Marijuana News Today: Vermont Recreational Marijuana Legalization Good News for Pot Stocks

marijuana news today 3 july
iStock.com/Vera Tikhonova

Marijuana News Today

In the marijuana news today, we have Vermont becoming the ninth state in the Union to legalize recreational marijuana, marking another step toward full pot reform in the nation.

The Vermont recreational marijuana legalization is noteworthy for a number of reasons, but perhaps the most important one for our purposes is that legalization was carried out by an act of state congress rather than a referendum vote.

In every other state where recreational marijuana has passed and in Washington D.C., the pro-pot bills were implemented only after a direct vote by citizens on the question of legalized pot. (Source: “Recreational marijuana now legal in Vermont as new law takes effect,” CBS News, July 2, 2018.)

What that boils down to is the state legislatures kicking the question back to the people in an effort to save face and eschew responsibility. After all, why battle for something that for some politicians is unpopular among their base but strongly supported in their state? It’s easier to push the proposal to a direct vote, wash your hands of the whole thing and simply carry out the will of the people.

Advertisement

In the Vermont case, however, we saw the elected officials step up and carry out the pot reform on their own, which is a huge step for marijuana advocates and shows just how far along the issue is in the American conscience.

Whereas the more politically expedient and safe method in the past was to kick the question back to the citizens, politicians are now finding themselves more able to push marijuana legislation through state congresses, marking a dramatic turn in public perception.

This is a huge progression for pro-marijuana bulls as it may pave the way for action to come about on the federal level.

We’ve already seen (and discussed at length in past articles) major political figures in the U.S. pushing for U.S. marijuana legalization—or at least dramatic reform.

This is an entirely new development in the American political scene, and weed stocks ought to be chomping at the bit considering the progress they’ve made.

Nearly all the Democratic front-runners for the presidency have come out in support of one form or another of marijuana reform. That is unheard of in American politics.

And now, on the state level in places like Vermont, you have politicians who have seen the writing on the wall and become emboldened by public support to the degree that they feel comfortable enough pushing pro-pot agendas and not fearing political backlash.

All in all, it’s a new day in the U.S. for marijuana legalization. It seems that each new addition of the marijuana news today only ever brings us one step closer to U.S. marijuana legalization.

And, of course, such a move would be a massive victory for marijuana stocks.

Marijuana stocks are primarily based out of Canada precisely due to the fact that the U.S. has a federal prohibition in place on weed. Should that be removed, we’d see institutional investors begin injecting capital much more readily.

We’d also see laws banning the transportation of the drug across state lines disappear. This would allow for larger corporations to form across the country without fear of a federal crackdown, leading to another mini-boom in the marijuana market.

Not to mention that established marijuana stocks would have easier access to one of the largest and richest markets in the world.

CGC Stock News

While last week was less-than-ideal for pot stocks, the marijuana news today is showing us some good signs.

First, it appears that marijuana stocks have largely recovered from last week’s precipitous drop.

Chart courtesy of StockCharts.com

Looking at Canopy Growth Corp (NYSE:CGC), often one of the best indicators of the strength of the market, we’re seeing a relatively neutral performance over the past week.

Obviously, “relatively neutral” is hardly going to get anyone’s blood racing with excitement, but considering how poorly Canopy Growth stock was faring the middle of last week, it’s an improvement.

CGC stock has taken a dip to start the day, however, and is down about three percent in early morning trading.

Still, the stock has recovered from its nadir last week, which saw it down over double-digits. So unless today is the start of another downturn, CGC stock is still in a favorable position.

As I predicted, last week appeared to be a mini-correction that is fading as fast as it came.

This was to be expected as stocks shot up with abandon on the back of the Canadian marijuana legalization date being announced.

With that push and pull behind us, however, I expect solid if unspectacular gains this week across the industry.

Aurora Cannabis Stock

While Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB) has yet to begin trading as I write this piece, it is up about three percent from Monday.

This puts Aurora Cannabis stock as among one of the better performers to start the week off.

It’s also worth noting that Aurora Cannabis stock was able to avoid the trough that CGC stock found itself in.

While both followed roughly the same trendlines, Aurora Cannabis stock had higher lows than Canopy Growth stock, and overall performed better compared to its competitor.

Aurora Cannabis stock also received its sales license from Health Canada for its Aurora Vie production facility in Quebec.

The facility is now in full commercial operation and is slated to produce about 4,000 kilograms of cannabis per year by October 2018—just in time for Canadian marijuana legalization. (Source: “Operational Update: Aurora Cannabis Receives Sales License for Vie Facility in Quebec; First Harvest at Aurora Sky,” Cision, July 3, 2018.)

This is very much in keeping with Aurora Cannabis stock’s plan to be among the most prolific producers of cannabis. The company has been highly aggressive in its acquisitions this year and receiving the go-ahead from Health Canada is critical to the company’s plan to be the largest producer, provider, and market share owner in the industry.

Aphria Stock News

Aphria Inc (OTCMKTS:APHQF, TSE:APH) continues to have a trying year.

Down about six percent from last week, the company was not able to turn it around to the degree that Aurora Cannabis stock and CGC stock were.

Of course, CGC stock is down again and we have yet to see the results this morning for Aurora, but all that aside, Aphria stock continues to be one of the bigger disappointments this year.

The company can simply not find a way to shake the funk that has dogged it in 2018.

While other companies have had periods of ups and downs, Aphria stock has really only been on the downturn save for a few strong weeks in May, which collapsed by the month’s end.

Aphria stock has a long way to go before I’m back on board with it.

Analyst Take

The marijuana news today shows yet another important step toward full U.S. marijuana legalization.

Meanwhile, on the marijuana stock market, we’re seeing a rough start to begin the day, but, overall, this week is looking to be a decent one for pot stocks.

We’ll have to wait and see how it all pans out, but I believe that small gains are in store for the industry as the week progresses.