Marijuana News Today: Wall Street Sees the True Potential of the Marijuana Industry

marijuana news today 11 october
iStock.com/Fabrice Cabaud

Marijuana News Today

In the marijuana news today we have one of the top Wall Street cannabis analysts coming out with a dramatically revised valuation for the budding industry, believing that legal marijuana could eventually account for a $500.0-billion market.

“Our broader, big picture view of cannabis goes beyond the adult use launch in Canada,” wrote Vivien Azer in a report last week.

“Rather, we believe this is the first step toward the establishment of cannabis as a key functional ingredient touching multiple consumer categories with four key verticals: adult use, beauty and nutraceuticals, OTC pain and sleep, and pharmaceuticals.” (Source: “No. 1 Wall Street pot analyst says the marijuana market will be much bigger than she first thought,” CNBC, October 1, 2018.)

Azer later came up with the $500.0-billion figure, the largest to date.

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The news here is that Wall Street is finally beginning to see the true potential of marijuana. And that will do wonders for marijuana stocks.

You see, a lot of the charges of overvaluation are slung at pot stocks precisely due to a myopic view that analysts tend to take in relation to the cannabis industry. Namely, they only consider current and near-future legal markets when making their valuations.

But the marijuana industry is going to expand worldwide. The writing is on the wall. More countries every year are relaxing regulations against marijuana, and many more are likely to legalize recreational pot once Canada shows how it can be done successfully.

As such, there’s a global market just waiting to be tapped into that will yield billions of dollars in profits. That’s why marijuana stocks are, in my opinion, not overvalued, but actually undervalued. Once you begin to account for the worldwide reach of cannabis, you can begin to play around with figures in the hundreds of billions.

Not to mention that, as Azer pointed out, there are a lot of segments to this market that are ripe for exploration.

Unlike alcohol or other vices that really only serve a single purpose, cannabis can be a beauty product, a food, a medicine, a fabric, etc. It’s such a versatile product that these low-ball evaluations of the market by analysts have so far downplayed just how much potential is locked away in this little plant.

We’re now seeing Wall Street begin to take notice of the marijuana industry, with massive gains made by pot stocks on the Nasdaq and New York Stock Exchange. We’re likely to see this continue as the industry makes global expansion a priority and countries catch up in terms of legislation.

TerrAscend Stock

While much of the marijuana stock market has been in a downturn lately, one stock was able to register massive gains this week: TerrAscend Corp (OTCMKTS:TRSSF, CSE:TER).

TerrAscend is a little smaller compared to the bigger fish in the industry, with a valuation below $1.0 billion. However, the company scored some major wins this week, which have helped boost its share prices.

The company recently struck a deal with the investment firm Canopy Rivers Inc (OTCMKTS:CNPOF, CVE:RIV). The announcement sent TRSSF stock soaring by more than 17% by the end of the day.

The agreement will see TerrAscend restructure its share capital. The idea here is that the company is looking to pursue international transactions in the cannabis sector, including in the United States. This deal with Canopy Rivers grants an avenue to make those investments.

“As TerrAscend pursues international growth, beginning in what is anticipated to be the largest cannabis economy in the world, we believe their team is well-positioned to take advantage of opportunities in regulated jurisdictions,” said Canopy Rivers Inc CEO Bruce Linton. (Source: “Canopy Rivers Announces Proposed Restructuring of Investment in TerrAscend,” New Cannabis Ventures, October 9, 2018.)

“And we are confident in their ability to leverage their pharmaceutical resources and strategic relationship networks to identify and execute compelling transactions.”

While TerrAscend stock was down in early-morning trading today by about four percent, the company has seen an increase in its stock value of 34% over the past five days.

Aphria Stock

Another marijuana company that has been able to buck the downturn trend lately is Aphria Inc (OTCMKTS:APHQF, TSE:APH).

Aphria stock shot up over the past five days by 14%, primarily bolstered by reports that the company was in talks with Altria Group Inc (NYSE:MO).

It’s looking like Altria is interested in acquiring an equity stake in Aphria stock, although no deal has materialized as of yet.

Landing this deal would likely be a huge boon for APHQF stock. Depending on how valuable it would be, expect to see Aphria stock soar if the company pulls the trigger on the purchase.

TER & APHQF Stock Performances

The TER stock (black line) and APHQF (blue line) performances from the past week are seen in the chart below:


Chart courtesy of StockCharts.com

Analyst Take

The marijuana news today shows progress both on the pot stock market and on Wall Street.

Analysts are finally coming around to something that I’ve known all along: there’s more money in the marijuana industry than many believed at first. Expect to see marijuana stocks rise accordingly as more people come over to this way of thinking, eliminating the calls of overvaluation in the near future.

Despite a recent downturn, we have been seeing some marijuana companies succeed on the stock market on the back of strong deals and rumors of potential deals in the near future.