Marijuana News Today
The marijuana news today has yet another country joining the already long list of states that have legalized marijuana in one form or another. This time, New Zealand is making medicinal pot more widely available after it was previously heavily restricted. (Source: “New Zealand law to make medical marijuana widely available,” CBC, December 11, 2018.)
Now, New Zealand is a very small market. The country, after all, has fewer people in total than in Canada’s largest city, Toronto.
Still, another market is another market. And, of course, marijuana legalization is about momentum.
As governments across the globe catch up with the times, we’re going to see more pressure on the remaining holdout countries to legalize marijuana or else seem draconian by nature.
Furthermore, trade and tax revenue can both greatly be helped by the legalization of pot. Not to mention that law enforcement spending can be reduced if you’re policing and prosecuting fewer crimes.
These are all very common motivations to legalize marijuana. New Zealand possibly moving toward full legalization, now that the government has made its stance on medical marijuana laxer, is yet another step on the path toward near-total acceptance across the globe.
Countries will not want to be left behind while their equals benefit greatly from the legalization of pot.
That leads us to the future of marijuana legalization.
We’ve discussed at length the chances of U.S. marijuana legalization. While it is an inevitability at this point, I’d bet that we’re at least two years away before the process gets started, and more likely six to eight years away before we see marijuana legalization commence.
While I’m not as well versed with European politics, there does seem to be steady movement toward legalization in several markets, most notably in Germany.
This is the second-most exciting market in the world after the U.S., due to both the feasibility of legalization and the amount of wealth that can be tapped.
While the country has made no overt moves toward marijuana legalization, companies like Canopy Growth Corp (NYSE:CGC) have begun taking advantage of the legal medicinal marijuana trade and have seen sales grow in the German market.
In any case, the fact is that we’re as close as we’ve ever been to seeing multiple major economies legalize marijuana, which may come to fruition in 2019.
Any country that joins Canada in total legalization will be a huge boon to the marijuana industry and will make sticking it out through this correction well worth it. There is still potential to double your investment moving forward as countries inevitably introduce increasingly laxer marijuana legislation.
Having already mentioned Canopy Growth stock earlier, let’s continue on with a more in-depth analysis.
It’s worth noting, however, that we are seeing a rally in the marijuana stock market. While not all companies have benefited from the boost, a number of major marijuana companies were up several points in early-morning trading today.
This by no means shows that we’re clear of the correction that has been plaguing the industry for several weeks now, but it does at least represent a welcome respite for marijuana investors.
CGC stock jumped over two percent in early-morning trading today. While not exactly mind-blowing, the gain was a nice change of pace considering how sour the past several weeks have been.
Canopy Growth stock overall is down about five percent. Despite the weakness in the market over the past month or so, however, CGC stock still counts 2018 as a big win, with a 33% gain so far.
While I imagine that 2018 is likely to close out on a down note, ultimately it was a strong year for Canopy Growth stock and the future is, as always, extremely bright for the star of the industry.
With so many markets left waiting to be explored and the production capacity, know-how, capital, and ambition to take advantage, there’s little reason to doubt that CGC stock will be on the upswing in 2019.
In yesterday’s edition of this column, Aurora Cannabis Inc (NYSE:ACB) had pulled off yet another acquisition, this time of a Mexican company, Farmacias Magistrales.
At first, the market made little of the buy, but it seems that today we’re seeing a positive turnaround for ACB stock, as it rallied four percent in early-morning trading today.
The stock is up 4.5% over the past five days.
Farmacias recently became Mexico’s first federally licensed importer of raw materials containing tetrahydrocannabinol (THC). The imported THC and cannabidiol concentrates are going to be used to create various cannabis oil products to be sold in the medicinal marijuana market.
The deal will see Aurora stock gain access to around 80,000 retail points and 500 pharmacies and hospitals in Mexico. (Source: “Aurora Cannabis to acquire Mexican company following partnership deal,” Global News, December 10, 2018.)
This continues Aurora’s trend of ambitious acquisitions. While that has not really paid off for the company for much of 2018 (ACB stock was disappointing this year, losing 22% year-to-date), these acquisitions have angled it for a strong future.
While I’m tentative about my Aurora stock forecast for 2019, I still believe there is potential in this company for substantial gains.
CGC and ACB Stock Performances
The CGC stock (black line) and ACB stock (blue line) performances from the past week are seen on the chart below:
Chart courtesy of StockCharts.com
Every day seemingly brings us closer to a worldwide trade in legal marijuana. It seems that new countries are constantly relaxing regulations on pot, with the marijuana news today focusing on New Zealand.
The future is global for pot, and while we will certainly have to suffer through our fair share of downturns, ultimately there is still a lot of growth potential in marijuana stocks.