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Cannabis Stock Report: What You Need To Know Heading Into The Marijuana Markets This Week

Marijuana markets took a beating from all sides last week as leveling cannabis stocks battled outside forces on Wall Street and in Washington. Still, strong signals from indicators around the sector showed the industry pulling through, however slightly, by week’s end. Meanwhile, across the industry some of cannabis’ more substantial players made waves last week, none more so than Aurora Cannabis (TSX:ACB) and CanniMed Therapeutics (TSX:CMED) who may have finally put aside their differences and are ready to come to the table and negotiate.

Not to be outdone, Canada’s heavyweight, Canopy Growth (TSX:WEED) led a wave of bought deal financing this past week, with smaller companies like Quadron Cannatech Corporation (CSE:QCC) and Nuuvera Inc. (TSX-V:NUU) following suit.  While some cannabis firms filled their war chests ahead of this summer’s legalization efforts in Canada, others sought to ride the blockchain/ cryptocurrency wave in hopes of finding a unique place in an otherwise crowded market.

A marijuana market correction bumped up against a government shutdown late in the week as Washington once again proved itself unable to function, save for a few legislative attempts to corner and wound Jeff Sessions. A slew of bills either proposing continued protections for states with legalized cannabis or outright prohibition repeal gained traction this past week, though it remains to be seen if they have any legs. Not to be outdone, state-level cannabis politics made headlines this week as well.

Kush Bottles (OTCMKTS:KSHB) and Aphria Inc. (TSX:APH) both had a big week, and Pennsylvania saw its first medical marijuana dispensary open. And the Eagles are going to the Superbowl!

Here is a rundown of everything you need to know about cannabis to start your week:

Cannabis Stocks Subdued As Marijuana Markets Fight Outside Forces

Canadian cannabis stocks began the week strong with the U.S. markets closed in observance of Martin Luther King Jr. day. MJIC’s Canadian Marijuana Index gained 76.82 points for a 9.35 percent increase, closing the day at 898.80. However, markets stayed mixed throughout most of the week with stocks and funds trading wins and losses each day, even as panicked-selling from the prior week appeared to be drying up. By Wednesday it became clear that the tanking bitcoin market was beginning to drag down the cannabis sector, as weekend investors pretending to be Gordon Gekko haphazardly flushed their money in-and-out of what they considered to be “the next big thing.” Friday’s looming government shutdown, which became a reality by the weekend, was enough to subdue any real gains investors may have been hoping for in the cannabis stock market.

What To Look For This Week

All eyes are on Washington right now as Senate Democrats and President Trump battle it out over immigration and DACA, the Deferred Action for Childhood Arrivals policy. Expect marijuana markets to shake out sooner rather than later, depending on how quickly some of these outside forces begin to settle down.

Aurora And CanniMed Open Negotiations

Late last week industry rivals Aurora Cannabis, and CanniMed Therapeutics called a cease-fire on the eve of the latter’s vote to acquire fellow cannabis producer Newstrike Resources Ltd. (TSX:HIP). Months of hostilities stemming from Aurora’s attempted hostile takeover of CanniMed may finally end this week as Aurora is now in talks to purchase both CanniMed and Newstrike. The proposed merger would be a landmark deal for the cannabis sector, leading to one of the most prominent companies in all of the industry. Many questions remain, however, as all of cannabis waits with bated breath to see if this drama will finally come to an end. What price does Aurora offer for the new deal? What happens to their stock price should the deal succeed? What happens to Aurora should the deal fall through?

What To Look For This Week

It looks more and more that CanniMed CEO Brent Zettl’s position was nothing but posturing. Give it two-to-one odds that the deal goes through, with Aurora’s stock price falling by the end of the week.

You WIn A Bought Deal Financing, And You Win A Bought Deal Financing…

Canopy Growth Corporation led a string of bought deal financing this past week, further showing that faith in the industry is healthy and investors are eager to pour money into the sector. Selling over 5 million shares to a group of underwriters led by GMP Securities L.P., Canopy filled their coffers with $175 million. Nuuvera put together a deal for $35 million. Scythian Biosciences Corp. (TSX-V:SCYB)(OTCQB:SCCYF) managed to pull off two separate deals this week, one of which was with industry leader Aphria Inc. to the tune of $20 million. Meanwhile, on the lighter side of things, Quadron Cannatech Corporation sold over 7 million units on a bought deal financing basis for $5 million.

What To Look For This Week

With Los Angeles catching up to the rest of California and Canada still prepping for national legalization this summer, look for more of the same this week and in the coming months, especially with another rise in prices around the corner.

The Hill Debates Cannabis Legislation

Before the government shutdown early Saturday morning, Capitol Hill spent last week debating several bills to either protect current marijuana policy or completely overhaul it. The Rohrabacher-Blumenauer Amendment, which is up for reauthorization again this year prevents the Justice Department from attacking states where marijuana is legal with the use of federal funds. Representative Jared Polis (D-CO) sent a letter to House leaders this past week demanding that the amendment remains in any future appropriations bills. At least sixty-nine other legislators from both sides of the aisle signed on to the letter. Meanwhile, Polis and Representative Tom McClintock (R-CA) sought to replace the Rohrabacher-Blumenauer Amendment with their own, which extends protections to recreational marijuana. House Democrats introduced a legalization bill on Wednesday, while in the Senate Elizabeth Warren and Cory Booker have proposals of their own floating around.

What To Look For This Week

Right now expect little to move forward on this front until the shutdown ends. Even if it is settled quickly look for legislators to grandstand without actually accomplishing much. Despite polls showing a plurality of Americans agreeing that marijuana should be legal, politicians still pander to the tough-on-crime constituency.

Other Items To Keep On Your Radar…

Future Farm Technologies Inc. (CSE:FFT) (OTCQB:FFRMF) signed onto the crypto-craze with their purchase of a stake in Flipcoin…  Kush Bottles, Inc. (OTCQB: KSHB) shot up 258 percent in the first quarter of 2018...Pennsylvania opened their first medical marijuana dispensary… Aphria acquired  Broken Coast Cannabis Inc…

Go Eagles…

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