Marijuana News Today
In the marijuana news today we have more evidence that the industry is indeed gaining legitimacy as a growing number of institutional investors are beginning to enter the market.
One of marijuana’s biggest drawbacks has always been the stigma surrounding what was only a few years ago criminalized across the globe (with a few exceptions).
Now, institutional investors like banks and hedge funds are extricating themselves from that old way of thinking. Progress is being made. (Source: “Big Money Tests Marijuana Waters, With Hedge Funds Leading Charge,” Bloomberg, July 12, 2018.)
While the percentage of institutional investors owning pieces of the marijuana sector is still extremely low (we’re talking single-digits for many companies), there is an increased interest from bigger funds.
For instance, with the marijuana two companies listed on U.S. stock exchanges—Cronos Group Inc (NASDAQ:CRON) and Canopy Growth Corp (NYSE:CGC)—we’re seeing a much higher stake being gobbled up by big investment funds.
About 18% of CGC stock is held by institutions, while the percentage for CRON stock is about 22%.
While those numbers certainly trump most of their competitors, that’s still on the low end, compared to many other large companies in powerful markets.
In most other industries, you’ll often see institutions owning as much as three-quarters of massive billion-dollar-plus companies.
So there’s still a ways to go, but the fact that there is a budding push from institutions to get more involved in marijuana stocks is a fantastic thing for the industry.
After all, consider how fast these marijuana stocks have grown without the massive capital injection that banks and hedge funds can provide. We’re talking literally billions of dollars of untapped capital that we can reasonably expect to enter the market within the next few years.
It’s one of the primary reasons I’m so bullish on marijuana long term. It’s only a matter of time before these institutions want to get a piece of the cannabis pie.
As laws grow laxer and the drug becomes more accepted across the globe, expect to see these institutions step up and pour money into the industry—to the massive benefit of the pot stock market.
CGC Stock News
The marijuana news today is good all around as the marijuana stock market is staging a mini-rally.
CGC stock is up about two percent on the week and has had a slew of good news to help boost its performance.
The company announced on Tuesday that it would acquire Hiku Brands Company Ltd (OTCMKTS:DJACF, CNSX:HIKU). Hiku owns the “Tokyo Smoke” store chain, which sells cannabis-related products.
Chart courtesy of StockCharts.com
The company is also going to step into the marijuana space on October 17, when it will begin peddling recreational marijuana at its storefronts.
The company’s expansion into the retail space is yet another reason to be excited for Canadian marijuana legalization that’s on its way.
A second big win for the company came by way of a licensed agreement between CGC stock and British Columbia. (Source: “B.C. signs agreements with licensed producers to supply legal marijuana,” BNN Bloomberg, July 11, 2018.)
B.C. announced which companies would be supplying Canada’s third-largest province when weed is legalized. Canopy Growth was one of the companies selected—alongside 30 others.
This was still a victory for the company and the two developments have helped bolster CGC stock this week.
Aurora Cannabis Stock News
Another beneficiary of the B.C. licensing deal, Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB) has won the rights to supply the province with cannabis when weed is legalized on October 17.
Unfortunately for Aurora Cannabis stock, however, the deal was not enough to boost its value. Aurora Cannabis stock is down about two percent on the week.
The company hoped that news of its partnership with Evio Beauty Group Ltd.—in which the two will produce cannabis- and hemp-derived beauty products—would help bolster its stock, but that hasn’t quite worked out this week. (Source: “Aurora Cannabis and Evio Beauty Group Agree to Strategic Partnership,” Cision, July 11, 2018.)
Aurora Cannabis stock remains one of the weaker performers over the past few days as a result.
MedReleaf Stock News
One of the best performers over the past month is up again this week.
MedReleaf Corp (OTCMKTS:MEDFF, TSE:LEAF) is up almost two percent on the week, and 15% over the past month.
MedReleaf stock was also bolstered by its selection to supply B.C. with marijuana come October 17.
Of course, MedReleaf stock is also riding high as its acquisition by Aurora Cannabis comes along.
Just last week, the Canadian Competition Bureau announced that it would not be challenging the biggest deal in marijuana history. (Source: “Aurora Cannabis Receives Competition Bureau Clearance for MedReleaf Acquisition,” Cision, July 6, 2018.)
MedReleaf will likely continue to grow until that final acquisition deal is signed, making it one of the more intriguing plays over the next few weeks.
Across the board, the marijuana news today is great.
The industry needs capital to fund its rapid growth, and institutions like to make money. It seems like a perfect fit for the two, and it’s only a matter of time before bigger players begin pouring money into the legal cannabis industry.
Things like legal reforms and friendly governments will certainly help matters along—and we’re talking a timeline of months and years here, not days and weeks. In the near future, we’re going to see these institutions play a bigger role in the industry and help fuel marijuana stock growth.