Pot News Today: Big Developments This Summer for Pot Stocks

marijuana news today 8 may
iStock.com/Jason W Lacey

Marijuana News Today

The marijuana news today is centered on states and Canada preparing for what is to be one of the biggest summers for marijuana in living memory.

On the horizon are two massive moments in the marijuana industry. The first is Canada’s legalization of recreational marijuana. The marijuana news today still has provinces figuring out just exactly how the industry is going to operate, with only a few short months to go before legalization hits.

While the news was positive in that some rules were eliminated, making purchasing marijuana easier in one province (more on that below), there is growing concern over the continued alteration of marijuana legalization plan in Canada.

Another bit of marijuana news today comes by way of the U.S., which is also looking to have a big push for legalization this summer. No, not on a national scale, but in one of its richest and most populous states—Massachusetts.

U.S. Marijuana Legalization

As the path toward total U.S. marijuana legalization continues, Massachusetts represents the latest state to legalize recreational pot for its residents.

While the drug was intended to be freely available on January 1, that was delayed due to the state wanting more time to iron out the details of the newly sanitized industry.

This isn’t all too different from what some lawmakers are calling for in Canada. The only difference is that a delay in the Canadian marijuana legalization process would be a huge hit to pot stocks.

In any case, Massachusetts changed its legalization date to July 1, with April 1 being the date that the Cannabis Control Commission began accepting and reviewing licensing applications.

The commission was said to have received as many as 200 applications in the first day—the desire for recreational marijuana is very real, after all. (Source: “Marijuana shops become legal in Massachusetts in less than two months. Here’s what to expect,” Boston.com, May 7, 2018.)

But even if they are approved for sales, July 1 will not be the end of the marijuana delays.

The commission won’t be approving retail or cultivation licenses until June 1, so there will be a shortage of supply, as this is, after all, a crop that takes months to grow and cultivate.

Another issue is that a good chunk of the towns in the state have banned retail pot shops from opening within their city limits.

The overall effect is that the Massachusetts marijuana legalization process is not going as smoothly as pot bulls would like to see.

In the marijuana news today is just how complicated that process is proving. This will not immediately impact pot stocks, but it does hurt the future prospects of several companies as these delays are not indicative of a positive reception in the U.S. for marijuana.

Despite big gains being made in the U.S. political realm last month, these types of delays and the general timidity of the legalization process in the state are not good signs for how the U.S. will tackle legalization down the line.

Of course, the fact that another state is joining the fold of U.S. marijuana legalization is a counterbalancing factor that is going to help pot stock growth, so the marijuana news today is a mixed bag.

Perhaps the most significant impact of the Massachusetts delay is related to Canada.

Just today, Edmonton, Alberta is still figuring out zoning bylaws for retail cannabis stores, while legalization is a few short months away.

This isn’t all that surprising, but as cities and provinces continue to tackle the specifics, the chances for delays abound.

A delay in Canadian marijuana legalization would not only be difficult to bear for marijuana stocks, but it could very well lead to a prolonged extension of the current correction the industry is undergoing.

Marijuana Stocks Today

The marijuana news today wasn’t particularly glowing for the industry, and neither was the general performance on the stock market.

Of the three industry leaders we tend to track—Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB), Canopy Growth Corp (OTCMKTS:TWMJF, TSE:WEED), and Cronos Group Inc (NASDAQ:CRON)—the first two have been static so far in May, while Cronos stock has been taking an absolute beating of late.

Chart courtesy of StockCharts.com

While Aurora Cannabis stock has seen virtually no change over the past few days and Canopy Growth stock registered modest gains of about one percent, CRON stock has been plummeting at an alarming rate ever since its recent financial report.

While the numbers were promising, CRON stock has been getting killed in the markets due to what is perceived as a gross overvaluation of the stock. The company is down over 15% in the past five days.

Cronos Group stock had been the beneficiary of being the first pure-play marijuana company on the Nasdaq, sending its stock value soaring. Since then, however, it has been hit hard by a market pullback, with the numbers simply being unable to justify its skyrocketing market cap.

Analyst Take

While the bludgeoning of CRON stock continues, the real marijuana news today is whether the industry can keep the Canadian marijuana legalization on track.

While the delays in Massachusetts are not ideal, the true test will be whether Canada can pass its laws on schedule. If it can’t, the industry drawback may continue for some time yet.