Marijuana News Today: Nevada Marijuana Legalization Numbers Smash Projections

 Nevada Marijuana Legalization Numbers
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Marijuana News Today: Nevada Marijuana Legalization

The numbers are in, and the marijuana news today shows that the Nevada marijuana legalization process can be deemed as nothing but an unmitigated success—as far as revenue numbers go, at least.

Sales and tax collection numbers have already surpassed year-end projections by 25%.

That, frankly, is amazing. And great news for the marijuana industry.

Once the final figures are in, taxable sales are expected to crest $500.0 million through June, netting a total tax revenue of about $70.0 million. (Source: “1st year of Nevada marijuana sales smokes expectations,” ABC News, August 3, 2018.)

And while other states have also seen success since legalizing pot, Nevada has largely put them to shame. It had $195.0 million in sales in the first six months of the year, overshadowing the totals in other states like Washington, with $67.0 million in sales, and Colorado, with $114.0 million when it first legalized marijuana in 2014.

“We are viewed by many others outside Nevada as essentially being the gold standard,” said Nevada Taxation Department Director William Anderson. “It’s an often-used term, but it’s appropriate here.” (Source: Ibid.)

Of the $70.0 million that the state has raked in via tax revenue from marijuana legalization, $25.0 million of that will be directed entirely toward schools.

To reiterate the case for marijuana: fewer people in jail, less money going toward criminals, more tax money for schools…

Hard to beat that argument.

Of course, it’s not quite as simple as laid out above, but those are the broad-stroke results we’re seeing in the aftermath of the Nevada marijuana legalization.

Other states that are considering legalizing marijuana can now point to the success story that is Nevada as further proof that recreational pot is not an evil and, in fact, may be an overall good for a state.

But it hasn’t been all rainbows regarding Nevada marijuana. The medical pot market in the state claims to be suffering a supply problem due to producers focusing on lower-potency recreational marijuana versus the higher-potency strains that are only permitted for medical use.

Overall, though, the financial numbers are going to help sway politicians and voters alike toward a more marijuana-friendly position.

As I’ve long said, each state-by-state victory pushes us closer to the inevitable breaking point where the federal government will have to bring the issue to the national stage. While federal legalization is still years away, numbers like the ones we’re seeing from Nevada can help accelerate that.

Canopy Growth Stock

The marijuana news today—as far as the marijuana stock market is concerned—is dismal. We saw a slaughter take place, with many stocks down three percent in early-morning trading.

One stock that has yet to be debilitated today, however, is Canopy Growth Corp (NYSE:CGC).

CGC stock started this morning about even, which can be considered a resounding success, considering that many other pot stocks were getting crushed.

Canopy Growth stock has also broken relatively even over the past week, which is not worth celebrating in normal times, but—in the current pot stock market climate—is a positive sign.

We’re all still waiting for the correction to break. Last week gave us some hope that the marijuana industry could get back into the black, since it was a fairly stable week.

Being precise about the exact endpoint of this regression is difficult, but, in broad strokes, I expect to see a bounceback by September.

CGC stock and other pot stocks that have been battered in that time may be worth considering come late August and early September, since they will be essentially at discount prices.

Aurora Cannabis Stock

One of the companies that was suffering this morning, Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB) has been perhaps one of the more disappointing performers this summer.

With Aurora’s acquisition of MedReleaf Corp. now firmly in the rear-view mirror, the company saw virtually no uptick in its stock value—just a short-lived jump that was quickly erased the following day.

Making a huge move like that acquisition, for little payoff in terms of stock value, is disheartening for all Aurora Cannabis stock bulls, among which I usually count myself.

At the moment, the company has yet to show that it can extract itself from its funk.

Aurora Cannabis stock was down about three percent to start the week. And while many marijuana stocks, including Canopy Growth stock, are down big over the past month, Aurora Cannabis makes losses of 15% or so look pedestrian, compared to its 28% decline over that same time period.

At this point, it’s probably best to give Aurora Cannabis stock some time to recover before jumping in.

CRON Stock

Another company suffering the Monday blues is Cronos Group Inc (NASDAQ:CRON).

CRON stock was down about three percent in early-morning trading and is down about 15% over the past month.

On the flip side, Cronos stock broke about even last week, alongside both Aurora and Canopy Growth.

It bears mentioning that, while things are dire all around in the marijuana stock market, CRON stock is up about one percent over the past three months—compared to an 11% gain for CGC stock and a 17% decline for Aurora Cannabis stock.

This makes Cronos an interesting middle-ground stock. The company tends to go its own way, irrespective of industry trends, making it harder to predict.

CGC, ACBFF, & CRON Stock Performances

Check out the chart below of the recent performances of Canopy Growth stock, Aurora Cannabis stock, and Cronos stock.

CGC stock is marked in black, ACBFF stock is marked in blue, and CRON stock is marked in red.

Chart courtesy of StockCharts.com

Analyst Take

The marijuana news today is a mixed bag.

The massive success of legalization in Nevada is great long-term. But for those investing in the pot stock market right now, things have been rough. Every time we think the correction has run its course, we see those horrible red numbers return to haunt us.

While the downturn is going to inevitably dissipate, investing at the wrong time can see an investor lose a fair bit of money.

My advice: hold firm until we start to see sustainable gains, likely in September.