Marijuana News Today
In the marijuana news today, we have another small step toward marijuana legalization in the United States. Only this time it’s via laws on the federal level, rather than a piecemeal legislative gain on the state level.
The 2018 Farm Bill is expected to fully differentiate between hemp, a cannabis plant that is bred to have little to no tetrahydrocannabinol (THC), and a typical cannabis plant that can be used to make the drug marijuana. THC is the substance in marijuana that gets one high.
This may be the news that the cannabidiol (CBD) oil industry needs in the U.S.
Analysts estimate that the market for hemp-derived CBD in the U.S.—including capsules, tinctures, pet treats, and vaporizers—will add up to more than $591.0 million by the end of this year. (Source: “Proposed hemp regulations continue the racist legacy of the US war on drugs,” Quartz, November 28, 2018.)
That figure is set to rise to more than $20.0 billion by 2022, making CBD one of the most exciting segments of the marijuana sector.
The 2018 Farm Bill is even being supported by Senate majority leader Mitch McConnell, a Republican. “If there’s a Farm Bill, [the hemp provision] will be in there. I guarantee you that,” said McConnell. (Source: Ibid.)
Both sides of the aisle are in favor of reclassifying hemp as a non-dangerous substance and allowing the U.S. to open up to its first taste of legal, federally-regulated cannabis.
This follows the U.S. government’s approval earlier this year of marijuana medicines that are high in CBD and low in THC. They were classified as legal for the first time since marijuana was designated as a Schedule I narcotic.
The result is that the U.S. is soon going to be officially “open for business” in regard to the cannabis industry.
No longer will companies have to wrestle with cannabis restrictions across states. The new federal law will allow CBD medicines, oils, extracts, drinks, and all manner of related products to hit the entire U.S. market.
This lays the foundations for a marijuana explosion in the U.S. and marks another triumph in the battle for total legalization in the country.
With politicians coming around to the idea of a legal pot industry, steps made in the hemp industry will no doubt further incentivize movement toward marijuana reform.
As for investors, hemp companies will likely begin cropping up on a national scale and allow investors to gain the strongest exposure yet to a U.S. cannabis market that truly extends across the nation.
The marijuana news today may be bright on the political side, but the pot stock market has seen yet another tumble.
After the strong market rally yesterday on the back of South Korea legalizing medicinal marijuana, the cannabis industry saw all those gains largely wiped out in early-morning trading today.
Tilray Inc (NASDAQ:TLRY) was hardly the biggest winner in yesterday’s jump, and today it fell about 3.5% in this morning.
Over the past five days, Tilray stock has dropped 2.5%, which actually makes it one of the better performers during the current market correction. While TLRY stock was unable to show considerable gains yesterday, falling behind most of its competitors, it remains one of the better plays.
Tilray has weathered the storm better than most, because of a combination of its presence on the Nasdaq and its status as the marijuana darling of 2018 due to its meteoric rise after its initial public offering (IPO).
While I imagine that Tilray stock will see losses during the market pullback, those losses are likely to be smaller than those of its rivals.
This stock remains an exciting pick due to its volatility. Whether volatility is for good or ill depends on one’s tolerance for risk. Safer picks certainly exist in the marijuana industry, but there is no denying the potential within TLRY stock.
In contrast to Tilray stock’s performance yesterday, Aphria Inc (NYSE:APHA) saw strong gains of around seven percent in early-morning trading yesterday. But now the company has seen its fortunes turning, with APHA stock down about five percent this morning and down 8.5% over the past five days.
I have long cautioned investors to not be swayed by small jumps in Aphria stock. For much of 2018, I had anticipated that it would see a strong rally after months of losses. I was wrong.
It now appears that APHA stock has an inability to register substantial, sustained gains.
While it is likely to see spikes here and there like we witnessed yesterday, for some time now I’ve been warning investors about this stock. I was proven right in that regard again today.
There are many better picks than Aphria stock, and investors ought to consider them first before jumping into what has been one of the most disappointing marijuana stocks of 2018.
TLRY and APHA Stock Performances
The TLRY stock (black line) and APHA stock (blue line) performances from the past week are seen on the chart below:
Chart courtesy of StockCharts.com
The U.S. is edging closer to unleashing a multi-billion-dollar economic beast that sleeps within its borders. The marijuana industry is a massive, untapped well of wealth and tax revenue.
The legalization of hemp crops federally will be a strong step toward awakening that beast, but we still have a ways to go.
Furthermore, the marijuana news today again shows that the cannabis industry is in need of a strong wave of exciting news in order to restore investor confidence and break the marijuana stock market correction. I have no doubt that this will happen; the only question is when.