Marijuana News Today
With all eyes on the fast-approaching Canadian marijuana legalization, the marijuana news today brings up some troubling questions—namely, are we headed toward a marijuana supply shortage?
There is no other event more important to marijuana stocks for the remainder of 2018 than Canadian marijuana legalization on October 17. Pot stocks will see their overall year’s gains largely made or broken depending on how that process shapes up.
But what we’re seeing out of Canada lately has me concerned. And the marijuana news today now reveals that Global News—a Canadian news organization—has been unable to find any details that even one gram has been ordered to service the millions of eager pot smokers awaiting in Canada’s largest province, Ontario. (Source: “With 10 weeks to go till legalization, Ontario doesn’t appear to have ordered any pot,” Global News, August 7, 2018.)
This is concerning news as we are now about two months away from when marijuana legalization is coming into effect.
Not to mention that with a new provincial government in place, the plan to have a province-run monopoly on marijuana is now also being cast into doubt. While no concrete plan has been released (again a cause for concern) the rumors are that the current government would rather see a public-private hybrid for marijuana sales in Ontario.
While that model is preferable to marijuana stocks, this pervasive lack of certainty surrounding so many different aspects of marijuana sales in Ontario leaves me wondering if we may see pot stocks suffer as a result.
Pot stocks need to have a strong showing in Canada if they want to see their value climb in 2018. There’s no other way around it. It’s a critical event that has been hyped all year and is the reason stocks are valued as highly as they are.
If Canadian marijuana legalization occurs and we see less-than-stellar numbers, expect the stocks to take a huge dip in value.
If the numbers can impress, however, then we’re looking at a potential marijuana stock bull rush to close out 2018—perhaps even on the level of 2017.
So there’s a lot of money on the line here, and Ontario’s lack of preparedness could make hitting those lofty numbers that much more difficult. After all, if you don’t have a product on hand to sell, then you can’t exactly turn a profit.
“It’s definitely something that hasn’t been finalized at this point, but we still have some time before legalization,” Aphria Inc (OTCMKTS:APHQF, TSE:APH) spokesperson Olivia Pineau said to Global News.
“I think all licensed producers, including Aphria, are preparing behind the scenes and are ready to negotiate and sign those agreements when the time comes.” (Source: Ibid.)
These are not heartening words. They show that, so close to legalization, there are still a lot of questions up in the air.
Canopy Growth Stock
The marijuana news today may be concerning, but the pot stock market isn’t paying any attention, with strong gains being made in early-morning trading.
Canopy Growth Corp (NYSE:CGC) is up four percent on the day so far and has netted a positive growth since the beginning of last week.
Right now, the next big thing to watch for with CGC stock is its financial earnings report, which will be released on August 14.
Depending on the numbers contained within, we’re going to see some movement out of CGC stock. So for those looking to make a short-term play one way or the other, August 14 is the date to do it.
As far as my predictions go for that earnings report, I don’t think we’ll see anything too groundbreaking in the filings. I’d say we’ll see positive numbers that will jump CGC stock several percentage points, but that gain won’t last unless we’ve fully emerged from the marijuana correction we’re experiencing.
The correction will likely hold until late August at the very least, however, so I believe we’ll see fleeting gains made when the report releases.
Aurora Cannabis Stock
Another marijuana company enjoying a strong run this morning is Aurora Cannabis Corp (OTCMTKS:ACBFF, TSE:ACB), up over three percent in early-morning trading.
The company’s weekly performance, however, is less impressive. It’s down about seven percent since the start of last week, putting it behind the gains of CGC stock.
But aside from the stock movement we’re seeing with Aurora, the company also announced another deal. This one was not an acquisition, but rather a partnership with an alcohol company.
Alcanna Inc (OTCMKTS:LQSIF, TSE:CLIQ) reached a license agreement with Aurora that will see the liquor retailer be given exclusive rights to open retail cannabis stores under the brand name “Aurora” across Canada. (Source: “Aurora Cannabis and Alcanna Enter into Exclusive License Agreement for Alcanna Operated, Aurora-branded Retail Stores,” Cision, August 8, 2018.)
Alcanna is the country’s largest private sector liquor store retailer, and will almost certainly help gain exposure for Aurora’s products come legalization.
Aurora had previously invested in Alcanna in February. The company maintains 229 retail outlets in Western Canada and Alaska.
Unlike Aurora stock’s riskier acquisitions, this deal speaks of short-term, real goals and I believe will be looked on favorably by investors.
No billion-dollar mega-mergers, just a company gearing up for legalization by getting its products on shelves.
Considering the marijuana news today, this is exactly the type of move you want to see out of Aurora Cannabis stock.
Cronos Group Stock
Up only about one percent today so far, Cronos Group Inc (NASDAQ:CRON) brings up the rear compared to its competitors, but that’s still positive and it means that we’re spared a day of the marijuana correction wreaking havoc.
To be clear, I don’t think that today’s gains mark the end of the downturn, but we are getting closer to the time that I believe the hype surrounding Canadian legalization will step in and begin to remedy some of the damage wrought in July.
CRON stock, meanwhile, has had a bad but not awful week, down about two percent.
CGC, ACBFF, & CRON Stock Performances
Check out the chart below of the recent performances of Canopy Growth stock (black line), Aurora Cannabis stock (blue line), and Cronos Group stock (red line):
Chart courtesy of StockCharts.com
The marijuana news today represents a mixed bag.
The marijuana legalization process in Ontario is concerning and may be a threat to the outlook of pot stocks for the remainder of 2018.
But the pot stock market responded strongly after today’s opening bell, making it an overall win for weed bulls.