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Marijuana Index Falls to Two-Month Lows as Cronos Becomes First Pot Stock to Trade on Nasdaq

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Pot stocks were down across the board on Monday even as Cronos Group (MJN) achieved what no other company has: a spot on the tech-rich Nasdaq Composite Index. The Toronto-based cannabis producer will begin trading on the exchange Tuesday morning.

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Marijuana Stocks Falter

The North American Marijuana Index, which tracks 39 top cannabis producers across the continent, fell 4.8% on Monday to $246.02. That was the lowest level since Dec. 26.

Huge losses were reported across the board, with Abcann Global Corporation (ABCN) and MYM Nutraceuticals Inc. (MYM) each falling double-digits percentage-wise.

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Losses were evenly spread across U.S. and Canadian marijuana stocks. The U.S. Marijuana Index closed down 4.8% at $78.50, while the Canadian index fell 4.4% to $675.46.

The Canadian Marijuana Index has a capitalization of more than $23 billion spread out across 24 companies. This includes industry leaders such as GW Pharmaceuticals Inc. (CNX), Canopy Growth Corporation (WEED) and Terra Tech Corp (TRTC).

By comparison, the U.S. index tracks 15 companies with a combined market cap of around $5 billion.

Cronos Achieves Major Milestone

By listing on the Nasdaq, Cronos has set the bar high for marijuana companies. The timing couldn’t be better. Investors across North America are looking to raise their stake in Canadian cannabis stocks ahead of the country’s planned legalization this summer.

Interestingly, Cronos is more integrated in the medical marijuana business as opposed to recreational pot. Medical weed has been fully legal in Canada since 2001.

According to the official website, Cronos is “a geographically diversified and vertically integrated cannabis group that operates within Health Canada’s Access to Cannabis for Medical Purposes Regulations and distributes globally.”

The company will trade shares on the Nasdaq under the ticker symbol CRON. It will also continue to trade on Toronto’s TSX Venture Exchange, where it gained 10.8% on Monday.

CEO Mike Gorenstein recently told VICE Money that, despite being a Canadian company, the majority of Cronos’ investors are in the U.S. Recreational weed is legal in only nine states, but medical marijuana is allowed in 29 states. The tide of legalization appears to be sweeping across the country despite the U.S. Justice Department’s surprise decision to repeal an Obama era policy that limited the enforcement of federal cannabis laws.

The repeal was initiated by Attorney General Jeff Sessions, who issued a one-page letter explaining the government’s renewed push for prohibition, even in states where recreational pot is legal. The decision was met with criticism from both sides of the aisle. Colorado Republican Senator Cory Gardner was especially concerned with the administration’s new direction.

“Why is Donald Trump thinking differently than what he promised the people of Colorado in 2016?” he said in a speech from early January. “Thousands of jobs at risk, millions of dollars in revenue, and certainly the question of constitutional states rights — very much at the core of this discussion.”

We speculated back in January that Sessions’ decision is unlikely to deter the U.S. cannabis market. Eighty years of pent-up demand for recreational weed, combined with strong commitment at the state level to fight prohibition, suggest the market will move full steam ahead.

The U.S. cannabis market is said to be worth more than $6 billion, according to investment bank Cowen & Co. That figure could rise to $50 billion in just eight years.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 453 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Marijuana Stocks Trade at Four-Month Highs as Canadian Senate Approves Cannabis Act

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North America’s marijuana index is riding high once again after one of the world’s biggest cannabis markets moved one step closer to full legalization.

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Canada’s Senate Passes Cannabis Act

Canada’s cannabis bill passed third reading in the Senate last week and in doing so overcame one of the last critical hurdles to full legalization of recreational marijuana. Bill C-45, the so-called cannabis bill, was approved by a vote of 56-30 with one abstention.

The amended bill goes back to the House of Commons, where Liberal Members of Parliament will determine which amendments to keep and which to omit before sending it back to the Senate. Once the bill is passed, provincial governments will have up to three months to prepare for full implementation of the law. At that point, recreational cannabis will be available for sale. According to various studies, the sale of recreational weed will open up a multi-billion-dollar industry.

However, it’s not entirely clear how long the Liberals will need to review the amended bill before sending it back to the Senate. There are currently three ministers looking over the amendments. Although most Senate amendments are minor, about a dozen stick out as significant impediments to implementation.

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For cannabis companies, this could mean many more months of uncertainty. However, in the grand scheme of things, the passing of Bill C-45 is a major breakthrough for businesses that have gambled heavily on the legalization of recreational pot.

Marijuana Stocks Rise

After initial trepidation, marijuana stocks have risen sharply since Canada passed Bill C-45. However, the bulk of the gains have been concentrated south of the border, a sign that investors were becoming more optimistic that the Trump administration would continue to back off states seeking to legalize recreational cannabis.

The North American Marijuana Index, which tracks 41 companies in Canada and the United States, rose 1.8% on Monday to $277.70. That was its highest settlement since Feb. 15.

Shares of marijuana companies have gained 10.6% over the past month but are still well below peak levels from early January.

All of the gains Monday came from U.S. companies, with the likes of MariMed Inc. (MRMD), CV Sciences Inc. (CVSI) and WeedMD Inc. (WMD) putting up large gains. The U.S. Marijuana Index jumped 5.3% to $110.04, its highest since late January.

