Marijuana News Today: Recreational Marijuana Beginning to Ship in Canada, Why Tilray Stock Is Plummeting

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iStock.com/OlegMalyshev

Marijuana News Today

Amid the massive price surge we’ve seen on the pot stock market lately, it’s easy to forget that the monumental marijuana legalization in Canada is just around the corner.

The marijuana news today is here to remind us that this game-changing event is now less than 30 days away as marijuana companies have begun shipping pot around Canada to meet the demand.

One such company, Aphria Inc (OTCMKTS:APHQF, TSE:APH) has begun shipping its supply of marijuana across the country to all the many provinces it has signed supply agreements with.

Many other marijuana companies have followed suit, shipping pot to retailers and provinces in anticipation of the legalization date, which will likely spark a huge increase in demand for pot.

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After all, you have to imagine that there will be something of a celebration by pot enthusiasts on October 17, while first-timers and newcomers will likely trickle in over time.

Aphria, meanwhile, has the capacity to fill much of that demand. The company has about 5,600 kilograms of finished marijuana inventory on hand and a weekly production of about 660 kilograms. It is planning to increase that output exponentially when it completes the expansion to its facilities, jumping to 5,000 kilograms a week.

This massive surge in marijuana production is certainly going to be needed as the demand for marijuana increases across Canada once legalization takes effect.

What This Means for Marijuana Stocks

Aphria is not alone in growing its production capacity and gearing up for legal pot to take effect in Canada. Many other marijuana stocks are aggressively expanding and scoring supply agreements in anticipation of October 17.

While the pot stock market is still on a high following massive investments and reports that outside industries are looking to buy into the pot market, the next major event that’s guaranteed to affect the pot industry is going to be marijuana legalization.

While a lot could happen between now and October 17, ultimately we’re going to see a ton of movement among marijuana stocks as we build toward that day.

In fact, I expect to see a massive surge among marijuana stock prices as hype begins to take hold once more, pushing prices higher and higher as we near the legalization date.

If there’s one thing that the marijuana stock market loves, it is excitement and hype. The culmination of that fervor on October 17 will lead to growth among many of the most popular tickers. While I don’t think that these gains will be sustainable long-term, this stock boost will still put a smile on many pot bulls’ faces.

Marijuana News Today: Why Tilray Stock Is Dropping

But of course, we couldn’t cover the marijuana news today without mentioning Tilray Inc (NASDAQ:TLRY). Tilray stock has dominated the conversation about pot stocks this week, and for good reason.

The company has jumped by dozens of percentage points over a few short days, but it looks like that correction I’ve long warned about is finally hitting: TLRY stock is down 26% in early-morning trading, representing one of the biggest falls in the stock’s history.

This downturn was inevitable, as Tilray stock kept growing at an unsustainable pace. There was always going to be some form of pushback from the market and we’re seeing that take hold today. In fact, over the past two days, the company has seen its total gains in the past five days drop from nearly 100% to about 30%.

TLRY stock is plummeting today; does that mean that the Tilray stock rush is over? Not quite.

The company has faced dramatic pullbacks before. Typically, these do not last long and only take hold for a few days.

At the same time, however, there is a correction in store. You simply cannot grow as fast and as high as TLRY stock has without the market eventually growing a little concerned at the rapid pace.

As such, we’ll have to see how the market responds next week to see if this correction will give way to another surge, or if it will be a more sustained fall.

CRON Stock

Closely tied to Tilray stock this week, Cronos Group Inc (NASDAQ:CRON) similarly finds itself down in early-morning trading.

CRON stock has fallen about nine percent to start the day, mirroring TLRY stock’s decline. This week, the two marijuana stocks rise in tandem, albeit with Cronos a good way behind Tilray.

The reason for these stocks being so closely tied together is the result of their presence on the Nasdaq. While Canopy Growth Corp (NYSE:CGC) is the only other marijuana stock on a major U.S. listing, Cronos and Tilray are the only two pure-play marijuana tickers on the famous exchange.

As such, they are subject to investor sentiment unique to that exchange, while other pot stocks are typically affected by wider industry trends and events.

TLRY & CRON Stock Performances

On the chart below are the recent performances of Tilray stock (black line) and Cronos stock (blue line):

Chart courtesy of StockCharts.com

Analyst Take

The marijuana news today is a reminder that the marijuana industry has only a few short weeks before the biggest event in its history takes place—Canadian marijuana legalization.

While we’re seeing market movement run independent of that fact, as we approach October 17, expect to see the industry begin to react more in line with that momentous occasion, likely leading to a burst in stock prices.