Marijuana News Today
In the marijuana news today, we have the U.S. federal government once again trying to meddle with marijuana sales, even though the will of the people is clearly on the side of cannabis legalization.
This time, we have the reemergence of an open letter that the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) wrote in 2011, saying that federal law prohibits anyone who is an “unlawful user or addicted to any controlled substance [from] possessing firearms or ammunition.” (Source: “Medical marijuana or guns? Oklahoma latest state forced to choose,” CBS News, June 29, 2018.)
While that edict seems pretty reasonable at first blush, the letter goes on to say that any marijuana user, regardless of state laws that allow consumption of the substance, is in violation of federal law and is, therefore, an unlawful user of a controlled substance—which means gun ownership is not allowed.
This plays out particularly harshly in Oklahoma, a deep red state with an affinity for firearms. With the state’s new proposal for medical marijuana going through earlier this week, those living in Oklahoma may be forced to choose between a marijuana medical card or owning a gun.
“Using a controlled substance is a prohibitor, similar to being convicted of a felony offense,” said Meredith Davis, an ATF special agent. As the bureau outlines, felons are prohibited from possessing a firearm.
The ATF even went on to say that possession of a medical marijuana card was reasonable cause to suspect the owner of unlawful marijuana use, even if the card was obtained legally.
Not to editorialize too much, but this is, well…stupid.
That the ATF is going to prohibit gun ownership for all legal marijuana users who have prescriptions for the drug, due to marijuana being a federally controlled substance, is a very silly policy.
Consider that the U.S. is stuck in the grips of an opioid crisis. You can be high as a kite on a high-potency opioid medication and still be allowed to own as many guns as your heart desires, but merely the possession of a medical marijuana card is enough to preclude gun ownership.
This is another heavy-handed attempt by a federal agency to interfere with states’ rights.
Yesterday, I wrote how the U.S. has never been closer to marijuana legalization than it is now—which is true. But these types of misguided attempts by the federal government to curb legal marijuana use show that the country still has a long way to go.
So what does this mean for marijuana stocks? In the short term, not a whole lot. Oklahoma marijuana sales will still likely be handled by in-state growers and non-public companies.
But it shows that the marijuana legalization in the U.S. is going to face many battles.
Forcing people to choose between their guns and medically prescribed cannabis is certainly an attempt to create a wedge issue where there shouldn’t be.
More importantly, the Republican Party is often seen as the party of the gun and states’ rights. With those two principles butting heads, it will be interesting to see how that pans out.
As far as marijuana stocks are concerned, the marijuana news today is less than ideal, and it reveals that U.S. marijuana legalization, while inevitable, is not necessarily close.
CGC Stock News
While the political developments for pot may not be the greatest this week, stocks are beginning to show some life again in the marijuana news today.
At the end of trading on July 28, we saw Canopy Growth Corp (NYSE:CGC) stock skyrocket by 10%.
Of course, the stock price is still down about six percent over the past four days, but another strong move on Friday could push CGC stock back into positives and help balance off the performance at the beginning of the week.
Chart courtesy of StockCharts.com
Canopy Growth stock is also dealing with the aftermath of a weaker-than-expected quarterly report.
The company registered a net loss of CA$61.5 million, after a CA$12.0-million loss during the same period a year earlier. (Source: “Canopy Growth reports quarterly loss ahead of marijuana legalization,” The Globe and Mail, June 27, 2018.)
Analysts anticipated a net loss of CA$12.8 million, making the final figure particularly jarring.
The losses were largely spurred on by a 149% increase in operating expenses compared to a year ago, largely attributed to the company gearing up for Canadian marijuana legalization, which will land on October 17, 2018.
Still, the quarterly report was not enough to hinder CGC stock’s recovery to close out this week.
It’s hard to say just how much of an effect Canopy Growth’s quarterly report had on its stock’s performance. Rival companies’ stocks have been following virtually the exact same trend as Canopy Growth stock, just to different degrees.
CRON Stock News
Cronos Group Inc (NASDAQ:CRON) stock also saw a decline at the start of this week and a recovery on Thursday, gaining a modest but not unwelcome four percent.
CRON stock has been one of the weaker performers all year, and that has held during the boom of last week and the fall of this week. Still, the company seems to be in keeping with the rest of the marijuana industry, if only to weaker degrees.
OGRMF Stock News
Now we come to OrganiGram Holdings Inc (OTCMKTS:OGRMF, CVE:OGI) stock, which landed between CRON stock and CGC stock this week.
OrganiGram stock jumped by about six percent at the end of Thursday and it remains one of the better stock plays in 2018.
The reason is that the stock has yet to have its true breakout run. While CRON stock and CGC stock have both gained close to 400% over the past year, OGRMF stock has registered progress well under half that.
Of course, no one is going to scoff at triple-digit gains, but, in the marijuana industry, that’s what passes for slow growth.
The upshot here is that OrganiGram stock is still seen as one of the more undervalued picks in the legal cannabis industry. Considering there’s rampant apprehension surrounding marijuana stock valuations, being considered undervalued is a great advantage.
The marijuana news today has its share of ups and downs.
The down is that the U.S. feds are still being as irritating as possible when it comes to marijuana legalization.
The ups are that the marijuana stock market is rebounding at the end of this week.
Overall, it was another solid gain for the cannabis industry as the mini-correction seems to be passing. While we are likely to see more pullbacks and bull runs in the near future, the legal marijuana industry is looking poised for a great run this summer.