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Cannabis Stock Report: Want To See My Marijuana Stocks On The Cover of The Rollin’ Stone

The North American Marijuana Index fell again on Tuesday as pot stocks defied what some in the press dubbed “Legal Marijuana’s Big Moment.”  As Washington’s political class continues to ritually evolve on the current wedge issue of the moment, capturing what little attention span mainstream media has for such spectacle, cannabis stocks continue to confound analysts and industry insiders as the sector sheds value on both sides of the U.S.-Canadian border. As the U.S. inches closer to legalization than any time since the late 1970’s, and with Canadian legalization all but assured later this year, cannabis stocks continue to disappoint. The Index fell 0.73 points, or 0.12 percent, to close out the day at 631.31.

The United States Marijuana Index dipped 2.71 points, or 2.98 percent, to end Tuesday at 88.09, while the Canadian Marijuana Index fell 0.73 points, or 0.12 percent, to close out the day at 631.31.

[The CannaLogic Solution To Marijuana Dispensary System Software: Part One Of An Exclusive Interview With CEO Ronny Kadarishko]

MJIC Inc. announced on Tuesday the completion of its quarterly rebalancing of the index, adding two companies to each the U.S. and Canadian indices respectively. On the U.S. side, MJIC added General Cannabis Corp. (OTC:CANN) and Liberty Health Sciences Inc. (CSE:LHS) (OTC:LHSIF) while across the border on the Canadian Index Hiku Brands Company Ltd. (CSE:HIKU) (OTC:DJACF) and Isodiol International Inc. (CSE:ISOL) (OTC:ISOLF) were added. According to a statement, the Index now has 43 constituents, with the U.S. Marijuana Index claiming 17 constituents and the Canadian Marijuana Index 26 constituents.

Wall Street fell dramatically on Tuesday, with the U.S. 10-year Treasury yield hitting three percent for the first time in over four years. The yield is a benchmark for global borrowing costs which has risen as investor worry grows over inflation, debt supply, and the borrowing costs of the Federal Reserve. Higher costs warnings came on Tuesday from companies such as Lockheed, 3M, and Caterpillar.

10 year
U.S. 10 Year Treasury Yield Source/Bloomberg

"It makes borrowing costs more expensive for corporations. This market rally for the last nine years has been driven by low-interest rates, accommodating monetary policy and excess liquidity," said Oliver Pursche, chief market strategist for Bruderman Asset Management in an interview with Reuters.

[Marijuana Stocks Winners and Losers Tuesday, April 24, 2018]

The Dow Jones Industrial Average dropped 424.56 points, or 1.74 percent, to end the day at 24,024.13, and the S&P 500 fell 35.73 points, or 1.34 percent, to close out Tuesday at 2,634.56. Meanwhile, the Nasdaq Composite dropped 121.25 points, or 1.7 percent, to 7,007.35.

The Horizons Marijuana Life Sciences ETF (HMMJ.TO) fell flat on Tuesday with no movement, holding at CAD$16.40 per share while the Evolve Marijuana ETF (SEED.TO) fell CAD$0.06, or 0.35 percent, to end the day at CAD$16.94 per share.

GW Pharmaceuticals Goes To Colorado

Colorado’s State Senate unanimously passed House Bill 1187 on Tuesday which fast-tracks FDA approved CBD medications in the state. The bill, which now awaits a signature from the Governor, was seen by some advocacy groups as an end-around towards creating a monopoly by GW Pharmaceuticals (NASDAQ:GWPH) and their U.S. subsidiary Greenwich Biosciences as currently, Epidiolex is the only CBD medication with any hopes of being approved by the FDA. It is a recurring theme from the cannabis pharmaceutical company, dating back to reports from last year by Leafly, who noted that GW has been lobbying state legislatures to pass laws allowing only FDA approved CBD medications to become legal.

The Colorado bill did add language stating that the provisions should not “be construed so as to prohibit, preclude, or otherwise affect previously authorized activities concerning products derived from marijuana, industrial hemp, or other lawful sources which contain cannabinoids but which are not a prescription medicine approved by the United States Food and Drug Administration,” according to The Cannabist. However, according to Leafly, GW Pharmaceuticals has registered lobbyists in 22 states in an attempt to pass similar legislation to control the market.

Investors should be cautious as some analysts report that GW Pharmaceuticals has no intentions of monopolizing the CBD market, especially when those analysts themselves are known to hold a stake in GW Pharmaceuticals. GW, for their part, denies any wrongdoing.

Quick Hits

Organigram Holdings Inc. (TSX-V:OGI) (OTCQB:OGRMF) announced their second-quarter financial results…  Aphria Inc. (TSX:APH) (OTC:APHQF) completed the first shipment of medical cannabis to Althea Company Pty Ltd., the company’s Australian-based partner…Golden Leaf Holdings Ltd. (CSE:GLH) (OTCQB:GLDFF) signed a Letter of Intent to acquire a cannabis dispensary in Northern California.

Cronos Group Speaks

Michael Gorenstein, CEO of Cronos Group (NASDAQ:CRON), spoke with CBC news about the future of his company and legalization. The full interview can be seen below.

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