Marijuana News Today
The marijuana news today has yet another study that supports pot legalization in the U.S., with JAMA Pediatrics coming out with data supporting legalized pot.
The data in question shows that in states where recreational marijuana is legalized, teens are less likely to smoke pot. And it has to be recreational marijuana; medical marijuana showed no effect. (Source: “In states where marijuana is legal, licensed dispensaries are pushing out drug dealers,” MarketWatch, July 9, 2019.)
This does make a fair bit of sense. After all, illicit drug dealers are hardly known for their stringent identification policies. Licensed dispensaries, however, much like alcohol sellers, have a lot to lose if they are found to be in violation of these regulations, making it harder to teens to get their hands on weed.
The researchers mined data from the Youth Risk Behavior Survey between 1993 and 2017. Washington, D.C. and 27 states provided data on teen use before and after changes to medical marijuana laws, allowing JAMA to draw the conclusions above. Seven states contributed data before and after recreational marijuana laws changed. More than one-million high school students were included in the study.
While usage rates among younger people is down, it’s still pervasive among teens: nearly 40% of high school seniors reported having used marijuana in the past year, and just under six percent said they use it every day. Marijuana has eclipsed cigarettes, in fact, with daily weed use higher among teens than daily smoking.
And, as one would expect, vaping is growing increasingly popular among young people.
But the JAMA study in the marijuana news today is altogether good ammunition for those looking to push marijuana legalization across the U.S. With a number of presidential hopefuls already coming out in support of marijuana reform, this is just one more reason for them to push harder for these changes.
The list of benefits of legalize pot only continue to grow, as does American’s acceptance of the drug. These two factors coming together could very well be just what the industry needed to get that final push into legalization territory. It won’t be a hard case to make.
As for marijuana investors, the faster we see marijuana legalization take hold on the federal level in the U.S., the faster we’ll see marijuana stocks rise to their true potential and sales and valuations will balloon in concert with U.S. pot laws being passed.
Let’s get the bad news out of the way first: the marijuana stock market continues to struggle with most shares falling today. Which isn’t to say it’s all negative—we’ll get to a couple of positive players on the market—but by and large, this has been a tough time for marijuana stocks. The past two months have simply not gone in the favor of marijuana, and we’re seeing shares fall across the board.
But no pot stock is worse off right now than CannTrust Holdings Inc (NYSE:CTST). CTST stock took a nosedive yesterday and continues to fall today, dropping eight percent in early morning trading. Over the past five days, CannTrust stock has lost 31%.
All this carnage at CannTrust comes following an audit from Health Canada that found the company’s greenhouse facility in Pelham, Ontario to be non-compliant with certain regulations.
The non-compliant rating is based on observations by the regulator regarding the growing of cannabis in five unlicensed rooms and inaccurate information provided to the regulator by CannTrust employees,” the company wrote.
“Growing in unlicensed rooms took place from October 2018 to March 2019 during which time CannTrust had pending applications for these rooms with Health Canada. These rooms were constructed in accordance with regulations and Good Production Practices, and licenses were issued for each of the five rooms in April 2019. There are 12 rooms in total at the facility.” (Source: “CannTrust Statement Regarding Health Canada Audit,” CannTrust Holdings Inc, July 8, 2019.)
Whatever the reason, the conclusion is this: Health Canada has placed a hold on CannTrust Holdings Inc’s inventory, which includes over 10,000 pounds of dried cannabis.
Over 15,000 pounds were placed on a voluntary hold by the company at the Vaughan, Ontario facility due to the cannabis having originated from these unlicensed rooms. The company predicts that product shortages are to follow.
“Our team has focused on building a culture of transparency, trust and excellence in every aspect of our business, including our interactions with the regulator,” said CEO Peter Aceto. “We have made many changes to make this right with Health Canada. We made errors in judgement, but the lessons we have learned here will serve us well moving forward.” (Source: Ibid.)
This is a crushing blow for CannTrust Holdings stock and one that it will not soon recover from. While it will hit a nadir and potentially bounce back, as we’ve seen in other cases, that won’t take place for a long time yet.
In one of the few bright spots in the marijuana news today, Cronos Group Inc (NASDAQ:CRON) gained nearly one percent in early morning trading, but finds itself down five percent over the past five days.
While hardly amazing numbers, this is actually rather decent, considering just how poorly many of its competitors have fared in recent times.
CRON stock may not be setting the world on fire with how well it’s doing right now, but it’s holding. And in this downturn market, that’s worth a lot.
It’s also solidifying CRON stock as one of the premier marijuana companies. I was skeptical of Cronos Group early in its lifespan on the market, concerned over what I saw to be weaker performances compared to its direct competitors.
It’s safe to say that Cronos Group Inc has changed my opinion now, with many believing it to be among the top pot stocks in the industry. Its ability to withstand this downturn without sustaining too much damage is evidence that it is becoming a strong marijuana company and speaks to its maturity.
Keep an eye out for the company’s August 8 release of its latest earnings report.
One company that I have been bullish on for some time now continues to perform with aplomb in the fact of the marijuana pullback. That company is Innovative Industrial Properties Inc (NYSE:IIPR).
IIPR stock gained nearly two percent in early morning trading and is up a point over the past five days. That makes it one of the best recent performers out there, even if, much like CRON stock, IIPR stock isn’t exactly making anyone’s head spin with its recent gains.
I’ve long been a fan of Innovative Industrial Properties as it pays out a marijuana divided and is a real estate investment trust operating in the pot space—a space that is wide open and holds few major competitors.
Not to mention that IIPR stock is one of the best ways to gain exposure to the U.S. pot industry right now.
CTST, CRON, and IIPR Stock Performances
The performances of CTST stock (black line), CRON stock (blue line), and IIPR stock (red line) over the past week are seen on the chart below:
Chart courtesy of StockCharts.com
The marijuana news today is pretty solid on the political front, even as the marijuana stock market continues to falter.
U.S. marijuana legalization continues to gain steam as yet another study shows the benefits of ending prohibition.
The pot stock market, meanwhile, continues to show poor returns, but several gems are emerging even in the midst of this pullback.