Marijuana News Today: Canada Dominates Pot
The marijuana news today adds further credence to something that anyone paying attention already knew: Canada is dominating the pot business.
A new study from Washington, D.C.-based New Frontier Data Group, Inc. reveals that the Canadian marijuana companies are uniquely suited to take advantage, not only of the rush toward legalization in the Great White North, but also as suppliers of the world marijuana trade.
“Canadian (companies) are allowed to export abroad, making them some of the first companies in the world to sign international cannabis trade deals,” said the report. (Source: “Canadian companies dominate global marijuana trade, says report,” Ottawa Citizen, May 8, 2018.)
The report cites the fact that many Canadian marijuana companies are exporting their goods to countries around the world, from Australia to Germany to Jamaica.
It also states that about CA$1.2 billion was invested in the Canadian marijuana industry within the first five weeks of 2018. (Source: Ibid.)
That figure is made all the more impressive when you consider that the industry has been caught in a downturn during that time.
Even with things going downhill for marijuana stocks in 2018, the industry was able to foster huge sums of investments, speaking to the strength and interest in Canadian pot stocks.
But the report is hardly surprising to anyone who has been paying attention.
Due to murky laws regarding marijuana in the U.S. (legalized in some form at the state level in the majority of the country but federally banned) and the slow legal proceedings in European countries, Canada has stepped up to take control of the marijuana market.
Bolstered by a government that promised to legalize recreational marijuana in 2018 and you have the perfect foundations for a marijuana empire.
The strength of the Canadian marijuana sector is not that the country specifically represents a huge market (although it will bring in billions of dollars of sales when legalization hits).
Rather, the country will serve as a base of operations for weed producers. Canada will be a safe haven from which companies can confidently produce marijuana and strike export deals across the world.
These companies are going to have a massive head start compared to others that enter the market in the years ahead, due to the well-established infrastructure and years of government approval.
With all that in place, Canadian pot stocks are looking to not only dominate the marijuana market today, but also the market of tomorrow.
There’s little in the way of true rivals for the country’s pot stocks. And looking to the horizon, there doesn’t appear to be any country even close to Canada’s progress on the drug.
As the report states, there’s little to challenge Canadian dominance in the marijuana sector, and that puts many Canadian pot companies in an enviable position for the long term.
Canopy Growth Stock
Speaking of dominant Canadian pot stocks, Canopy Growth Corp (OTCMKTS:TWMJF, TSE:WEED) continues to see muted movement in May.
Unlike April, which had a good amount of volatile swings both up and down, May has so far proven to be a quiet month for the heavy hitter of the marijuana industry.
The company has seen virtually no movement in its stock price over the past five days.
Chart courtesy of StockCharts.com
This may not be such a bad thing, however.
With summer likely to bring about a marijuana industry resurgence, being able to break out of the pullback is good news. It allows long-term investors to hold their shares without feeling pressure to sell them due to decreasing value.
I expect May to proceed along in this manner, with July and August becoming big months for the marijuana industry.
Similar to Canopy stock, Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB) hasn’t seen much movement in Aurora stock over the past few days.
But where Aurora stock differs is that the company has been making big waves lately, mainly due to the rumors that it is looking to acquire MedReleaf Corp (OTCMKTS:MEDFF, TSE:LEAF).
While both companies confirmed that talks were taking place, neither were willing to provide details on just how serious or far along those talks were.
MedReleaf said that it engages “from time to time” in discussions with other industry players, including Aurora Cannabis, “regarding various alternatives.” (Source: “MedReleaf, Aurora confirm discussions but say no agreement,” Financial Post, May 3, 2018.)
“The company has not entered into an agreement to effect any particular transaction, and there can be no assurance that such discussions will result in any such agreement,” said MedReleaf.
Aurora released a similarly cagey statement.
“The company does confirm that it engages in discussions with industry participants from time to time, including MedReleaf,” said Aurora. “At this time the company confirms there is no agreement, understanding or arrangement with respect to any transaction with MedReleaf.” (Source: Ibid.)
The move would make massive waves in the marijuana industry and we would expect to see heavy stock movement should it go through. MedReleaf stock will likely be the main beneficiary, but, if the deal closes smoothly and for the right price, Aurora stock is also in store for a nice bump.
While those previous two stocks have been unexciting this month, Aphria Inc (OTCMKTS:APHQF, TSE:APH) is looking to be the darling of May.
The company is up 15% over the past five days. The surge is largely brought on by what was otherwise a disastrous 2018 for the company, lowering the share price down to an acceptable level for investors.
With the price now hitting a level that investors are apparently comfortable with, Aphria stock has been surging and will likely be one of the better performers in May, unless investor sentiment once more turns against the company.
The report coming out of the U.S. in the marijuana news today only reaffirms the dominance of Canadian pot stocks.
They are the only real plays in the marijuana market right now, and we’ve seen immense growth from them over the past few years.
What the report states—and something that all marijuana investors ought to be aware of—is that there is long-term viability to these stocks. They are likely to be the dominant pot companies for years to come, due to their head start.
While more rivals will certainly crop up as time goes on, Canadian pot stocks are the kings of the industry.