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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.

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.

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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4.6 stars on average, based on 604 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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Cannabis Maker Tilray Soars 50% amid U.S. Regulatory Green Light

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Medical cannabis maker Tilray (TLRY), which trades on the Nasdaq, has seen its stock expand by more than 50% today as the market cap races past $20 billion. As CNBC noted, Tilray dwarfs more than 100 companies in the S&P 500. Today’s gains are impressive, even for a stock that has gained about 900% since going public in July. Something to keep in mind is that on the fundamental side, Tilray only boasts $28 million in sales, suggesting that the stock has likely gotten ahead of itself. There’s reportedly been speculation about potential M&A involving Tilray and some rock-solid developments as well.

Meanwhile, the major indices are posting lackluster performances, which places the spotlight all the more on TLRY. Tilray has been buoyed by a couple of catalysts, not the least of which involves the regulatory green light to import cannabis into the lower 48 states for research. Additionally, Tilray chief Brendan Kennedy was featured on CNBC with Jim Cramer, which gave the company good exposure.

 

Source: Yahoo Finance

Kennedy in the “Mad Money” interview with Cramer pointed to a global medical marijuana market with the potential to be worth $150 billion despite all of the regulatory hurdles, one of which the company just cleared. It’s a market in which pharmaceutical giants need to play to remain competitive. Kennedy told Cramer:

“Cannabis is a substitute for prescription painkillers, prescription opioids, and so if you’re an investor in a pharmaceutical company or you’re a pharmaceutical company, you have to hedge the offset from cannabis substitution.”

Similarly, alcohol companies and investors need to jump in because “it’s a great hedge for them.”

Regulatory Bump

In a paradigm shift, the U.S. Drug Enforcement Administration (DEA) has handed regulatory approval to Tilray to import medical cannabis to the United States for research purposes. Tilray has partnered with the UC San Diego to start. It’s a major boon for the Canadian marijuana play that already has a presence in the U.S., as now its North American positioning will only be strengthened.

Not to mention the fact that Coca-Cola announced it’s exploring an expansion into the cannabis industry, too. The beverage giant is in discussion with Aurora Cannabis for a possible marijuana drink. It’s created a frenzy in the cannabis market akin to the early excitement surrounding the blockchain.

Similar to crypto, there’s a great deal of speculation that’s driving Tilray shares right now, and as Cramer pointed out “a lot of retail money,” which may not end well for everyone. Until then, all eyes are on Oct. 17, which is when cannabis is legalized for recreational use in Canada.

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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4.6 stars on average, based on 60 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.




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Canada Goes Green as Senators Approve Recreational Marijuana Bill

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Canada will become the first G7 nation to legalize recreational marijuana after a Senate vote Tuesday night cleared the final hurdle to a ceremonial approval later this year.

Canada Goes Green

The upper chamber voted 52 to 29 in favor of passing Bill C-45, a controversial proposal to end the generational ban on recreational pot. The Senate passed the bill mere days before a Parliamentary recess began, paving the way for implementation by the end of summer.

It is unclear when Bill C-45 will receive ceremonial approval by the governor-general – the final step before it becomes law – although ministers said an additional 12 weeks beyond that may be required before retail sales begin.

Prime Minister Justin Trudeau took to Twitter Tuesday to announce the Senate’s decision:

“It’s been too easy for our kids to get marijuana – and for criminals to reap the profits. Today, we change that. Our plan to legalize & regulate marijuana just passed the Senate. #PromiseKept.”

Investors Look to Get High on Canadian Weed

The Senate’s decision makes the world’s eleventh-largest economy an attractive destination for yield-seeking investors looking to capitalize on an industry with high-growth potential.

Canadians spent $5.7 billion on marijuana last year, according to the government’s top statistics agency. The nation’s 5 million pot consumers doled out an average of about $1,200 on the green plant and its derivatives, with 90% of the proceeds going to the black market. By comparison, Canadians spent just over $22 billion on alcohol and $16 billion on tobacco products.

This year, Canadians are expected to consume about 474 metric tons of marijuana flower, according to GT Research, a cannabis analytics company. Consumption is expected to reach roughly 861 metric tons in four years.

Research from Deloitte suggests legal pot sales in Canada will exceed $7 billion. However, the economic footprint is expected to be much larger. When factoring direct and indirect activity, legal weed could generate up to $22.6 billion in economic value.

The end of prohibition, once confirmed later this year, will take the weight off marijuana producers that have wagered big on legalization. After a flurry of consolidation domestically, Canadian producers are now setting their sights on countries like Italy, Spain and Colombia for expansion.

The Canadian weed landscape has experienced “merger madness” over the past 12 months, with larger firms snatching up smaller players in a series of moves. Aurora Cannabis Inc. (ACB) recently acquired MedReleaf Corp for $2.9 billion. In January, it agreed to buy CanniMed Therapeutics Inc. for $1 billion.

Canada is now home to over 90 publicly-listed marijuana producers collectively valued at more than $31 billion. The top-24 producers capture about 88% of that market. The biggest pot stocks are listed on the Canadian Marijuana Index, which is nearly four times bigger than the U.S. index despite America being ten times greater in size.

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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4.6 stars on average, based on 604 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.

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.

“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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4.6 stars on average, based on 604 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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