Marijuana News Today
A few short days ago, it seemed like the trouble surrounding Canadian marijuana legalization was behind it. With the Senate’s approval of the bill, legalization seemed destined to make its end-of-summer deadline.
With the marijuana news today revealing that Canada’s Parliament is rejecting several amendments proposed by the Senate, we may see a delay to legalization in that country. As a result, we may also see harm come to pot stocks.
The Canadian Senate sent the bill back to the House of Commons with 46 proposed amendments, but several of those amendments have become sticking points in Parliament. (Source: “Pot legalization battle brewing as government rejects key Senate change,” CBC, June 13, 2018.)
The federal Liberal Party, which holds the majority of seats in the House of Commons, has flat-out rejected several of these proposals.
The most contentious ones include:
- Affirming the right of provincial governments to ban the growing of marijuana in homes.
- Creating a public registry of marijuana companies’ directors, officers, controlling parent corporations or trusts, and their directors, members, and shareholders.
- Banning promotional items such as T-shirts and hats that display marijuana company logos.
These three proposals contain within them deeper, overarching issues regarding the state of the legal cannabis industry in Canada.
The proposal to give provinces the power to ban home cultivation of marijuana is perhaps the most heated one. Several provinces are looking to retain that discretion while the federal government believes that marijuana should be legalized across the board.
At issue here is that, should the provinces receive the ability to ban home cultivation, lengthy legal challenges are all but certain to follow.
The second point deals with the marketing of cannabis, particularly in relation to minors.
This has been up for discussion since the very beginning of the legalization process, with lawmakers concerned that minors would be targeted by marijuana companies.
Laws similar to those banning marketing for tobacco companies were put in place, and the federal government believes that to be sufficient to prevent the potential harm to minors.
The final point deals with the possibility of black market vendors using an underground system and offshore accounts to avoid taxes and legal selling, but the government said that it feels there are sufficient bulwarks in place to prevent that.
All in all, the marijuana news today represents one of the first major political setbacks for cannabis in some time now, especially considering how successful the drug has been in gaining a foothold in U.S. politics over the past weeks.
While by no means does this rejection by the House mean that a delay is inevitable, the Senate now has the option to either go forward with the bill or reject it.
A rejection would further delay Canadian marijuana legalization, hurting pot stock forecasts.
While the Senate typically passes legislation that is sent to them (Senators are appointed, not democratically elected and, therefore, are wary of overstepping their bounds), the cannabis bill has drawn heated protest in the legislature, which may lead to an unexpected outcome.
CGC Stock News
While the beginning of this week has not been a good one for marijuana stocks, the marijuana news today reveals that their fortunes may be turning around.
After two days of moderate losses, we have seen gains—or at least a leveling off—across the marijuana industry. As of this writing, Canopy Growth Corp (NYSE:CGC) was up nearly three percent after a couple days of falling.
Chart courtesy of StockCharts.com
Canopy Growth stock has just about broken even on the marijuana stock market this week, seeing little gains or losses as of this morning.
If the trend picks up at the end of this week, however, we may see more slight gains of several percentage points.
It’s worth noting that, as usual, CGC stock is one of the more stable pot stocks.
Canopy Growth stock took fewer hits and recovered faster this week compared to other companies, which were hit harder by a slight downturn on Monday and Tuesday.
OrganiGram Stock News
OrganiGram Holdings Inc (OTCMKTS:OGRMF, CVE:OGI) has been one of the best performers in 2018, taking almost no consistent losses during the marijuana downturn this year.
But that hasn’t stopped the stock from being one of the harder hit ones this week. OrganiGram stock is down about six percent over the past three days, with today’s early-morning trading showing the company leveling off.
Pot stock bulls are hoping that the bleeding has been stemmed and that OGRMF stock will regain its position as one of the better performers in the legal cannabis industry.
Considering how well the stock has performed this year, I don’t see these price drops as anything to be too concerned about.
Aurora Cannabis Stock News
Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB) is another company that has been down this week—about three percent so far. Early-morning trading today, however, showed a leveling off and a slight recovery.
Aurora Cannabis stock continues its aggressive pursuit of fellow marijuana companies, this time with the purchase of Anandia Labs in an all-stock deal worth about $115.0 million. (Source: “Aurora Cannabis buying Anandia Laboratories in all-stock deal valued at $115M,” Financial Post, June 12, 2018.)
Anandia is a research and development company that provides analytical testing for clients licensed under Canada’s medical marijuana regulations.
While the deal hasn’t benefited Aurora Cannabis stock yet in any significant way, the management team is hoping that these numerous acquisitions will help position the company to be well suited for Canadian marijuana legalization and beyond.
It’s a strange business at times, the marijuana industry. Good political news coming from a far more important market, the United States, did little to spur positive movement on the marijuana stock chart.
Conversely, relatively bad political developments in Canada did little to sway pot stock trends in the other direction.
It seems that the days of the smallest political rumblings resulting in outsized effects on pot stock prices are behind us.
Of course, politics will still play a huge role in the future of marijuana stocks, but it appears that it will be less immediately impactful. In my view, this is a positive change.