Marijuana News Today
The marijuana news today has us looking at the shifting nature of the cannabis stock market as it continues to undergo a rather long correction. Another issue is the ongoing mainstreaming of marijuana as medicine in the United States.
First, let’s get to the political news.
That medical marijuana has become mainstream in the U.S. is well supported by a number of polls. About two-thirds of Americans support recreational pot, and an even higher percentage of them are unopposed to medical marijuana.
We’re currently seeing the effects of that groundswell of support play out on the national stage, namely in the most recent Democratic presidential debate.
Beto O’Rourke, former member of Congress made famous for nearly unseating Republican heavyweight Ted Cruz in the Texas Senate election, is trying his best to distinguish himself among the crowded Democratic presidential field.
With 12 people on the debate stage on October 15, that’s no easy feat. But O’Rourke managed to get at least one message across that many can agree with: we need to explore the possibility of medical marijuana becoming legal at the federal level.
O’Rourke highlighted something we’ve long discussed as perhaps being another major advancement for the cannabis sector, just shy of legalization: medical marijuana being used to treat chronic pain. It would serve as a far healthier alternative to opioids, which have had a devastating effect on America.
O’Rourke shared a story about a veteran he once met who wouldn’t have gotten addicted to heroin if that veteran had been prescribed cannabis instead of opioids for his health condition.
“Now imagine that veteran, instead of being prescribed an opioid, had been prescribed marijuana, because we made that legal in America [and] ensured [Veterans Affairs] could prescribe it,” said O’Rourke. (Source: “Beto’s Marijuana Moment,” The Atlantic, October 16, 2019.)
His statement received immediate praise from another presidential dark horse, Andrew Yang.
All this serves to underscore what we already know: marijuana is now a national political issue in the U.S., and if a Democrat wins the presidency, we can expect to see, at the very least, decriminalization of cannabis in the next few years.
As far as PR goes, it doesn’t get much better than this: marijuana not only relieves pain but also helps to quell a massive epidemic that is costing thousands of people their lives yearly.
While the science is still out on whether cannabis is a good substitute for opioids, the possibility is there, and if the stars align and pot becomes a drug of choice as prescription pain medication, marijuana stocks would likely surge.
Furthermore, the goodwill that many Americans would feel from marijuana’s alleviation of the opioid crisis would likely translate into even more relaxed laws for pot, leading to higher profits and higher stock gains.
The future remains very bright for the pot sector. Based on sheer possibility alone, marijuana companies could become dominant in both the medical and recreational markets in the next few years.
As usual, however, it’s a question of timing, and right now marijuana stock investors will have to play the waiting game.
The marijuana news today as it pertains to the marijuana stock market is one of volatile swings that veterans of the industry should be used to by now.
On that theme, Aphria Inc (NYSE:APHA) released its first-quarter 2020 earnings report on October 15 and saw its share price rise by as much as 25% following the release.
APHA stock, however, has since fallen to Earth, declining by eight percent in early-morning trading today and by about as much over the past five days.
So what gives with the wild back and forth? Frankly, the numbers are great from the company’s most recent quarterly report, but the current bullish atmosphere in the cannabis stock market has made it difficult to earn sustainable gains at the moment.
Of course, that will all change when the correction subsides, but until then, strong sustained gains will be hard to come by.
And that leads us to a new way to make big money on the marijuana stock market: quick trades.
While not advisable for all investors (cannabis stocks are still very strong long-term, and those looking to buy and hold are more than likely going to make up their losses—and then some—in the coming months), day trading can be very lucrative, when looking at the recent performance of marijuana stocks.
That’s because cannabis stocks are so low right now that strong news events like good earnings reports or investment deals will send share prices skyrocketing.
Unfortunately, the overall bullish atmosphere means those gains may be short-lived, but investing as share prices move upward and selling at the peak can be a great way to see big gains.
Conversely, short sellers have the opportunity to play the downswing, taking advantage of the bullish short-term market and using said downswing to make gains.
It’s riskier and, again, is not for everyone, but if played well, this is a perfect market for investors to see huge short-term gains.
Another marijuana stock that has been a delight for short-term investors is CannTrust Holdings Inc (NYSE:CTST). CannTrust stock jumped by nearly five percent in early-morning trading today and is up a whopping 40% over the past five days.
That massive gain is partly due to the stock’s lower price, having dropped to about a ninth of its 2019 high.
CTST stock’s price drop was perpetuated by the cannabis stock correction hitting at the worst possible time, just as the company had its growing license suspended by Health Canada for violating regulations.
Now, CannTrust stock is by no means a stable long-term investment. In fact, the company has a long way to go before it can regain investor confidence.
But being so thoroughly battered as it was—and considering that the company still has value, despite the license suspension—we currently have a marijuana stock that is going to see massive gains and losses over the coming weeks and months.
As such, for those who are willing to bear the risk and follow CTST stock very closely, huge gains can be reaped from this beleaguered company. To those who time their investments well, the profits could be massive.
APHA & CTST Stock Performances
The performances of APHA stock (black line) and CTST stock (blue line) over the past week are seen in the chart below:
Chart courtesy of StockCharts.com
The marijuana news today is really just reinforcing something we already knew: there are always opportunities in the cannabis stock market for gains, even in the down periods.
Right now, pot stocks have sunk fairly low. Long-term, they will more than likely bounce back stronger than ever. But short-term, there are a number of opportunities to make big money quickly (for those with the stomach for risk).
While not an ideal investing strategy for everyone, playing the volatile market day to day could be a great way to eke out massive returns, even during a correction.