Marijuana News Today: Pot Stocks Erratic to End the Week

Marijuana News Today

Marijuana News Today

It’s a wild ride in the marijuana news today as the pot stock market is all over the place. Meanwhile, New Jersey marijuana legalization is taking a detour, it appears, with the issue likely going to be in the hands of the people via a referendum.

I’ve been writing a lot this year on what it means that more and more states are initiating marijuana legalization via the traditional legislative process instead of punting the question to voters in the form of a referendum.

New Jersey, however, is finding that its marijuana legalization bill is harder to pass than anticipated, despite strong support from the state’s governor. (Source: “N.J.’s marijuana bill nearly ‘dead.’ That means you may get to vote on making weed legal.,”, May 10, 2019.)

The result, it seems, is that the New Jersey legislature will revert to holding a referendum about cannabis legalization instead of continuing with its potentially costly political fight to get the current bill passed.


This isn’t great news, but it isn’t terrible either. Ultimately, we want the process to be handled in the legislatures across the U.S. for one simple reason: it sets a precedent for the federal government to do the same.

By showing that elected officials can push through marijuana legislation without facing too many political repercussions, the U.S. House and Senate may finally find the confidence to pass pot reform that the majority of the country supports.

By having voters have a direct say on the issue of marijuana, it makes the issue seem like it’s still a political third rail that is best diverted away from the normal legislative channels.

Not to mention that referendums are slow. The vote itself has to be set up, usually to coincide with an election (often senatorial or presidential) and then, following the results, a bill still has to be drafted and passed in state congress. This adds months, even years to the legalization process.

It’s simply a worse way to handle pot reform and, in a way, unusual. America is a representative democracy, after all, where lawmakers are elected to reflect the will of their constituents.

As seen in poll after poll, U.S. voters are clear on what they want: marijuana reform. The punt back to the voters in order to avoid political consequences is weak and unbecoming of the elected lawmakers.

Still, at the end of the day, legalization is legalization. If New Jersey does legalize marijuana, then that is a whole new market that pot makers can expand into. Not to mention that it also adds to the mounting pressure facing the federal government to legalize pot.

The situation in New Jersey is not ideal, but it’s one that will ultimately be positive for marijuana stocks in the long run.

CRON Stock

The marijuana news today as it pertains to the pot stock market is, shall we say, uneven. We have seen marijuana stocks on big swings up and down, while others have showed almost no movement at all.

The biggest winner to start the day was Cronos Group Inc (NASDAQ:CRON). CRON stock was up over six percent in early-morning trading, but is down about 10% over the past five days.

Much of this is a result of the company’s most recent quarterly report, which was released yesterday.

Initially, the market was rough, prompting a steep decline in the Cronos stock price. This was a result of the company claiming that its adjusted earnings will likely decline over the course of 2019.

“As we continue to invest in our business, our brands and R&D initiatives, our adjusted Ebitda will likely decline over 2019 but position the company for accelerated growth in 2020,” said Chief Financial Officer Jerry Barbato. (Source: “Pot producer Cronos slides after forecasting earnings to fall through 2019,” BNN Bloomberg, May 9, 2019.)

This caused a steep decline in the company’s share prices, which prompted an opportunity for investors this morning.

Cronos reported first-quarter revenue of CA$6.5 million. That was good for a 15% gain from the last quarter, but it missed the average analyst estimate of CA$7.0 million.

CEO Mike Gorenstein also voiced concerns in the earnings call, focusing on the need for balance between supplying the market today and ramping up for when edibles and other products become legal in Canada in October.

“I think right now it’s certainly a balance between selling everything you have and making sure that you can load for launch,” said Gorenstein. “Vapes, the category is very important to us, and making sure we’re able to launch with significant inventory is something that we’re continuing to prioritize.” (Source: Ibid.)

While CRON stock is likely in for a period of declines due to its meteoric rise in early 2019, I still see big value contained within this stock.

HEXO Stock

Another stock that’s gone on a wild ride to start the day is Hexo Corp (NYSEAMERICAN:HEXO). HEXO stock fell by three percent this morning and has dropped by about eight percent over the past five days.

While this is in keeping with the general downturn we’ve seen in the marijuana industry in April and May, HEXO finds itself in a rough place today relative to other companies.

The big news today from Hexo Corp is that its deal to acquire Newstrike Brands Ltd (OTCMKTS:NWKRF, CVE:HIP) was approved by the Canadian Competition Bureau. The deal will see Hexo’s production capacity expand while putting the company firmly in eight Canadian provinces. (Source: “HEXO Corp to acquire Newstrike Brands Ltd.,” Globe Newswire, March 13, 2019.)

I don’t see how the deal would hurt HEXO stock unless investors were hoping that it would fall apart.

Regardless, today’s setback is minor and I believe that HEXO shares are still poised for big gains in 2019. While CRON stock is likely to see a readjustment period after its massive surge in March, HEXO is much more likely to see strong gains in the coming months; the company still is undervalued.

CRON and HEXO Stock Performances

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

Chart courtesy of

Analyst Take

The marijuana news today is tricky, with a lot of ups and downs across the market.

But the overall picture of the pot stock market is still a positive one. CRON stock bounced back from big losses yesterday and New Jersey is still likely on track for marijuana legalization (even if it takes longer than we first thought).