Marijuana News Today
The marijuana news today reveals that due to research and development in the pot industry, the next big breakout may not come from a board room decision, but rather, from a lab discovery.
As the industry continues to mature, we’re going to see innovations in growing techniques and strains of marijuana become a huge front in the battle for companies to differentiate their products.
At the moment, there’s not really too much difference between the various marijuana growers, each using widely considered best practices when it comes to pot growing. But with more money flooding the industry than ever, expect that to change.
Growers are now putting big money into finding ways to innovate their growing techniques in order to gain a competitive edge. Canopy Growth Corp (NYSE:CGC), for instance, nearly doubled its research and development spending from CA$810.0 million during its fiscal year 2017 to CA$1.5.0 billion the following year. (Source: “Marijuana legalization spurs R&D efforts among growers, academia,” Globe and Mail, November 18, 2018.)
And that investment has borne fruit—or rather, borne bud.
Canopy Growth says that new research and growing techniques have led to a double-digit increase in yield over the past two years.
Now that Canada has legalized marijuana across the board, we’re also seeing academia enter the fray when it comes to weed research.
The University of New Brunswick in Canada recently appointed Yang Qu, a plant biochemist, as its cannabis chair. This is believed to be the first such position in Canada. And a few days prior to that, OrganiGram Holdings Inc (OTCMKTS:OGRMF, CVE:OGI) partnered with Moncton University for a three-year research partnership.
David Joly, a biology professor at Moncton University biology professor and co-leader of the research project, said that if they could shave even one day off the growing cycle (which right now takes about three months) OrganiGram estimates that it would save CA$3,000.0 per round in each of its 50 grow rooms. (Source: Ibid.)
“Even if we keep the same amount of growing time, we could also increase the amount of plant material that is produced, either with more buds or the same amount of buds but with a higher or more consistent level of THC,” Joly said.
For a marijuana industry that is flagging at the moment, a breakthrough in the lab could translate to huge gains on the market.
But apart from the near-term benefits rigorous research could yield, this will also be an important battleground for pot stocks for years to come.
The company that can develop the best methods for growing will be able to create more for less while increasing the potency of its batches. This is guaranteed to be reflected in the company’s earnings reports, and therefore translate into growth on the stock market.
The marijuana news today on the pot stock market is a mixed bag, with small gains and losses hitting unevenly across the industry.
One company that came out on top, however, is Tilray Inc (NASDAQ:TLRY).
Tilray stock jumped about four percent in early morning trading and finds itself breaking even over the past five days.
While those are not numbers that will make your head spin, considering the alternative, they’re quite impressive.
Many companies—even industry and personal favorites like Canopy Growth Corp—have been hit hard over recent weeks due to the industry-wide pullback.
TLRY stock has, up to this point, been one of the least-affected marijuana stocks. There are a number of reasons for why it has been able to remain relatively unscathed, but the primary one in my mind is the company’s presence on the Nasdaq.
While more and more pot stocks are flocking to the New York Stock Exchange (NYSE), the Nasdaq remains bereft of pot stocks.
For whatever reason, the NYSE is the preferred destination for marijuana stocks, even if the companies with Nasdaq listings appear to be weathering this storm better than most.
This is likely due to the diversified investors on the Nasdaq. Being largely interested in tech, Nasdaq investors are more prone to taking risks on nascent industries with huge potential for growth—and for volatility.
The NYSE is a more varied listing, with older and more stable industries, making it a more risk-adverse market in general.
We’re seeing that play out in real time as TLRY stock outperforms its competitors.
I anticipate that Tilray stock will remain one of the stronger ones throughout this correction, making it an ironically safer pick due to volatility on the Nasdaq being more common.
I still have my doubts about the future of the company, but for now it seems to be in good shape.
Speaking of winners on the Nasdaq, don’t forget Cronos Group Inc (NASDAQ:CRON).
CRON stock rose about three percent to start the day and, much like Tilray, has broken even over the past five days.
CRON stock is the only other pure-play marijuana stock on the Nasdaq, and its recent performance is very similar to that of Tilray.
While they follow similar trend lines to the marijuana industry as a whole, they’ve been able to see to higher gains and lower losses over the past month.
One event in particular played out better for CRON stock and Tilray stock compared to their competitors: the firing of Attorney General Jeff Sessions.
I’ve written at length about the drug crusader and his threatening of the marijuana market, but with him gone, the industry was able to breathe a collective sigh of relief.
Only that relief was not felt evenly. The two Nasdaq stocks saw their fortunes rise much higher compared to other companies.
While the increased volatility isn’t always welcome, in this case it is the saving grace for TLRY stock and CRON stock.
To diverge from the Nasdaq, we have Aphria Inc (NYSE:APHA).
While APHA stock is up about two percent on the day, it is down big over the past five. APHA stock dropped over 10% in that period.
This speaks to the growing disparity between Nasdaq and NYSE stocks. APHA stock recently found itself listed on the NYSE, with little to no fanfare accompanying the switch.
Compare that to the explosion in value that greeted Tilray (admittedly this was an initial public offering versus a new listing) and the difference is staggering.
Mitigating factors aside, it appears that the Nasdaq has a lot more interest in pot than does the NYSE.
APHA stock, meanwhile, continues to lag behind many of its competitors on the market and has had a down year in 2018 overall.
I’ve long since lost patience with APHA stock and believe that it has a long way to go before it can regain my confidence. As such, I would steer clear of APHA stock for now.
TLRY, CRON, APHA Stock Performances
The TLRY stock (black line), CRON stock (blue line) and APHA stock (red line) performances from the past week are seen on the chart below:
Chart courtesy of StockCharts.com
The marijuana news today shows a maturing industry.
On the pot stock market, we’re seeing that the two major U.S. exchanges are leading to different results for pot stocks, perhaps signalling where they ought to land in the future.
In the marijuana news today we have scientists pitching in to help revolutionize the industry through innovation, which will no doubt play a big part in the both the short-term and long-term prospects of marijuana companies.
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