Marijuana News Today
The marijuana news today is bittersweet. We’re finally seeing progress at the U.S. federal level when it comes to researching the potentially beneficial effects of medical marijuana, but that research is still being stunted by outmoded ideas about pot.
First, the good part of the story.
The U.S. government will spend $3.0 million on research to determine whether cannabis can effectively relieve pain. (Source: “U.S. to spend $3 million to find out if CBD can relieve pain,” NBC News, September 19, 2019.)
This could lead to a major breakthrough if the study proves successful. After all, pain medication is big business and worth billions of dollars. The over-the-counter pain medication market is worth over $18.0 billion. (Source: “OTC Pain Medication Market to Cross US$ 19 Billion in 2019 – Future Market Insights,” Reuters, March 6, 2019.)
If the marijuana industry could somehow find a way to tap into the pain medication market, investors would be able to gain exposure to this multi-billion-dollar market while offering an alluring alternative to the current products available.
“The science is lagging behind the public use and interest. We’re doing our best to catch up here,” said Dr. David Shurtleff, deputy director of the National Center for Complementary and Integrative Health. (Source: Ibid.)
But now here’s the sticking point: the newly announced research project bars the scientists from investigating tetrahydrocannabinol (THC) as a potential treatment for pain.
THC is the chemical compound in marijuana that induces a high. Instead, the researchers have to focus all their efforts on whether cannabidiol (CBD) can be appropriately used as a treatment for pain.
Now, I’m no chemist, but shutting out THC as a potential pain remedy seems a bit obtuse to me, especially when you consider the reasoning. Shurtleff did say that THC has been investigated extensively, but he also said that its potential for abuse meant that it was being sidelined here.
Potential for abuse. Does Shurtleff fail to see the irony here? Opioids are now some of the most devastating drugs you can get your hands on, causing a worldwide pandemic with many people falling prey to addiction. And opioids are 100% legal for a doctor to prescribe.
Whatever the negative impacts of marijuana, they pale in comparison to the havoc that has been wreaked by opioids. To shut off what could be an elegant solution to the country’s drug addiction struggle seems premature at best, and downright irresponsible at worst.
Anger aside, there are positive takeaways from a marijuana investor’s standpoint.
You have the increasing willingness of the U.S. federal government to explore the future of marijuana as treatment for pain. Considering this is a massive industry ripe for innovation and improvement, marijuana stocks could be heavily bolstered by an entrance into the pain medication game.
You also have yet another signal that marijuana is becoming more accepted at the federal level. That marks a major cultural shift in the U.S., where up to this point marijuana has largely been seen as an untouchable substance by the country’s top level of government.
While we’d like to see more comprehensive research, ultimately this is good news for marijuana stocks and, if these tests prove successful, we could see an explosion in the medical marijuana market.
In the stock market, the marijuana news today has been far more straightforward. Things have not been going great for pot stocks this week, but Friday is at least finishing strong.
Aphria Inc (NYSE:APHA) is one company that saw stock-price losses for much of this week, but it is on the upswing as we head into the weekend. Aphria stock climbed nearly two percent in early-morning trading today but is down by more than eight percent over the past five days.
APHA stock began to see a clawback of some of the gains it scored when the company announced it would be the first major legal marijuana company to register a profit.
While the stock’s high point following that announcement has come and gone, that news still helped solidify a fair bit of gains for Aphria stock.
The question now is how will the company generate more stock gains moving forward? More profit would be a tidy-enough answer. If Aphria could score another positive quarterly report, that would go a long way toward sustaining APHA stock.
On the flip side, the company is still also without a major partner or a recent acquisition. Both could help drive its share prices up if executed correctly.
While I’m still lukewarm on Aphria stock stock even with its price gains, one pot stock I’m very positive about is Hexo Corp (NYSE:HEXO).
Sure, the marijuana penny stock has seen its fair share of bumps in recent weeks, as have many other marijuana companies. But I believe HEXO stock has a very strong shot at becoming a major success story during the recovery period.
The stock climbed by over six percent in early-morning trading today and is only down about two percent over the past five days, a much better outcome than for many of its competitors.
HEXO stock still has a lot of qualities I look for in a marijuana company: strong fundamentals, supply contracts, large production capacity, and robust partnerships. Couple that with one of the few consensus undervalued companies in the marijuana industry and it’s a recipe for success.
From best to worst, the last company on my list today is CannTrust Holdings Inc (NYSE:CTST). CannTrust stock gained over two percent today, but the stock has been on a downward spiral ever since it had its license suspended by Health Canada. Over the past five days, CTST stock has dropped by over 13%.
CannTrust Holdings was subjected to an audit by Health Canada that found it to be growing crops in unlicensed rooms. That launched an ever-larger investigation into the company by the regulator, leading to the company’s eventual license suspension.
This is really a worst-case scenario for any marijuana producer, and I anticipate that it will be a long and hard road ahead for CTST stock. Sure, there will be spikes here and there due to day trading, but the long-term health of CannTrust stock is very much in doubt.
APHA, CTST, and HEXO Stock Performances
The performances of APHA stock (black line), CTST stock (blue line) and HEXO stock (red line) over the past week are seen in the chart below:
Chart courtesy of StockCharts.com
The marijuana news today once again shows progress being made at the U.S. federal level when it comes to marijuana, but it also shows that old-thought ideas are still prevalent among the country’s top researchers and policymakers.
Still, the opportunity for cannabis to enter the pain medication market could be one of the largest events to take place in the legal marijuana industry.