Marijuana News Today: Regulation Restricting Marijuana Growing May Benefit Pot Stocks

marijuana news today 31 may
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Marijuana News Today

When you hear the words “marijuana regulation,” they more often than not carry with them negative connotations for the pot industry. But in the marijuana news today, we have one restriction that may actually help the marijuana industry.

In Canada, the Senate has just passed an amendment that will allow provinces to draft their own laws on personal cultivation of pot, with some going as far as banning the practice altogether. (Source: “Why marijuana legalization will likely include bans on home grows,” Global News, May 29, 2018.)

While this will certainly not be met by amateur botanists with warm smiles, it may actually help the marijuana industry as a whole.

You see, by instituting a ban on personal cultivation in certain provinces (right now Quebec and Manitoba have both said that they are looking to prohibit personal growers) these provinces are likely to create more business for larger marijuana companies.

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While some pot stocks will benefit from selling seeds and other growing materials directly to consumers, the bread and butter of the operation for the biggest companies will involve selling marijuana wholesale to provincial governments.

The more people forced to buy from these provincial sellers—whether they be privately or publicly run—the more it is going to help bolster marijuana stocks.

Of course, it may end up being a rather insignificant amount of people who would have grown marijuana in their homes in the first place, but the upshot of this move at the very least looks as if it will benefit the marijuana industry overall.

In any case, it just goes to show that even with Canadian marijuana legalization so close at hand, there is still so much to be done on the legal side of things.

With only a short few months before we’re likely to see legal weed in Canada, ironing out the details of these types of regulations will be crucial to a smooth rollout.

Should the legalization process falter, after all, expect marijuana stocks across the board to take big hits.

CRON Stock News

Chart courtesy of StockCharts.com

This past week has seen a number of reversals of fortunes on the marijuana stock market.

Throughout May, many stocks were riding high, with some having gained as much as 20% over two or three weeks.

But the last week of May has seen the script flip, with companies across the board falling, with one notable exception: Cronos Group Inc (NASDAQ:CRON).

CRON stock is notable in that it hasn’t quite been in keeping with the rest of the industry.

While other companies were notching strong gains in May, CRON stock continued to perform meekly. The company was unable to capitalize on the bullish trend in May, partly due to charges of overvaluation that have dogged it for many weeks now.

But to close out May, Cronos Group stock is up about three percent while many other prominent marijuana stocks find themselves in the red.

While you can see in the chart above that the trends are generally similar among the companies profiled today, CRON stock is noticeably marking gains rather than losses.

That is probably due to the company’s reduced stock price and renewed investor interest after a number of poor performances of late have made the company more attractive, price-wise.

Aphria Stock News

One of the most volatile stocks in 2018, Aphria Inc (OTCMKTS:APHQF, TSE:APH) followed up its great performance throughout most of May with a terrible finish.

Aphria stock is down over eight percent over the past five days, giving back much of what had been gained over the past few weeks.

The company was—similarly to CRON stock—plagued by charges of overvaluation, leading many investors to abandon the stock for much of 2018.

In May, however, things looked like they were turning up for the company as it saw fairly substantial runs made, gaining as much as 20% in a week at one point.

But that trend seems to have died down, as evidenced by today’s market movements.

Aphria stock was hoping to benefit from its new pivot toward the pot business in South Africa, but the news has done little to help the company.

Aurora Cannabis Stock News

Another company that has had a rather weak closing to May is Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB).

Aurora Cannabis stock has had an uneven May, to say the least.

Following Aurora announcing its acquisition of MedReleaf Corp (OTCMKTS:MEDFF, TSE:LEAF), the company hoped the blockbuster deal would help spur on stock growth.

Aurora Cannabis stock did not exactly comply, with the shares going up and down until the last couple weeks of May when we saw sustained—if unspectacular—growth.

Now the company has experienced losses of about three percent over the past week.

Analyst Take

The marijuana news today was a reversal of what we’re used to seeing. In general, a lot of the recent news out of Canada regarding marijuana legalization had not been overly positive for pot stocks, while the marijuana stock market had registered several strong performances of late.

The marijuana news today has the marijuana stock market generally down this past week, while the news will likely benefit pot stock investors further on down the line.