Marijuana News Today
The marijuana news today is positive all around as the U.S. continues to edge toward marijuana legalization while the pot stock market stages a strong comeback.
A number of recent surveys have shown that support for marijuana legalization in the U.S. is at an all-time high. About 60% of Americans believe pot should be legalized, according to three recent national surveys. (Source: “Marijuana legalization is very popular,” Vox, April 15, 2019.)
That number falls to 50% for specifically recreational legalization (with 31% against) in a YouGov survey, but all the signs point toward a single conclusion: the majority of Americans are pro-pot.
That is a stunning reversal from the years of prohibition and weak support we’ve seen for marijuana in the past, with these surveys showing just how far along marijuana has come in the U.S.
Industry watchers have their eyes glued to the American political system, since marijuana legalization in the U.S. will no doubt send pot stock prices soaring.
After all, we’ve seen huge growth in the past few years for the legal weed industry, with Canada being the only major economy to legalize the drug. Canada, however, has a population and gross domestic product (GDP) smaller than California.
Opening up pot to the millions of consumers in the U.S. would speed the market along toward reaching its full potential, with a lot of gains to be made.
And we have been seeing newfound public support for legalization make its way into mainstream political rhetoric. More politicians than ever have come out in support of weed legalization, both on the federal and the state level.
In fact, we have several states in 2019 that will likely legalize marijuana through the legislature rather than a referendum—a sign that politicians no longer view marijuana as an issue too dangerous to touch themselves.
Beyond that, several presidential candidates from the Democratic Party have pledged their support toward marijuana reform. This means, if everything goes well, we could see marijuana legalization legislation moving through Congress within two years.
While that is admittedly unlikely, it is not far-fetched. In fact, this is inarguably the closest that the U.S. has been to legalizing marijuana in decades—maybe ever.
With that, pot stocks are poised for another breakout in the coming years. Long-term investors should be licking their chops at the prospect, with the marijuana industry still very much being a growth industry.
Moving away from the future potential of the marijuana industry, let’s tackle the present. The marijuana news today has us smiling, with the pot stock market rallying strongly after it took a hit yesterday.
Many stocks were up big to start the day, with one in particular rallying strong: Canopy Growth Corp (NYSE:CGC).
CGC stock climbed by over four percent in early-morning trading and finds itself up by more than a point since last week. This is a strong turnaround from yesterday’s steep plunge as the market overall took a beating.
It has been a very busy past few days for Canopy Growth Corp. Last week, it was announced that Canopy had joined the S&P/TSX 60, a Canadian index of large-cap stocks. (Source: “Canopy Growth is about to become the first pot stock to join S&P/TSX 60 index,” Financial Post, April 12, 2019.)
This followed a major Canadian bank lowering its revenue projections for Canopy Growth’s next quarter by 26%.
“We see street estimates being far too high, which we expect to result in large earnings misses next quarter,” said Bank of Nova Scotia (NYSE:BNS) analysts. (Source: “Canopy Growth heading for ‘large earnings misses next quarter’: Scotiabank,” Yahoo! Finance, April 11, 2019.)
And now we have the company announcing an all-cash acquisition of Spain-based licensed cannabis producer Cáñamo y Fibras Naturales, S.L., known as Cafina.
Cafina is one of three companies in Spain authorized to cultivate, distribute and export cannabis containing more than 0.2% of tetrahydrocannabinol for medicinal and research purposes, as well as cultivate hemp. (Source: “Canopy Growth Expands European Footprint, Acquires Spanish Licensed Cannabis Producer Cafina,” Cision, April 16, 2019.)
This is another huge win for CGC stock as the company expands its European footprint in the only other market that can rival the U.S. in size and wealth.
This move further situates Canopy Growth as a top marijuana company poised to take advantage of European legalization when it hits. With all that in mind, I’m still very bullish on Canopy Growth stock.
Much like Canopy, OrganiGram Holdings Inc (OTCMKTS:OGRMF, CVE:OGI) was shellacked yesterday on the pot stock market. But like CGC stock, I predicted that OGRMF stock would be quick to bounce back—and I was right.
OrganiGram stock jumped by over four percent in early-morning trading today, but is still down by three percent over the past five days.
Yesterday, the stock took a 10% fall after the company’s quarterly financial report disappointed analysts. After having a positive-revenue quarter, the company incurred losses of $4.8 million. (Source: “UPDATE: Cannabis company Organigram swings to loss in Q2 but revenue tops estimates,” MarketWatch, April 15, 2019.)
Gross revenue rose to CA$33.5 million from CA$2.9 million a year ago, helped by strong sales numbers post-legalization. Gross revenue, in fact, outdid analyst expectations.
The company was also able to significantly reduce its cost of production from CA$1.48 a year ago to CA$0.85 this quarter due to, among other factors, higher plant yield.
All things considered, it wasn’t a bad quarterly report at all, but investors wanted to see positive cash flow and panicked when that wasn’t the case. But things have stabilized and OGRMF stock has been quick to recover.
The company further assuaged doubt when it said in a recent interview that it was looking to focus on the edible market in Canada with products like weed chocolate. Edibles are set to be legalized in that country in the fall. (Source: “Organigram eyes chocolate as pot ‘differentiator’ after revenue soars in latest quarter,” BNN Bloomberg, April 15, 2019.)
Much like with Canopy Growth stock, I have immense confidence in OrganiGram stock.
CGC and OGRMF Stock Performances
The performances of CGC stock (black line) and OGRMF stock (blue line) over the past week are seen on the chart below:
Chart courtesy of StockCharts.com
The marijuana news today is enough to have pot stock enthusiasts smiling.
With political support for American marijuana legalization being at its strongest point and the pot stock market generating strong returns in 2019, this has been a great day to be a weed investor.