Marijuana News Today: Pot Stock Market Soars Following First Signs of Profitability

Marijuana News Today: Pot Stock Market Soars Following First Signs of Profitability
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Marijuana News Today

It’s a fantastic day for pot stocks, as the marijuana news today has us seeing a huge rise across the board in share prices following Aphria Inc (NYSE:APHA) hitting profitability.

The entire industry was on the rise—we’ll get more into that below—but it is a fantastic day for the pot stock market in general and may be just what we need to end the marijuana correction we’re currently mired in.

But before we get to the pot stock market, there’s other good tidings in the marijuana news today from the political side of things.

In the U.S., more than 100 organizations, including the NAACP, ACLU and Human Rights Watch, have joined together calling on Congress to institute sweeping marijuana reform that would not only legalize marijuana but go a long way towards mending the discriminatory practices of the “War on Drugs” by focusing on giving back to damaged communities affected by pot prohibition.

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“We are encouraged by the progress around marijuana reform at the state and federal level,” the groups wrote, mentioning the various proposals and laws being pushed forward both on the state level and federally. “While this progress is promising, we insist that any marijuana reform or legalization bill considered by Congress include robust provisions addressing social justice and criminal justice reform.” (Source: “NAACP, ACLU And Allies Demand Congress Pass Marijuana Bill With Justice Focus,” Forbes, August 2, 2019.)

The organizations are specifically backing the Marijuana Opportunity Reinvestment and Expungement Act, a bill that is supported by presidential hopeful Senator Kamala Harris.

The bill would remove cannabis from the Controlled Substances Act, work towards expungement and resentencing of prior convictions, and prevent agencies from denying access to federal benefits or citizenship status for immigrants due to marijuana use.

Furthermore, the bill would see a five-percent federal tax on marijuana sales.

This is another potential win for marijuana legitimacy, something that has a major focus in 2019. In fact, I’d go so far as to say this year has been the most progress ever in terms of pushing marijuana as a generally accepted and legal substance. From Davos, Switzerland to Congress, we’re seeing organizations far and wide begin to push forward on marijuana reform.

And, of course, the faster we can get marijuana legalized in more markets, the higher share prices will rise. The U.S. is still likely years away from legalization, but the amount of support that marijuana is garnering is shortening that time frame every day.

APHA Stock

While the marijuana news today on the political side of things is interesting and worthy of note, the real news today is on the pot stock market. Namely, that Aphria Inc has become the first major cannabis company to show a profit on its quarterly report.

As a result, APHA stock is skyrocketing, up 28% in early morning trading. Aphria stock has now shown 22% gains over the past five days.

APHA stock soared after it said it earned $12.0 million during its most recent quarter and posted a revenue of $129.0 million. The revenue figure beat the highest analyst estimate, and was up 75% from the previous quarter. (Source: “Aphria becomes first Canadian pot company to turn a profit,” BNN Bloomberg, August 1, 2019.)

Revenue from recreational cannabis sales climbed to $18.5 million, up 158% from the prior quarter. The company sold 5,574 kilograms of cannabis.

Another big metric that many investors value, cash cost per gram of dried cannabis (essentially production costs), fell to $1.35 from $1.48.

Overall, this is exactly what the industry needed. Considering marijuana stocks had been in the midst of a correction for over a month now, this was just the kind of jolt that stocks needed in order to turn things around.

Aphria stock, meanwhile, has now become one of the hottest stocks, at least in the near-term. If it can string together several profitable quarters in a row, expect to see APHA stock continue to rise.

In the meantime, I expect the resultant boost from these gains will be long-lasting and likely push APHA stock up for a few days yet.

HEXO Stock

As mentioned earlier, this is the case of a rising tide lifting all boats. Most pot stocks are seeing strong gains across the board, with some gaining more than others.

HEXO Corp (NYSE:HEXO) was one of the bigger gainers in the marijuana news today. HEXO stock jumped five percent in early morning trading and is up about seven percent over the past five days.

HEXO stock has long been itching for a comeback after several weeks of downturns. I’ve long supported HEXO and believe that the marijuana penny stock is one of the best companies on the pot stock market. While it has been hit hard by the recent downturn, I predict that it will stage one of the more vigorous recoveries. Today’s strong gain shows that investors are ready to get back in on HEXO stock.

ACB Stock

Another strong performance on the pot stock market comes to us by way of Aurora Cannabis Inc (NYSE:ACB).

ACB stock climbed five percent in early morning trading, even if the company still finds itself down about five percent over the past week.

ACB stock hasn’t been receiving much focus as of late, primarily due to the marijuana correction stifling its recent performances.

All the same, there is still a lot of potential within Aurora, especially now that Canopy Growth Corp (NYSE:CGC) is likely going to decrease its growth spending, Aurora Cannabis has the opportunity to overtake it in size, something that it has long coveted.

Whether or not or chooses to go that path will be up to the company’s executives and board, but there is an opportunity to position itself as one of the top pot stocks of the future.

It may also choose to pursue profits now which, as we’ve seen today, can also be a very winning play.

APHA, HEXO and ACB Stock Performances

The performances of APHA stock (black line), HEXO stock (blue line) and ABC stock (red line) over the past week are seen on the chart below:

Chart courtesy of StockCharts.com

Analyst Take

The marijuana news today is the best we’ve had in a long while.

With APHA stock showing profitability, we’re seeing huge gains across the board. The pot stock market is surging and investors are seeing their confidence renewed.

I expect to see many weed companies scrambling to increase profitability in the coming quarters following today’s massive success, which could result in a number of big gains for shares in the coming months.