Marijuana News Today: Pot Stocks Rally Following New Jersey Pot Legalization Proposal

Marijuana News Today

The week started off quiet for pot stocks but has turned around with a fury. The marijuana news today sees huge gains across the industry following a New Jersey marijuana legalization plan being presented. Meanwhile, Aurora Cannabis stock soared after the company brought on a billionaire activist investor as an advisor.

First, we’ll cover the politics.

Marijuana legalization in the U.S. was certain to expand in 2019—much like it did in 2018. Several states are signaling their intention to legalize pot, with New Jersey being the latest to make a big push.

The Garden State is looking to become the 11th state to legalize marijuana in the U.S. if legislation is passed. And there are good odds that it will—provided we don’t see a major public backlash.

The New Jersey State Congress is controlled by Democrats, as is the Governor’s Mansion. The bill in question, in fact, was proposed by the governor himself, Phil Murphy.

“Legalizing adult-use marijuana is a monumental step to reducing disparities in our criminal justice system,” said Murphy. “After months of hard work and thoughtful negotiations, I’m thrilled to announce an agreement with my partners in the Legislature on the broad outlines of adult-use marijuana legislation.” (Source: “Marijuana stocks rally after New Jersey governor, lawmakers unveil plan for legal weed,” CNBC, March 12, 2019.)

The legislation also outlines the taxation policy for cannabis, with a two-percent tax on cannabis products for municipalities that house cultivators or distributors within their jurisdiction. Cities and townships that house retailers will receive revenue of three-percent tax on products sold, while growing cannabis would be hit by a $42.00-per-ounce tax.

The taxes are very important to the future of cannabis, as we’ve seen black markets thrive despite marijuana legalization in several regions due to high taxes causing cannabis prices to inflate relative to the black market.

This is a problem that lawmakers will have to deal with, finding that sweet spot between added revenue for the state while also keeping prices low enough that consumers don’t simply turn to the cheaper black market pot.

All things considered, however, this is another major victory for marijuana.

Remember that U.S. marijuana legalization up to this point has been primarily initiated through direct referendums. If New Jersey marijuana legalization is passed by its legislature, that would be just the second time that we’ve seen politicians lead the charge on weed instead of waiting for the public to vote on the issue first.

What this shows is that marijuana is quickly becoming a mainstream issue with mainstream support. Politicians rarely do anything without ensuring that it will increase their electability, which only reinforces the point that I’ve been making for months now: marijuana is gaining widespread acceptance and U.S. marijuana legalization on a federal level is not far behind.

While roadblocks still exist, ultimately, we’re as close as we’ve ever been to pot legalization in the United States. When that hits, pot stocks will see gains that will make your mouth water.

ACB Stock

Aside from the New Jersey marijuana legalization proposal making headlines in the marijuana news today, we have Aurora Cannabis Inc (NYSE:ACB) making big waves with its addition of activist billionaire investor Nelson Peltz as an advisor.

ACB stock surged following the announcement, gaining 10% in early-morning trading today and gaining more than 12% over the past five days.

Peltz will “work collaboratively and strategically to explore potential partnerships that would be the optimal strategic fit for successful entry into each of Aurora’s contemplated market segments,” said Aurora in a press release. (Source: “Aurora Cannabis up 15% after billionaire activist investor Nelson Peltz is hired as an advisor,” CNBC, March 12, 2019.)

“I believe Aurora has a solid execution track record, is strongly differentiated from its peers, has achieved integration throughout the value chain and is poised to go to the next level across a range of industry verticals,” said Peltz in the release.

Peltz is a respected figure on Wall Street for his investing prowess. Being an activist investor, expect him to make a big mark on Aurora Cannabis as he tries to angle it toward gains.

This is another sign that the marijuana industry is maturing quickly from an emerging industry to an established one, with plenty of gains to be had during the transition.

ACB stock, as usual, remains one of my top marijuana stock picks.

HEXO Stock

Another big name making waves in the marijuana news today is Hexo Corp (NYSEAMERICAN:HEXO). This morning, the company announced its acquisition of Newstrike Brands Ltd (OTCMKTS:NWKRF, CVE:HIP).

The deal will see the Hexo’s production capacity expand while also putting it firmly in eight Canadian provinces. (Source: “HEXO Corp to acquire Newstrike Brands Ltd.,” Globe Newswire, March 13, 2019.)

The company will also gain access to an indoor facility that will again help boost production capacity.

Newstrike is based in Toronto, giving the Quebec-based Hexo a better foothold in Canada’s largest market.

HEXO stock climbed by more than three percent in early-morning trading today, while the stock has gained five percent over the past five days.

This is another solid win for a marijuana stock I was already bullish on before, signaling that HEXO stock will remain one of the stronger players in 2019.

CRON Stock

With the news so replete with good tidings, gains were seen across the legal cannabis industry—even among companies that didn’t make any major moves today.

Cronos Group Inc (NASDAQ:CRON) was one of the biggest beneficiaries. CRON stock gained three percent in early-morning trading today, offsetting what has otherwise been a tough few days, with the company seeing a drop of three percent over the past five days.

Cronos stock is still strongly positioned, however.

Just last week the company closed a deal with Altria Group Inc (NYSE:MO), maker of “Marlboro” cigarettes. The move will see Altria likely assume full control of Cronos in the coming years, with the tobacco giant already claiming a huge chunk—45%—upon completion of the deal.

The deal was heralded as a huge win for CRON stock and has played no small part in the stock’s excellent run this year. In any case, I am still very bullish on CRON stock.

ACB, HEXO, and CRON Stock Performances

The performances of ACB stock (black line), HEXO stock (blue line), and CRON stock (red line) over the past week are seen on the chart below:

Chart courtesy of StockCharts.com

Analyst Take

The marijuana news today has me excited about the future of pot.

New Jersey marijuana legalization is likely to be the next domino to fall in the growing pile of U.S. states where pot is legal. Better yet, the politicians are taking up the task themselves rather than deferring the decision to the people through a direct vote. That speaks to the newfound acceptance of weed among the electorate.

On the marijuana stock market, we saw ACB stock and HEXO stock lead the pack this morning with big upward moves, while the industry in general has been seeing a surge today.