Marijuana News Today: CannaCon Hits Michigan, State Likely to See Marijuana Explosion

 marijuana news today 30 may
iStock.com/Charles Wollertz

Marijuana News Today

In the marijuana news today is the upcoming cannabis convention, CannaCon, which will take place in Detroit this weekend. The gathering will see between 3,000 and 5,000 attendees come together to talk about the marijuana business. (Source: “Marijuana entrepreneurs headed to Detroit for CannaCon,Detroit Free Press, May 30, 2018.)

The convention is yet another example of the United States’ growing acceptance of the drug. Detroit is a particularly timely choice to host the convention, as Michigan is readying itself for legal medical marijuana. The state is expected to begin issuing licenses for medical pot next month.

But the significance of Detroit hosting CannaCon extends beyond just the state’s upcoming medical marijuana legalization. Michigan may also soon have the opportunity to legalize recreational marijuana on the November 6 ballot.

The medical marijuana market in Michigan alone is already projected to be about $700.0 million. Add the legalization of recreational pot to that and we’re talking another billion-dollar-plus market for marijuana sales.

CannaCon, which started in Seattle in 2013 and has served as a cannabis forum in seven cities over the last four years, may well be the precursor to legalized pot in Detroit.

As always, legalization of marijuana in a state is good news for the industry as a whole.

Right now, marijuana legalization in the U.S. is in a bizarre limbo, in which the majority of Americans now have access to cannabis due to either medical or recreational legalization spreading across dozens of states.

But the major hurdle to the marijuana business in the U.S. is the fact that the federal government still has an active prohibition of marijuana, making the industry’s presence in the U.S. dubious at best.

After all, should the federal government decide to pursue marijuana to the fullest extent of the law, it could very well shut down all marijuana businesses currently operating, despite state laws approving their status.

It’s an uncomfortable position for the states, the federal government, and marijuana enthusiasts to be in. Not to mention that marijuana investors have had to find ways to navigate the precarious legal entanglement.

But if Michigan joins the growing list of states to legalize both medical and recreational marijuana, we’re going to edge one step closer to full legalization across the country.

With each state writing protections of marijuana usage into law, we’re nearing a critical mass in these states that is assuredly going to override the current federal opposition.

After all, there’s only so long that the federal government and politicians can push back against the will of the majority. If they do, they may be at risk of losing their next elections.

CGC Stock News

Despite May having been a very strong month for the marijuana market, the last week has been a rather large disappointment for the industry. Several of the largest marijuana stocks are down several percentage points over the past five days.

Canopy Growth Corp (NYSE:CGC) is among the companies that have had a difficult time of it. CGC stock, despite the hype surrounding its entrance onto the NYSE listing, has not been able to mark sustained success, instead having an up-and-down performance on the stock market since its transition to the major U.S. exchange.

CGC stock is down about seven percent over the past five days of trading, following a trend that has affected many other marijuana stocks across the industry.

Chart courtesy of StockCharts.com

While my CGC stock forecast is quite rosy, that applies more to the long-term projection.

June may present a setback for the company—maybe even the industry as a whole—after an impressive run in May.

As always, the specter of overvaluation hangs over many marijuana stocks. Whenever they register gains of 10% or 20%, we’re now accustomed to a pullback taking place shortly after.

It’s not an ideal situation, but it’s one that I believe will persist until July and August, when Canadian marijuana legalization hype will pick up and drive stock prices higher.

Aphria Stock News

One of the best-performing stocks alongside CGC stock last month was Aphria Inc (OTCMKTS:APHQF, TSE:APH).

After having weathered a pretty brutal year, Aphria stock surged in May with double-digit gains.

I had long predicted that the company would eventually fall to a price that would attract investors back into the fold. That prediction proved correct and we saw a surge of renewed interest in Aphria stock.

But as quickly as the company’s fortunes changed for the better, it finds itself again in the red. Aphria stock has fallen by over nine percent in the past five days.

Aphria Inc will have to contend with the accusations of overvaluation like many other marijuana companies. While its lowered stock price did draw investors back in, the surge probably put the company back in an uncomfortable area for investors.

I predict that the stock will fall for a while yet, but will likely surge again in July and August, alongside the industry as a whole.

CRON Stock News

Cronos Group Inc (NASDAQ:CRON) is an interesting stock in the marijuana news today, primarily because it has been an outlier relative to other marijuana stocks’ success in May.

CRON stock had a difficult month, with the last five days capping off a rough May. The stock ultimately fell by about four percent over the past week.

Despite the boost that it received from listing on the Nasdaq—a surge that the company hopes to not only emulate, but maintain—CGC stock has been targeted as overvalued.

I’m not sure if Cronos Group Inc will be able to break that perception in the near term without making some major moves to justify its market cap.

Analyst Take

The ebb and flow of the legal marijuana market is something that all pot stock bulls are accustomed to by now.

The market rises and falls, usually with huge surges being followed by painful pullbacks.

With the marijuana industry’s strong showing in May, June may start with a bit of a pullback from investors. But I believe that will only be temporary, with late June, July, and August ultimately going to be successful months for pot stocks.