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Cannabis Stocks Languish As Marijuana Markets Respond To Legislative Slowdowns

Cannabis stocks faltered on Tuesday on what was a mixed day for the marijuana markets, with some indicators showing minimal gains and others retreating into negative numbers. Canadian stocks continued to rise, buoyed by the fact investors see less volatility in a market sans federal intervention.

Meanwhile, major indices sent out mixed messages on Tuesday, as The North American Marijuana Index crawled upwards and The Cannabis Stock Index, which is overseen by 420 Investor dropped a few points. A similar situation occurred with the market’s two leading funds, as Horizon’s Marijuana Life Sciences Index ETF limped towards small gains on Tuesday and the Alternative Harvest ETF struggled to cross the finish line, dropping a few points by the close of trade.

Wall Street recovered on Tuesday with another day of record highs as investors waited on news of quarterly earnings reports. De-escalating tensions with North Korea put investors (and pretty much everyone) at ease as well on Tuesday, helping the market to rally after a mixed day Monday. Canada’s top exchange also bounced back on Tuesday, with help from both energy and cannabis stocks.

Adding to the low numbers on Tuesday was a slew of state-level stories in the U.S. showing that legalized cannabis still has some hurdles to overcome. In Maine, the fight over legalized cannabis saw legislators attempting to push back on the voter-backed initiative by three months. A lawsuit in Detroit threatens to throw the city’s medical marijuana dispensaries into chaos. And in the east, word of federal prosecutors ready to send in the feds sent everyone scrambling. Still, the losses were small, and the gains did happen.

The fundamentals of the marijuana marks are a mixed bag at this moment in time, either suffering or surging from a sort of volatile stability.

Around The Markets

Wall Street and the Canadian Exchanges rallied on Tuesday following Monday’s brief return to reality. Since the new year, record gains accrued on both sides of the border, as investors cautiously wondered how long it could last. Expectations for upcoming quarterly earnings reports and a sigh of relief as North and South Korea met to ease tensions on the Peninsula led investors to pick the markets back up on Tuesday and keep the new year’s rally going. The Nasdaq, the Dow Jones Industrial Average and the S&P 500 all gained on Tuesday. Canada’s top exchange rebounded on the backs of the energy sector and cannabis stocks, with the S&P/TSX closing at 16,319.24, for a minimal gain of 0.01 percent.

The Cannabis Stock Index

Not faring so well on Tuesday was The Cannabis Stock Index, which is overseen by 420 Investor. The combination medical and recreational cannabis index fell 2.12 points to 174.48 following Monday’s increase. The Index lost 1.2 percent on Tuesday, while year-to-date returns were at 22.8 percent.

Solactive North American Medical Marijuana Index

Source: Solactive.com

On the other hand, the Solactive North American Medical Marijuana Index kept things business as usual again on Tuesday, after starting the week with a status-quo-like gain. The Index gained 6.69 points for a 0.33 percent gain to close at 2009.69.

The North American Marijuana Index

MJIC’s North American Marijuana Index inched upwards on Tuesday, a far cry from the soaring heights seen on the Index in recent weeks. After yesterday's somewhat defiant tone by investors, Tuesday saw more of a laid-back approach to the market, perhaps waiting for Jeff Sessions to make his move. State legislators were more than happy to help out the Attorney General on Tuesday, as cannabis legalization faced lawmaker opposition in a number of states from Maine to Michigan. The North American Marijuana Index closed out Tuesday at 362.99, a gain of 4.06 points, or 1.13 percent. Numbers spread themselves pretty evenly across both the U.S. and Canada on Tuesday, with investors showing no preference for stocks from either side of the border. The United States Marijuana Index gained 1.51 points for a 1.51 percent increase, closing at 101.62. Meanwhile, the Canadian Marijuana Index gained  13.30 points for a 1.29 percent increase, closing at 1043.12.

Horizon ETF (HMMJ)    

Marijuana’s two leading funds took two different directions on Tuesday, though neither went too far adrift from the other. The Horizon Marijuana Life Sciences Index ETF rose $0.15 per share following yesterday’s close at $24.18 per unit. Thursday saw the fund close at $24.33 per share for 0.62 percent gain on a trading volume of 5582452.

ETFMG Alternative Harvest ETF (MJX)

The former Latin American real estate fund had a poor showing on Tuesday, drifting downwards after two days of gains. At the close of trading Tuesday the fund was down $0.52 per share for a  1.35 percent loss. The fund ended the day at $37.90 per share.

Winners And Losers

Newstrike Resources Ltd. (TSX-V:HIP), whose wholly-owned subsidiary Up Cannabis received approval from the town of Lincoln, Ontario recently for a new greenhouse expansion saw share prices gain on the market on Tuesday. Prices rose 36.57 percent on higher than average trading volume to close at $2.950 per share. Surna Inc. (SRNA)  closed Tuesday at $0.345 per share after prices rose 24.82 percent on higher than average trading volume. Finally, one of the best-named companies in the game, Kush Bottles Inc. (KSHB) had a stellar day on the market on Tuesday. Share prices rose $0.350 per unit, a 7.49 percent increase on higher than average trading volume.

Source: Bloomberg.com
On the other side of the market, InMed Pharmaceuticals Inc. (IN:CNX) fell in trading on Tuesday. Prices dropped $0.290 per share on higher than average trading volume. The company closed the day at $1.850 per share. Harvest One Cannabis Inc. (HVST:CA) closed Tuesday at $1.810 per share, falling 10.84 percent on higher than average trading volume. Wrapping up the bottom of the market is MedReleaf Corp. (LEAF:CA) who just announced a $100 million bought deal financing agreement. The company closed out Tuesday at $26.280 per share, down 10.00 percent on higher than average volume trading.

Stocks to Watch (And Watch Out For)

Abattis Bioceuticals Corp. (ATT.CN) just announced a deal with British Columbia’s Alliance of Beverage Licensees that will make them highly visible in the regional cannabis market. The company fell 1.43 percent per share on Tuesday, a loss of only $0.01 per share, to close the day at $0.69 per share.

Cannabis Wheaton Income Corp. (TSX-V:CBW) signed a deal with  Inner Spirit Holdings Ltd., acquiring an 18.5 percent stake in the company. The company fell in trading on Tuesday, dropping 5.26 percent to close the day at $2.52 per share.

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