Marijuana News Today
In the marijuana news today we have the U.S. Food and Drug Administration (FDA) once more coming out in support of the healing effects of medical marijuana, this time in response to an anti-pot group’s petition to place more severe restrictions on weed.
The anti-pot group, Drug Watch International, wanted to have marijuana and its derivatives placed on a list of restricted substances that are not “generally recognized as safe and effective.” (Source: “FDA Rejects Petition To Further Restrict Marijuana,” Forbes, July 5, 2018.)
The FDA’s response was clear: no.
The move is, “not necessary for the protection of public health,” Janet Woodcock, the director of FDA’s Center for Drug Evaluation and Research, wrote in a letter to the group.
Drug Watch International had first filed the petition in December, hoping to inspire a U.S. marijuana crackdown that has been feared in the industry ever since U.S. Attorney General Jeff Sessions assumed office with his draconian views on marijuana.
The organization wrote that the crackdown would, “send an industry-wide warning to the estimated 33,000 marijuana businesses in the U.S., many of which are making unsupported medical claims for marijuana and THC drug products sold as ‘medical marijuana.’”
But the FDA said “no thanks” and once more came out on the side of marijuana. And that’s great news for the future of marijuana legalization in the U.S.
Let’s perform a quick tally of all the political wins for pot in America over the year:
- President Donald Trump came out in support of states’ rights when it comes to U.S. marijuana legalization, assuaging fears of a U.S. marijuana crackdown
- Multiple senators, several of whom are pegged as presidential hopefuls on the Democrat side, voiced their support for marijuana reform
- Republicans have come out in support of marijuana reform (mainly retired politicians, but still a huge win for U.S. marijuana legalization)
- Sessions has been unable to institute any major U.S. crackdown on marijuana, being largely toothless in his role
- The vast majority of Americans support marijuana legalization in both medical and recreational forms
- More states are legalizing marijuana across the Union
- Vermont was the first state to legalize marijuana through a legislative vote rather than a referendum, showing growing political will to move on the issue
It is no understatement to say that this is the closest the U.S. has ever been to marijuana legalization, and that should have marijuana bulls salivating.
The FDA itself recently approved “Epidiolex” for prescription use in the U.S. That marks the first time ever that a cannabis-derived drug has been approved for use.
While we are still several years from seeing marijuana legislation take effect on a federal level, the marijuana news today only strengthens what we know to be true: the needle is moving in the right direction.
It is inevitable that the U.S. marijuana legalization will hit. When it does, we’re going to see another boom in the marijuana stock market, not unlike when Canada announced legalization plans.
Of course, the magnitude of that boom will be far larger due to the U.S.’s size and market potential.
Today, then, marks another victory for the long-term viability of marijuana stocks.
Marijuana News Today: CGC Stock
The marijuana news today is, as it has been for the past several months, very positive on the political side of things. But as we’ve seen before, that doesn’t always translate into success on the pot stock market.
Chart courtesy of StockCharts.com
This week is ending on a weak note, with the industry down across the board a few percentage points.
Canopy Growth Corp (NYSE:CGC) has fallen three percent since the beginning of the week, with about one percent of that fall occurring in early morning trading on Friday.
That is to be expected and in line with what I anticipated for this week. I predicted that we would see little movement in the marijuana industry, with either muted gains or modest losses of a few percentage points taking place.
While marijuana bulls hardly want to see these stocks down, considering the volatility of the last weeks, with double-digit gains and losses in a few short days, a three-percent decline is at least a result that won’t make your head spin.
I expect the stock to bounce back next week with a similarly muted climb, perhaps gaining a point or two as the industry consolidates in anticipation of the next big breakout.
One company that I was rather optimistic about this week, Cronos Group Inc (NASDAQ:CRON), ended up performing much more in keeping with the industry than I would have thought.
CRON stock had been on a decent run in the middle of the week, up several points. But that came crashing down to end the week, and now the stock is finishing down about two percent.
The company has had the ability to buck industry trends in the past, but it seems that this week, it ended up falling into the same groove as its competitors.
I’m still skeptical of the long-term viability of CRON stock, but do see its value as a hedge bet in that it can at times run counter to the industry in its stock patterns.
Aurora Cannabis Stock
Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB) fared the worst among the three this week, down about four percent since Monday. This is again not to be unexpected, although it is a harsher decline than I had anticipated.
I had put the top end of the drawback at about three percent, so passing that threshold isn’t a great sign. But at the same time, I expect these losses to be temporary and for either next week or the near-future to see the gains return.
The wins keep racking up for U.S. marijuana legalization, and the marijuana news today is no different.
It now seems that the FDA—an FDA under President Trump, no less—is, if not pro-marijuana, at the very least not anti-pot either. This is a huge departure from the worst-case-scenario many naysayers envisioned when Trump first assumed office.
Meanwhile, the political movement backing U.S. marijuana legalization only continues to grow.
The pot stock market, on the other hand, had a weak performance over the past few days, but it’s nothing to lose your head over.
I expected a few percentage points to be given back this week, and it is perfectly in keeping with a slower holiday week following the extreme volatility of late June.