Marijuana News Today: Pot Stocks Stage Huge Rally

Marijuana News Today
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Marijuana News Today

The marijuana news today has us celebrating yet another triumph on the pot stock market as many shares see a strong increase in both early-morning trading and over the past week.

While the end of 2018 saw a dramatic fall in share prices only to have these companies rebound with strong gains as we reached the new year, 2019 has welcomed a full-blown marijuana market rally.

We have been seeing companies earn double-digit gains in the past few days, starting the year with a bang.

So what’s driving these great numbers?

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The first factor is the rebound effect. That is to say that since marijuana stocks were on a pretty steep downturn post-legalization for several weeks, they fell to bargain prices and valuations, with investors jumping back in at the low point, reinvigorating the industry.

The other factor seems to be the recovery of the economy. While, at times, markets across the U.S. took massive hits (sparking fears of an entire market downturn), those markets have recovered. Therefore, worries of an impending recession have been put to rest—for now.

It is also looking like 2019 is shaping up to be one of the best years for marijuana stocks yet.

This is primarily due to the shifting attitudes in U.S. politics as well as among the business set.

Politically, a new presidential candidate is up for selection by the Democratic Party, and there is a better-than-zero chance that said candidate will support marijuana reform.

Should several candidates come out with pot reform as a feature of their platform, expect to see marijuana stocks rise as excitement grows surrounding the U.S. marijuana market.

Among the business class, we’re seeing more firms and analysts open their arms for marijuana companies, something that was long overdue. The result is that marijuana stocks are gaining more access to capital they can then use to expand both their capacity and international presence.

Combined, these circumstances make 2019 a year ripe with promise for the pot industry.

CGC Stock

One of the top performers yesterday keeps things going strong with another great gain in the marijuana news today. Canopy Growth Corp (NYSE:CGC) jolted nearly seven percent upward in early-morning trading and finds itself up 28% over the past five days.

CGC stock’s impressive rally is being helped along by the recent announcement that two of Canada’s biggest banks will be loaning $80.0 million to PharmHouse Inc. (Source: “BMO, CIBC provide $80-million loan to Canopy Growth-affiliated pot company PharmHouse,” Financial Post, January 8, 2019.)

That company is partly owned by Canopy Rivers Inc (OTCMKTS:CNPOF, CVE:RIV), the investment arm of Canopy Growth.

The move will inject a healthy dose of capital into Canopy Growth, while also showing that the company has the ability to cozy up to banks, which, for many years, have been reluctant to get involved with marijuana due to its stigma and its semi-illegal status in the U.S.

These loans could be a response to the poor performance of Constellation Brands, Inc. (NYSE:STZ). The alcohol maker has invested billions of dollars  into Canopy Growth and has since seen its shares plummet since its latest quarterly report was released.

But despite Constellation’s fall, CGC stock remains unaffected. In fact, it has risen markedly over the past few days while STZ stock has floundered.

ACB Stock

Another top performer in the marijuana news today is Aurora Cannabis Inc (NYSE:ACB).

ACB stock leaped over four percent in early-morning trading today, while also marking a 12% gain over the past five days.

While ACB stock hasn’t been able to replicate the powerful gains of its similarly sized competitors, it is still trucking along at a good pace in an attempt to turn around what was otherwise a disastrous 2018.

Several large marijuana companies came out of 2018 with strong gains, but ACB stock fell dramatically and was unable to recover throughout the year.

While ACB stock hoped to change its fortunes via acquisitions, ultimately the company made a lot of investments but has yet to see great returns.

That may all change as Aurora is one of the few large marijuana companies to not have nailed a major partnership deal. Expect to see Aurora on the hunt for a big investment from an outside party in 2019. Should that come to pass, ACB stock will soar.

TLRY Stock

Rounding out today’s top performers is Tilray Inc (NASDAQ:TLRY).

Up about six percent earlier this morning, TLRY stock has seen a massive growth spurt to start 2019, up 21% over the past five days.

The stock continues to be one of the more intriguing plays in the market due to its demonstrated ability to sustain huge growth in short periods.

Another factor going in Tilray stock’s favor is that shorting the company has now become prohibitively expensive.

Shorters are looking at paying as much as 900% for the privilege to hold a TLRY share, hoping that the company will implode. (Source: “Want to Short Tilray? Get Ready to Pay 900% for the Privilege,” Bloomberg, January 9, 2019.)

Consider how things have fared for shorters so far (barring the early massive surge and market correction), this is a hard move to sell and will likely end in disaster for many TLRY stock haters.

At the moment, Tilray stock appears to be one of the stronger marijuana securities. The high price to short speaks to interest in that area, but ultimately, it appears that they may be acting on misguided forecasts.

CGC, ACB, and TLRY Stock Performances

The performances of CGC stock (black line), ACB stock (blue line), and TLRY stock (red line) over the past week are seen on the chart below.

Chart courtesy of StockCharts.com

Analyst Take

The marijuana news today once again shows us a burgeoning marijuana stock market to start the year.

With impressive gains from three of the world’s top pot stocks, we’re seeing a rebound that is setting the industry on the right path to start 2019.

Factor in all the potential for huge gains in 2019, and you have a year that is shaping up to be very positive for marijuana.