Marijuana News Today: Pot Stocks Closely Watching Canadian Regulation

Marijuana News Today

Regulations continue to be hammered out in Canada regarding the weed industry in the marijuana news today, with pot stocks watching intently to see how it will turn out.

It seems that news trends happen in waves in the marijuana business, and I’ve recently been focused on the regulations that are continuing to take form in Canada.

The next battle for pot comes by way of marketing, where regulators are deciding whether marijuana ought to be treated like cigarettes—which is to say, almost no marketing allowed of any kind—or like alcohol, which has far fewer restrictions on it in terms of advertising.

It would make the most sense, at least from my perspective, to give it at least as much leeway as alcohol. After all, many studies have pointed out the fact that marijuana is likely far less hazardous to one’s health than booze. Furthermore, it is not nearly as addictive or deleterious as smoking.

But in Canada, it appears that regulators are of a different opinion. Health Canada’s new regulations on packaging released coinciding with its official rules and timetables on cannabis edibles. (Source: “Marijuana-infused drinks maker disappointed with generic packaging rules,” CBC, June 17, 2019.)

The new rules detail strict limitations on packaging, including limits being placed on brand logos and descriptions of products.

This, naturally, did not go over well with the industry. After all, it does appear to be an overreaction to a legalized marijuana sector which is being treated overly harsh.

Now, I will provide this caveat: edibles are a different beast. While all marijuana products do require the consumer to be of age, edibles are going to be the easiest for young people to accidentally imbibe.

Still, the reaction is an addition to a long patter of overreaching policies that have served to hinder marijuana growth while also allowing the black market to flourish.

That’s worth noting as many grey market operators (marijuana sellers that have storefronts and very much seem legitimate but are technically illegal) have to follow no such regulations.

It’s again another blow against marijuana producers who follow the rules and a boon to those who operate outside the law.

Furthermore, from a long-term perspective, this could end up benefiting U.S. marijuana stocks to the detriment of Canadian ones.

You see, while the U.S. is still several years away at they very least from marijuana legalization, one benefit to the delay is that it will be able to craft its laws with the Canadian experiment having been underway for years. That means that it can select the regulations it likes and work and discard those that don’t.

The upshot to this process is that the U.S. may end up with the most marijuana-friendly legalization in the world. This would make the American market that much more lucrative for pot stocks, but it may also benefit U.S. pot stocks over Canadian producers.

Considering there will be a showdown between the two countries for dominance in the industry—at least, that’s what I’m predicting the years ahead)—ultimately it will come down to which country is more cannabis-friendly, and regulatory burdens or lack thereof will play huge roles in deciding which country wins out.

OGI Stock

The marijuana news today as it pertains to the pot stock market is slightly positive, even if we have been going through a rough time as of late.

Many marijuana stocks have suffered in recent weeks as the first real downturn of 2019 has struck.

Pot stocks have been flagging for a bit now, with May especially having been a bad month. June has been up and down so far, but on the whole has been a weak performance for the industry.

Which brings us to one of those weaker performers, OrganiGram Holdings Inc (NASDAQ:OGI).

Long touted as one of my favorite pot stocks (where it remains), the recent weeks have not been kind to OGI stock.

While it did gain over three percent in early morning trading, the company saw declines of 11% over the past five days.

Much of this has to do with the valuation of OGI stock. Marijuana penny stocks are often the hardest hit when the industry turns, and we’re seeing that take place now.

On the flip side, they are often the fastest to recover. Or at least, if not fastest, they often see the biggest upswing following pullbacks.

The company switched over to the Nasdaq at an inopportune time, with the change not having the desired impact on the stock that I had hoped. Instead, due to the industry largely slowing down, it hasn’t done much for OrganiGram Holdings Inc in the short-term. But I believe that will change.

In any case, I have all the confidence in the world that OGI stock will bounce back. It will just require a little bit of white-knuckling and some patience.

CGC Stock

The opposite of a marijuana penny stock, ol’ reliable Canopy Growth Corp (NYSE:CGC) continues to demonstrate why it is such an impressive performer in the marijuana stock market.

CGC stock gained over a point in early morning trading, while having lost one percent over the past five days.

While not a stellar showing by any means, it is stable. Most pot stocks over that same time period have seen major fluctuations in value, whereas CGC stock has been relatively steady.

Sure, Canopy has taken a hit like many other companies, but that hit hasn’t been nearly as severe as it has in other areas of the market.

As such, for those marijuana investors who want to enjoy the riches of the cannabis trade without the headache of extreme volatility, Canopy Growth Corp may be the one for you.

OGI and CGC Stock Performances

The performances of OGI stock (black line) and CGC stock (blue line) over the past week are seen on the chart below:

Chart courtesy of StockCharts.com

Analyst Take

The marijuana industry continues to be shaped before our very eyes, and the marijuana news today shows how that will impact the future of the industry.

Depending on how these regulations and laws do eventually shake out, we will see a seismic reshaping of the pot sector depending on which regulations are adopted and which are forgotten.