Marijuana News Today: Warren Buffett, Bill Gates on Pot Stocks

Marijuana News Today: Warren Buffet, Bill Gates on Pot Stocks
iStock.com/OlyaSolodenko

Marijuana News Today

The marijuana news today is not all that positive on the pot stock market, but several billionaire investors and business luminaries are keen on weed.

This isn’t exactly news per se, as billionaire support—or lack thereof—hasn’t changed much in recent times. However, there’s a actually several billionaire voices on marijuana, making it a worthwhile topic to revisit, especially now that marijuana is in a rut. (Source: “Marijuana: What Do Buffett and the Richest Americans Think?,” Market Realist, August 22, 2019.)

While the pot stock market is plummeting, it’s worth noting that many of the top minds of our time see potential for the industry long-term.

One such figure is Bill Gates. The tech visionary has been supportive of marijuana through a number of initiatives and investments. While that doesn’t guarantee that marijuana is going to be a long-term success, Gates isn’t known for being foolish. The man’s word has weight, not to mention that a person of his stature, with his financial resources and political influence, is a good person to have in one’s corner.

Advertisement

Another billionaire personality that has been a little less positive on the marijuana sector is Warren Buffett. While Buffett hasn’t gone as far as to come out against marijuana, he did warn The Coca Cola Co (NYSE:KO) about entering the marijuana business, as this would damage the company’s wholesome image. Ultimately, despite rumors, Coca-Cola never did enter the marijuana sector.

That said, I think I have to disagree with Buffett on this one. Far be it from me to tell the “Oracle of Omaha” how to do his business, but I believe that marijuana is going to be as wholesome as a glass of cold beer in a few years’ time.

It won’t take long after legalization that the drug loses its stigma and becomes just another product. Alcohol, after all, quickly went from prohibition to regaining its place as a household staple within a few years. The same could very well happen for marijuana.

So we have a couple of diverging opinions on marijuana among these two billionaires (although it’s worth stating that Buffett has never come out against pot, just against Coke entering the marijuana sector).

All in all, however, there’s little evidence that the marijuana industry is going to be a flop and a lot more supporting the idea that this is an emerging industry looking to make huge gains over the next few years as legalization spreads.

ACB Stock

Let’s start with the good(ish) performances in the marijuana news today, because we have another pretty brutal showing for the pot industry.

After Monday was a virtual bloodbath, pot stocks were climbing during the middle of the week, but as we near the end it appears that shares are once again falling pretty heavily all around.

One company that has been able to skate through the week fairly unscathed, however, is Aurora Cannabis Inc (NYSE:ACB).

ACB stock lost a point in early morning trading today and is only down about two percent over the past five days. Considering just how much its competitors are getting hammered, that’s not a bad performance at all.

We haven’t covered Aurora Cannabis stock much of late, primarily because there hasn’t been too much of note surrounding it.

The company has been an under-the-radar operator for a few months now, neither stealing headlines nor sinking under the weight of the marijuana correction. All that points towards Aurora Cannabis Inc being a fairly solid option in these tumultuous times.

ACB stock used to be among my top pot stock picks and has done well for my readers over the years. Right now it’s hardly the most exciting share, but should still net investors value as time goes on.

CTST Stock

If you were bored reading about steady Aurora Cannabis, CannTrust Holdings Inc (NYSE:CTST) has been anything but boring.

The company initially soared to start 2019, but has now absolutely collapsed following Health Canada’s inspection of its production facilities and subsequent suspension of the company’s operations. (Source: “CannTrust Statement Regarding Health Canada Audit,” CannTrust Holdings Inc, July 8, 2019.)

CTST stock has collapsed an additional eight percent in early morning trading and is down 13% over the past five days.

While there was a small spike in value earlier in the month, overall CannTrust stock looks to be about as weak a marijuana stock as I can see in the industry right now.

The company simply has too steep a hill to climb. This is very different from, say, the problems that plagued Aphria Inc (NYSE:APHA) for many months; I always saw the potential for a rebound in APHA stock, and that more or less came to pass.

CTST stock, however, looks to me like a dead fish as this point. It’s only hope is that a bigger fish can gobble it up for a decent price and hopefully score shareholders a boost.

TLRY Stock

Another company that has dropped severely to start the day is Tilray Inc (NASDAQ:TLRY).

TLRY stock fell by eight percent in early morning trading. Tilray stock is down 16% over the past five days.

As I’ve said many times, it will likely hold around the $30.00 mark, so I suspect another rise in the company’s future following today’s drop. Still, Tilray stock is very volatile right now.

It’s a shame, too, as the company recently signed a supply agreement with Germany, a strong deal that would expand the company’s international operations—something I think will factor heavily into the future success of pot stocks. (Source: “Tilray signs first deal to supply pot to Europe out of new Portugal facility,” MarketWatch, August 21, 2019.)

Still, with the marijuana correction now in full effect, it’s hard to recommend TLRY stock and its volatility, even with strong deals being made.

ACB, CTST, and TLRY Stock Performances

The performances of ACB stock (black line), CTST 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

Times are no doubt tough in the marijuana industry right now. The marijuana news today shows exactly why.

While billionaire investors may be supportive of the industry long-term, the short-term is bleak. The overall market pullback we’re seeing due to recession fears and trade wars is hitting pot stocks hard.

Investors shouldn’t panic: these companies are just as strong as they were pre-recession fears, but they’ll have to weather the storm before they can return to their winning ways.