

Furthermore, marijuana’s position as a safely prescribed medicine will help smooth the path toward recreational cannabis legalization in the U.S. as Americans become increasingly comfortable with marijuana in general.

CGC Stock

The marijuana news today continues its focus on medical cannabis as Canopy Growth Corp. (NYSE:CGC) completed a legal export of cannabis products to the U.S. for research purposes. That was the first event of its kind under the new Drug Enforcement Administration’s (DEA) import regulations.

You may remember that Tilray Inc (NASDAQ:TLRY) saw its stock value soar when it completed a similar deal a few weeks earlier.

The reason that investors are getting so excited over these relatively small developments has to do with the fact that the DEA was forced to reclassify the cannabis extract cannabidiol (CBD) from being a Schedule I drug to being a Schedule V one, provided that the CBD being produced contains only the smallest amounts of tetrahydrocannabinol (THC).

Mark Zekulin, president and co-CEO of Canopy Growth, said the following:

The United States presents a unique market opportunity and as the most established cannabis business in the world we, in turn, offer a unique ability to advance standardization, IP development, and clinical research that can improve the understanding and legal application of cannabis and cannabinoids.

(Source: “Canopy Growth Completes First Legal Medical Cannabis Export from Canada to the United States,” Cision, October 9, 2018.)

Zekulin added, “By engaging in the market through federally legal means and with the right partners, we can create a US-based center of expertise while also supporting our rapidly expanding global business.”

Unfortunately, the marijuana stock market was taking a bit of downturn this morning, and Canopy Growth stock was no exception—even with this good news. The stock was down about two percent in early-morning trading.

Over the past five days, however, we’ve seen CGC stock climb by over seven percent and continue to perform well on the markets, making it consistently the best marijuana stock on the market, in my estimation.

TLRY Stock

Since Canopy Growth is following in Tilray’s footsteps with its medical cannabis exports to the U.S., let’s examine how the most volatile pot stock around has been doing.

Tilray stock was, unsurprisingly, once more beset by a wild swing, this time a downturn. It fell by about five percent in early-morning trading today.

It’s very difficult to discern just where TLRY  stock will end up on any given day. We’ve talked a lot about the stock’s inability to register sustainable gains in any predictable manner, making it a riskier—if more exciting—play.

The five-percent fall this morning, which followed a several-day decline, has wiped out all the gains that Tilray stock made last week, putting it down about five percent over the past five days.

HYYDF Stock

One of the few companies in the marijuana news today to gain, Hexo Corp (OTCMKTS:HYYDF, TSE:HEXO), jumped by about one point in early-morning trading. That means the stock was up about four percent over the past five days.

But more importantly, Hexo stock has registered a major victory by closing its deal with Molson Coors Brewing Co (NYSE:TAP). While the partnership was not in doubt, the two companies finalized their agreement to bring “Truss,” a non-alcoholic cannabis-infused beverage, to market.

Cannabis-infused drinks are a rapidly growing subset of the legal marijuana industry, sparking a lot of investor interest over the past few months.

HYYDF stock has seen large gains since it first marked its deal with Molson Coors.  Hexo should continue to benefit both from its Big-Alcohol partnership and its many supply agreements in Canada, particularly in the province of Quebec.

CGC, HYYDF, & TLRY Stock Performances

The CGC stock (black line), HYYDF stock (blue line), and TLRY stock (red line) performances from the past week are seen in the chart below.

Chart courtesy of StockCharts.com

Analyst Take

The marijuana news today shows yet another strong step toward more acceptance of marijuana in the United States.

We have been seeing increased usage of medicinal marijuana in the U.S., supplanting other forms of medical treatments that are often considered to be more dangerous.

The U.S. has been increasing its medical marijuana research on the federal level, paving the way toward marijuana legalization by the federal government. If/when that day comes, expect pot stocks to soar accordingly.