Cannabis stock report: Hemp bill passes House, awaits signature from President Trump
The North American Marijuana Index fell in midday trading on Thursday following the final passage in the House of the farm bill. The bill, which legalizes hemp and is set to open up the CBD industry in the United States passed the lower chamber with bipartisan support, 369 to 47. It now heads to President Donald Trump’s desk to await his signature, where, barring any unforeseen circumstances, the bill should become law.
The bill, which is usually attributed to Sen. Mitch McConnell of Kentucky, was the brainchild of four senators including McConnell — Sens. Rand Paul, Jeff Merkley, and Ron Wyden helped introduce the bill earlier this year. Far from being an advocate for saner marijuana laws, McConnell hopes the bill will bring more jobs to his home state, especially as tobacco farming dwindles.
“[I hope hemp] can become sometime in the future what tobacco was in Kentucky’s past,” said McConnell of the bill recently.
At a time when farm income is down and growers are struggling, industrial hemp is a bright spot of agriculture’s future. My provision in the Farm Bill will not only legalize domestic hemp, but it will also allow state departments of agriculture to be responsible for its oversight
— Leader McConnell (@senatemajldr) December 11, 2018
Currently, farmers face a bevy of restrictions when it comes to growing hemp, including limited access to banking, water rights, and crop insurance. The new bill rectifies that and more, opening up the CBD industry`to bring in billions in revenue as well as in new investments on the market.
The North American Marijuana Index slid 13.41 points by midday Thursday, a decline of 5.56 percent with the United States Marijuana Index down 6.8 points and the Canadian Index falling 22.08 points or 4.33 percent.
The benchmark Horizon’s Marijuana Life Sciences ETF was down CA$0.73 ($0.55) in midday trading on Thursday, hovering at CA$15.76 ($11.81). Meanwhile, the ETFMG Alternative Harvest ETF (MJ) was down $1.18, or 4.16 percent trading at $27.21.
Meanwhile in the market…
Wall Street continued its slide on Thursday as stocks fell in midday trading, a result of continued investor worry over a potential drawn-out trade war with China. Early news seemed positive as China resumed purchase of American soybeans, a commodity they have avoided after purchasing $14 billion worth the previous year. China ended up buying more than 1.5 million metric tons of soybeans in the past 24 hours, though it wasn’t enough to help the market.
Trade tensions have caused volatility in the equities markets as well, with the S&P 500 down 9.5 percent from where it was in mid-September.
“This might seem obvious, but the main headwind to equity markets in recent months has been an increase in the equity risk premium, or the compensation investors demand for holding equities over Treasuries,” Neil Dutta, head of economics for Renaissance Macro Research, wrote in a note, according to a piece in Yahoo Finance. “Recent headlines – trade war détente – will likely put some downward pressure on the equity risk premium and some upward pressure on Treasury yields.”
The S&P 500 fell 0.33 percent or 8.72 points, as of midday, while the Dow dropped 0.08 percent or 18.68 points. The Nasdaq fell 0.68 percent or 47.45 points.
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Forget Cronos, buy Canopy says Cramer
“Mad Money” host Jim Cramer told viewers that Canopy Growth Corp. (TSX:WEED) (NYSE:CGC) is still the better play on the market despite Altria Group’s recent $1.8 billion investment in the company last week. Although Altria’s move was a smart one for the tobacco giant, cannabis investors will find themselves making more money with Canopy over the long run, he argued.
— Mad Money On CNBC (@MadMoneyOnCNBC) December 12, 2018
"Even with Altria investing in Cronos, I believe that Canopy Growth remains the best way to play the Canadian cannabis market," said Cramer on Tuesday.
"Can Cronos compare to Canopy Growth? Honestly, it isn't really a fair comparison," he said. "Canopy's significantly larger than Cronos — we're talking about an $11.4 billion company versus a $2.3 billion company. Canopy's got scale, and scale matters in this business."
HEXO’s first quarter results
HEXO Corp. (TSX:HEXO) reported financial results for the first quarter of 2019, with gross revenue reaching $6.7 million, including $5.2 million of cannabis sales in the first two weeks following the legalization of recreational cannabis in Canada. Highlights of the quarter also included the creation of Truss, which the company calls a partnership with Molson Coors Canada supporting their objective to partner with Fortune 500 companies in various product platforms.
“HEXO hit tremendous milestones in the weeks following the legalization of adult-use cannabis,” said HEXO’s CEO and co-founder Sebastien St-Louis in a statement. “The Company continues to [honor] its commitment to executing on its plans, which has led to a significant portion of our first quarter’s $6.7 million in revenue generated in just two weeks and represents more than a 500 percent increase over last quarter.”
Who’s up and who’s down...
Innovative Industrial Properties Inc. (IIPR) is up $1.36 per share or 2.69 percent at $52.00… Auxly Cannabis Group Inc. (XLY:CA) gained $0.005 per share a 0.63 percent increase at $0.795.
MariMed Inc. (MRMD) fell $0.5225 per share, a decline of 15.49 percent to trade at $2.85… CV Sciences Inc. (CVSI) fell $0.675 per share, a decline of 12.52 percent to trade at $4.715.
Take a look as Aurora Cannabis’ (NYSE:ACB) Cam Battley shares a look from the tower atop Aurora sky...