Canadian cannabis stocks fell 1.5% on Monday, their third consecutive down session. The Canadian version of the marijuana index, which contains 24 companies collectively valued at $26.2 billion, rose to more than two-month highs ahead of the Senate vote on Bill C-45.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 453 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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The Biggest Marijuana Merger Ever Lifts Cannabis Stocks

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An expected merger between Canada’s Aurora Cannabis and MedReleaf propelled marijuana stocks higher on Monday, sending a strong signal that consolidation is afoot ahead of planned legalization this year.

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Biggest Merger Ever

Aurora Cannabis, one of Canada’s biggest marijuana companies, is set to purchase MedReleaf in an all-stock merger worth $2.2 billion. According to an official statement, the deal will enable the newly merged company to produce 570,000 kilos (1.26 million pounds) a year of cannabis across nine facilities in Canada and two in Denmark.

The deal is expected to be finalized in August, just a few months before the Canadian government legalizes recreational pot. Canada was set to legalize the drug on July 1 but a series of bottlenecks pushed back the date until the fall.

Under the deal, Aurora will offer MedReleaf shareholders 3.575 shares in Aurora in exchange for every unit in MedReleaf they hand over.

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“It gives us a footprint in Ontario, it prepares us properly for the adult usage market, the strains that MedReleaf has managed to grow are the leading strains in this country, arguably in the world,” said Terry Booth, Aurora’s CEO.

Ontario is Canada’s most populous province, accounting for roughly 40% of the nation’s gross domestic product.

Aurora Cannabis and MedReleaf are the second and fourth largest Canadian marijuana companies by market capitalization. Combined, they have the potential to outgrow industry leader Canopy Growth Corporation, which is currently worth $6.45 billion. Taking today’s prices into account, the newly merged company is capitalized at more than $7 billion.

That said, Aurora Cannabis has emerged as the largest pure play cannabis company in the world, earning that distinction through a series of key acquisitions. By purchasing MedReleaf, the company has given itself a strong foothold in the medical marijuana sector.

Marijuana Stocks Outperform

North America’s marijuana industry gained on Monday, as news of the Aurora-MedReleaf deal made its way to investors.

The North American Marijuana Index rose 2.2% to close at $256.64, its highest settlement in a month.

MariMed Inc. (MRMD) and OrganiGram Holdings Inc. (OGI) were the top performers, gaining 14.4% and 11.1%, respectively.

Cronos Group (CRON) jumped 7.2% and Canopy Growth Corp (WEED) added 6.9%.

Merger news failed to lift Aurora Cannabis (ACB), as share prices fell 2.1% on Monday.

The Canadian Marijuana Index, which is capitalized at $24.41 billion, rose 2.9% to $660.35. Meanwhile, the $6.82 billion U.S. Marijuana Index added 1.2% to finish at $90.20.

Cannabis stocks outperformed Wall Street by a wide margin on Monday. The S&P 500 Index gained just 0.1% during the session.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 453 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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The Case for Marijuana Stocks Is Growing

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The marijuana industry is abuzz with optimism again. Looming legalization in Canada, cutting edge research and development and a pivotal shift in favor of state rights in the Trump White House have all raised the stakes for cannabis stocks. These developments could generate an industry worth $47 billion annually in about ten years, according to ArcView.

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Trump’s Decisive Move

President Donald Trump made a bold move earlier this month by reversing a Justice Department proposal to crack down on the marijuana industry. In doing so, he may have ended a looming legal battle between states that have legalized recreational marijuana and federal prosecutors who want to enforce national laws against them.

Perhaps more interesting is the fact that Trump made the decision without consulting Jeff Session, the Attorney General who decided back in January that Obama-era guidance was not needed. This meant that federal prosecutors could pursue legal action against marijuana growers even in states where the substance is legal.

Colorado Republican Senator Cory Gardner was instrumental in convincing the Trump administration to abandon the Justice Department’s proposal. Legal weed sales have generate $1.5 billion for the state since prohibition ended in 2014.

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Cannabis and Pharmaceuticals

Pharmaceuticals account for the largest share of established marijuana companies when measured by market cap. The sub-sector is primarily involved in cannabinoid research to treat ailments like cancer, epilepsy, multiple sclerosis and other chronic pains. Now, a prominent researcher is on the verge of getting FDA approval for a cannabinoid-based drug.

The company is GW Pharmaceuticals (GWPH) and the drug is Epidiolex, which is designed to treat childhood-onset epilepsy. The FDA is expected to reach a decision on the drug by the PDUFA deadline of June 27. PDUFA dates usually give federal regulators ten months to review new drugs. Priority drugs are given a six-month review window. FDA approval of the drug would not only boost GW share prices, but catalyze the entire industry.

Other prominent cannabis drug researchers include Insys Therapeutics (INSY) and Axim Biotechnologies (AXIM).

Canada Leads the Charge

Marijuana legalization has been high on the government’s agenda since Justin Trudeau took office in 2015. Although the timeline for legalization has been pushed back, Canadians will still be able to buy weed legally this year.

A final Senate vote on the mater is scheduled for June 7, with full legalization to commence shortly eight-to-12 weeks later. Although the Conservative party is opposed to legalization, the Senate is expected to pass the measure easily.

Legalization will open the door to a $5 billion industry, leading to direct and indirect spending that could add billions more.

Canada’s Marijuana Index is currently valued at $24 billion, much higher than the still-underdeveloped U.S. equivalent. Some of the most active companies on the Canadian cannabis scene include Aurora Cannabis (ACB), Canopy Growth Corporation and Aphira (APH).

The North American Marijuana Index rose 1.3% on Thursday to settle at $256.32. The Canadian Index advanced 1.4% to $652.46. By comparison, the U.S. S&P 500 Index fell 0.6% and the TSX Composite Index closed down 0.5%.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 453 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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