Marijuana News Today: Revitalization Oncoming for Medical Pot Stocks
Marijuana Business, Stocks, Finance, & Investing October 30, 2019 MJ Shareholders 0
Marijuana News Today
The marijuana news today has us excited about the future of the industry as many pot stocks look to be gearing up for strong comebacks.
The first place that’s likely to produce a resurgence in marijuana stock value, at least in the near term, is the medical marijuana sector.
Medical pot has seen a drop in interest ever since legal recreational cannabis became more commonplace. Canada and 11 U.S. states (as well as Washington D.C.) have legalized recreational marijuana, with many investors focusing on this new burgeoning market instead of the older, more mature medical cannabis market.
It only makes sense that the newer and more exciting recreational marijuana sector sucked all the oxygen out of the room the second it entered the stock market, but to completely forget about medical marijuana would be a mistake.
Several states that have legalized both recreational and medical cannabis have seen a fall or tapering off in the medical pot business. That would lead many to believe that the real money now lies in recreational marijuana, with medical marijuana being a thing of the past.
But if that were the truth, we’d see marijuana companies turning their resources away from medical cannabis. But in fact, for many companies, the opposite is true: they are pouring more money into medical marijuana. (Source: “Demise of medical cannabis markets might be much ado about nothing,” Marijuana Business Daily, October 29, 2019.)
The reason for this is simple: we haven’t even gotten close to completely exploring the medical pot market.
Consider that there is only one cannabis-derived Food and Drug Administration (FDA)-approved drug for prescription in the U.S.: Epidiolex. That drug has grown in popularity and has been a success for GW Pharmaceuticals PLC (NASDAQ:GWPH).
But, again, that is the first and only offering so far to come out of the U.S. medical cannabis sector.
The main reason for the dearth of medical marijuana products in the U.S. has to do with marijuana’s classification in the eyes of the federal government.
As a Schedule I drug, that means the government considers marijuana to have no beneficial medicinal effects whatsoever. We know that is likely false, but at the moment, the U.S. is operating under those guidelines, thus making medical cannabis difficult to deploy in the market.
The winds of change are here, however, and many politicians in the U.S. have come out with full-throated support of marijuana reform, starting with the de-scheduling of the drug.
Once that change takes place, expect to see many companies accelerate their medical-marijuana plans.
After all, the possibilities for medical cannabis are myriad. From pain management, to stress relief, to treating PTSD, there are a number of studies that have shown the drug to be an effective treatment.
To be fair, several studies have shown the substance to have little or no effect on certain ailments, but the point remains: medical marijuana still demands a lot more exploration before we can deem it tapped out.
As such, medical cannabis stocks are poised to surge when their companies can finally begin releasing their products in the U.S. and abroad.
The marijuana news today is also relatively positive on the pot stock market, as a couple of our old favorites are showing signs of life.
While the marijuana stock market has declined severely over the past few months, there’s little doubt in my mind that this is a temporary setback.
There’s so much potential left in the marijuana industry that buying the dip could be a huge win for investors who missed out on the exponential gains that were experienced several times over the past year.
OrganiGram Holdings Inc (NASDAQ:OGI), for instance, seems well positioned to take advantage of the weaker market and see quick gains during the marijuana stock recovery.
OGI stock jumped nearly three percent in early-morning trading today. While the stock is down more than three percent over the past five days, I believe the future is bright for OrganiGram stock.
This is a stock that was largely considered undervalued back when it was trading at $6.00 a share. Now that it’s at $3.50, I consider it a steal.
And I’m not alone in thinking this; several hedge funds have begun looking into OGI stock, whereas before, almost none of them were interested.
That signals to me that the stock market is expecting big things from OrganiGram stock.
The decline is of course worrying, but OGI stock has all the fundamentals in place to stage a strong comeback.
All that investors need to do is be patient and wait for an industry-driving event to take place. Whether that’s marijuana reform in the U.S. or abroad, or major investments into the industry, I’m convinced that OrganiGram stock is going to be very profitable in the coming years.
Another pot stock that has fallen on hard times but is looking stronger by the day is Canopy Growth Corp (NYSE:CGC). Canopy Growth stock remained flat in early-morning trading today and is down about six percent over the past five days.
But don’t be fooled; there’s still a lot to like about CGC stock.
Almost everything that made Canopy Growth stock such a winner at the beginning of 2019 is still intact, alongside some newer boons that make the company all the more attractive.
Canopy Growth is looking to continue exploring the Canadian marijuana market by releasing roughly 30 new cannabis-infused products before 2020. (Source: “30 next-generation pot products coming soon, Canopy Growth says,” CTV News, October 29, 2019.)
This includes distilled cannabis to be used in drinks. Cannabis-infused beverages are among the more exciting products to be introduced.
The company is also going to release edibles and other products across Canada, with different provincial regulations staggering the products’ release dates.
“What you’ll see is our new products will come to market on retail shelves across late December, early January, based on the province,” said Canopy Growth president Rade Kovacevic. (Source: Ibid.)
This is a fantastic chance for Canopy Growth to grow its consumer base and rake in higher revenue for its next quarterly report, juicing share prices and helping to restore confidence in the industry.
Moves like this, while not likely to rescue the whole marijuana stock market, have the ability to stop the bleeding and revitalize share growth while we wait for the pot stock recovery.
OGI & CGC Stock Performances
The performances of OGI stock (black line) and CGC stock (blue line) over the past week are seen in the chart below:
Chart courtesy of StockCharts.com
The marijuana news today is quite positive for the future of pot stocks.
A marijuana stock recovery is coming, and whether it derives from a medical pot breakthrough or from U.S. marijuana law reform, the result will likely be the same: big gains for pot stock investors.
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