Marijuana News Today: Lawmakers Seek to End Threat of U.S. Crackdown on Pot

Marijuana News Today

It’s bright all around in the marijuana news today as we have two impressive stock gains on the pot stock market while lawmakers in the U.S. seek to end the threat of a U.S. marijuana crackdown once and for all.

Congress introduced a bill—the Strengthening the Tenth Amendment Through Entrusting States Act (STATES Act)—that would essentially strip the federal government of the right to enforce its marijuana laws in states where pot is legal. (Source: “Lawmakers Roll Out ‘Landmark’ Bill To Protect Legal Marijuana States From Federal Interference,” Marijuana Moment, April 4, 2019.)

This has long been an ax swinging over the head of legal marijuana in the United States. Any day, the federal government could step in and shut things down immediately through preemption, whereby federal law supersedes state law.

But if this bill were to pass, that threat would evaporate overnight and leave the U.S. marijuana market safer than it has ever been.

Furthermore, this could be a huge help to Canadian marijuana stocks as well.

You see, many of the larger pot companies had holdings in the U.S. but were forced to divest from them or face delisting from the Toronto Stock Exchange (TSE), due to the legal conflict between state law and federal law in the United States.

The TSE didn’t want companies on its listing dealing in technically illegal goods, and instituted the new policy.

If this bill becomes law, however, the TSE may change its attitude and relax its policy on U.S. marijuana holdings. That would then allow Canadian companies on the exchange to enter the U.S. marijuana market in states where it is legal.

Combine that potential outcome with the very real present where Canadian marijuana stocks are looking to enter the market via the newly legalized cannabidiol (CBD), and you have a potent one-two punch combination that could see the first real forays into the American cannabis sector.

Remember, this is the true target of all marijuana companies: to enter the largest and richest market on earth. While we’re not quite near legal marijuana in the U.S. yet, we’re seeing healthy progress made toward that goal every day.

The marijuana news today is no outlier.

ACB Stock

Aurora Cannabis Inc (NYSE:ACB) is flying high in the marijuana news today after it announced that it had scored a major win in the German marijuana market. ACB stock gained over two percent in early-morning trading today, and finds itself breaking even over the past five days.

Today’s healthy gain came after the German Federal Institute for Drugs and Medical Devices selected Aurora as one of three winners in the public tender to cultivate and distribute medical cannabis in Germany.

The deal will see Aurora supply a minimum 4,000 kilograms (over 8,800 pounds) over a period of four years. The cannabis produced will be sold to the German government and supplied to wholesalers for distribution to pharmacies.

Chief Global Business Development Officer Neil Belot said:

Having the highest rated concept is a strong validation of the Aurora Standard cultivation philosophy, as well as of our track record in the delivery of safe and high-quality medical cannabis products to the German system.

(Source: “Aurora Cannabis Awarded Maximum Number of Lots in German Cannabis Production Tender,” Cision, April 5, 2019.)

At the top, we discussed the potential in the U.S. marijuana market, but Germany is probably the second most coveted market in the Western world.

With both a high population and a lot of money, Germany is an exciting place to do business when it comes to marijuana.

Legal pot remains an aspiration there, but the country is opening up to outside companies via its legalized medical marijuana sector.

It will be a huge boon for years to come to have a foot in the medical marijuana market in Germany. Not to mention that ACB stock will also now have an advantage in the legal German market when it eventually does legalize.

CTST Stock

Another company doing very well at the end of the week is CannTrust Holdings Inc (NYSE:CTST). CannTrust stock jumped three percent in early-morning trading today and is down about one point over the past five days.

That’s a healthy return to form after the company’s weak financial numbers sent share prices sinking last week.

What we’re watching now with CannTrust is how the company recovers (if at all.)

I hesitate to say that CTST stock is guaranteed to rebound. While it does have several impressive features, the company posted among the worst numbers of all major marijuana companies in the last quarter—and that weakness is reflected in its precipitous drop in stock price.

The company is by no means sunk, and today may be the start of a major rally. In fact, I do believe that CannTrust will recover quickly from this fall. But my concern is that, if the next quarterly report falls below expectations, it will be devastating to CTST stock.

As a result, I believe that CTST is one of the more volatile stocks on the market right now, with big upside but also with the potential to go south, fast.

ACB and CTST Stock Performances

The performances of ACB stock (black line) and CTST stock (blue line) over the past week are seen on the chart below.

Chart courtesy of StockCharts.com

Analyst Take

The marijuana news today was generally positive as we head into the weekend.

A major marijuana reform bill—backed by several major Democratic presidential hopefuls—was proposed that would see the threat of a U.S. marijuana crackdown officially die.

On the pot stock market, we witnessed some healthy rallies in early-morning trading from both ACB stock and CTST stock.

Aurora scored a big win with a German supply contract, while CannTrust hopes to move on from a dismal week.