Marijuana News Today: New Jersey Marijuana Legalization on Track for January

Marijuana News Today
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Marijuana News Today

The marijuana news today brings us good tidings as New Jersey marijuana legalization is set to be completed by January. The legalization bill has been approved in a preliminary vote and is all but certain to pass both state houses in the coming weeks.

This will make New Jersey the 11th state to legalize recreational pot in the United States. It represents another major victory for U.S. marijuana legalization as a whole.

New Jersey has about nine million people, adding another huge block of potential consumers to the mix. Well over 80 million people in the U.S now have access to legal recreational marijuana. That’s a huge chunk of the country.

The New Jersey marijuana legalization is even more interesting in that it will have some of the lowest taxes in the Union on pot, with a 12% state tax and a two percent municipal tax on top of that. (Source: “New Jersey Marijuana Legalization Heading to Final Vote by Lawmakers,” Bloomberg, November 26, 2018.)

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Marijuana taxes in other states range from to 16% to 37%. While we could eventually see the tax rate change in New Jersey, it’s an interesting departure from other states’ marijuana plans.

Of course, what this news means for marijuana investors is that the push for federal legalization is intensifying.

It’s worth remembering that New Jersey is one of the few states to push its legalization effort through the state legislature from the beginning, rather than via a referendum.

This speaks to the growing public support for marijuana; politicians are now finally feeling secure enough to support marijuana reform without fearing severe political blowback.

U.S. Marijuana Legalization

As the data rolls in from states that have legalized cannabis concerning job creation and tax revenue—not to mention the money saved on law enforcement—it’s going to make the case for total marijuana legalization in America that much stronger.

As I have mentioned before, the future of the marijuana industry rests in the United States. Marijuana companies will only begin to realize their full potential when they have full access to the U.S. and European markets.

While other markets will likely prove very lucrative—like South America—the U.S. is still the No. 1 target, not only for its massive consumer base, but also for its access to vast amounts of capital.

We’ve already seen what happens when a large international company— such as Constellation Brands, Inc. (NYSE:STZ)—begins to invest in pot. Those types of investments are only going to increase if the U.S. enacts federal legalization. And with those investments will come marijuana stock growth the likes of which we’ve never witnessed before.

CGC Stock

While the marijuana news today is positive, the pot stock market has been rather muted this week. Today, most of the stocks are down a percent or two, or standing firm.

Canopy Growth Corp (NYSE:CGC), however, appears to be on the upswing, if only slightly. CGC stock gained about one percent in early-morning trading today, separating it from the pack as most marijuana stocks either saw losses or remained static.

Canopy Growth stock is down three percent over the past five days, prolonging the correction that we’ve seen since late October.

The thing about CGC stock is that, despite its recent hiccups, there’s still so much potential for the company. No company is better suited to take advantage of the eventual U.S. marijuana legalization than Canopy Growth.

The company already has steady investment partners that can flood it with capital when the time comes.

Furthermore, Canopy Growth has among the highest production capacity in the legal cannabis industry, coupled with strong foundational success via supply agreements in Canada, proving that the company understands how to negotiate with governments.

OGRMF Stock

On the flip side of CGC stock in the marijuana news today is OrganiGram Holdings Inc (OTCMKTS:OGRMF, CVE:OGI).

OGRMF stock dropped 2.5% in early-morning trading today, and is down about two percent on the week.

What makes today’s drop surprising, however, is that it comes on the back of a strong move that should have been in OrganiGram stock’s favor. The company just announced that it has become an official supplier to the Saskatchewan government.

“We are pleased to have been selected as an official supplier of cannabis in Saskatchewan,” said Tim Emberg, senior vice president of commercial and sales operations. (Source: “Organigram becomes an official supplier of cannabis in the Province of Saskatchewan,” Cision, November 27, 2018.)

“We look forward to working with retailers and key distributors to help ensure the success of the adult recreational market in the province.”

While Saskatchewan is hardly the most populous or richest province in Canada, this is still a gain that should have produced market goodwill for the company.

What this shows us is that the current marijuana stock market correction is going to need a big event to help turn it around, such as another state announcing legalization or another outside company making a huge capital investment in the marijuana sector.

CGC and OGRMF Stock Performances

The CGC stock (black line) and OGRMF stock (blue 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 looking to the future to see huge stock gains return to the industry.

The short-term outlook is bleak as the market correction sinks its teeth into share prices, but this is a passing phase.

We’ll see gains return to the marijuana stock market in due time. The main thing we’re waiting for is a massive event like nation-wide U.S. marijuana legalization or another large injection of capital into the sector.