Marijuana News Today
The marijuana news today features the usual suspect Tilray Inc (NASDAQ:TLRY), with TLRY stock up big in early pre-market trading, Meanwhile, a new analyst note has the cannabis-infused beverage business ballooning to more than $600.0 million in the U.S. market over the next four years.
Canaccord Genuity Group Inc (OTCMKTS:CCORF, TSE:CF) estimates that revenue from cannabis-infused beverages could double that of other cannabis products, capturing 20% of the marijuana edibles market by 2022. (Source: “The market for marijuana-infused beverages could explode to $600 million in the next four years,” Business Insider, last accessed October 1, 2018.)
The note projects a $260.0-million market for cannabidiol (CBD) beverages by 2022, while THC-infused beverages will reign over a $340.0-million market.
“While these trends represent a significant opportunity for US cannabis companies, they have not gone unnoticed by large mainstream beverage players looking to inject growth into their product portfolio,” wrote Canaccord’s Bobby Burleson and Jonathan DeCourcey.
The note mentions one of the more recent trends in the marijuana industry: wellness drinks derived from CBD.
What This Means for Marijuana Stocks
The long-term potential of the marijuana industry has never been in doubt, but the numbers in the marijuana news today are more promising than ever.
In case you ever wondered why Big Alcohol was so interested in investing in the marijuana industry, Canaccord’s analyst note is a pretty clear indication of what alcohol companies are looking to gain from the pot business.
The dilemma for Big Alcohol and even soda companies like The Coca-Cola Co (NYSE:KO) is that the opportunity cost they’d pay by not getting into the marijuana market is simply too high.
We’ve seen alcohol and soda sales dip in recent years, and that fall is only exacerbated by the introduction of legal marijuana into a market. After all, there’s only so much money that each person has to spend on recreational substances. Therefore, it’s inevitable that marijuana and alcohol will be competitors.
Alcohol companies, looking to nip this problem in the bud, have sought out ways they could partner with the pot sector rather than fight it.
That has led to cannabis-infused beverages. This subsector of the marijuana industry is rapidly growing, and it continues to be one of the most exciting developments in the marijuana industry.
Not to mention that the potential of this product is partly responsible for the massive investments we’re seeing from Big Alcohol, including the one made by Constellation Brands, Inc. (NYSE:STZ) in August that sent the entire cannabis stock market on a massive run.
Add all that to the rapidly developing interest in CBD oil and its potential restorative effects (you can extract CBD with only trace amounts of THC, essentially creating a high-free cannabis-infused drink), and you have an industry that is oozing with potential.
For all these reasons and more, we’re seeing marijuana stocks continue to rise at exponential rates, and we’ll likely see that continue for some time.
The marijuana news today, aside from featuring lofty projections for the future, has some goodies for the present.
Tilray stock is once again on the rise, climbing by nearly 10% to open the day.
While this is in keeping with Tilray stock’s day-to-day swings, the company scored a positive headline when it revealed that its subsidiary High Park Farms received a sales license from Health Canada.
The license will allow High Park Farms to “supply and sell finished cannabis products within the ACMPR as well as sales in anticipation of the launch of the adult-use market in Canada upon its legalization on October 17, 2018.” (Source: “High Park Farms Receives Cannabis Sales License from Health Canada,” Business Wire, October 1, 2018.)
“This license marks a milestone for High Park as we aim to solidify our position as a leading provider of adult-use cannabis in Canada,” said Adine Carter, High Park’s chief marketing officer.
“We look forward to supplying provinces and territories with a variety of world-class cannabis brands and products in anticipation of the launch of the adult-use market on October 17, 2018.”
The aforementioned marijuana legalization date in Canada will likely lead to a number of strong showings in the coming weeks for Tilray stock.
As is typically the case, whichever way Tilray stock goes, Cronos Group Inc (NASDAQ:CRON) is not far behind.
CRON stock and TLRY stock sharing the same stock market, the Nasdaq, has often led to the two stocks rising and falling in tandem.
And that makes sense. After all, when TLRY stock receives its share boost, investors are often looking for another investment opportunity on major listings, and the only other options are CRON stock and Canopy Growth Corp (NYSE:CGC).
If you narrow that focus down to just the Nasdaq, well, CRON stock is the happy beneficiary of your lack of choices.
CRON stock was up about six percent in early-morning trading today and I anticipate that, as long as Tilray stock continues to climb, CRON stock will follow—if at a slower pace.
TLRY & CRON Stock Performances
TLRY stock (black line) and CRON stock (blue line) were surging this morning, as seen in the chart below.
Chart courtesy of StockCharts.com
The marijuana news today is resoundingly positive on all fronts.
The most recent projections for the cannabis-infused beverage business is going to encourage more Big Alcohol partnerships within the marijuana industry—and will therefore spur massive growth among pot stocks.
Should other companies like Coca-Cola be similarly impressed by the numbers and be swayed to jump into the marijuana business, expect big things to come for pot stocks.
On the marijuana stock market, we have been seeing an industry-wide rally, with most stocks gaining several percentage points to start the day.
Of course, Tilray stock only operates in extremes, and was up big in early-morning trading to start this week, while CRON stock has been following behind.