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Marijuana Stock Report: Cannabis Markets Mixed As Marijuana Legalization Divides Canadian Legislators

The North American Marijuana Index closed mixed on Monday, anchored by falling Canadian pot stocks following the passage of Bill C-45, the country’s cannabis legalization act, in the House of Commons. A milestone in the fight for prohibition reform, a looming battle with the Senate left the moment less than celebratory. MPs rejected 13 of the nearly 50 amendments added onto the bill by the upper chamber, forcing it back to the Senate where members will have to decide whether or not to accept or reject the changes —with a possible rejection leading ultimately to the law being delayed.

The Index rose 1.62 points, or 0.61 percent to close out the day at 266.28, with the United States Marijuana Index gaining 1.24 percent and the Canadian Marijuana Index falling 0.15 percent.

Most notably, the Liberal Government rejected a provision which would have allowed provinces to ban home-grown marijuana. Senator Yuen Pau Woo, head of a group of Independent Senators said in an interview that the added amendments were given much thought and that he worried now about a contentious back and forth between the two chambers.

"The Senate does not regularly insist and create a ping-pong between the House and the Upper Chamber,”  he Woo told CBC Radio's The House in an interview last week. It's only happened a few times in our history and on very, very consequential bills. I don't know if this one qualifies ... but if senators decide that the explanations are not sufficient and we get to it, then we are in that world again."   

Should the bill pass, it would be the final step before it goes to the Governor General for royal assent. Following that, Prime Minister Justin Trudeau told legislators that it would take from eight-to-twelve weeks for recreational marijuana sales to begin in the country. Liberals are holding out hope that sales can start as early as September.

Meanwhile, Wall Street saw a modest drop on Monday as the energy sector did its best to stem the tide of President Trump’s trade war with China. Following last week’s announcement from the White House that the President would go ahead with a plan for $50 billion worth of tariffs on Chinese goods, Beijing retaliated against American commodities.

"You are seeing the trade narratives hammered, or at least running into some significant headwinds and as a result you are seeing compression in valuations there," said Peter Kenny, senior market strategist at Global Markets Advisory Group, in an interview with Reuters.

The Dow Jones Industrial Average fell 103.01 points, or 0.41 percent, to end the day at 24,987.47, and the S&P 500 fell 5.79 points, or 0.21 percent, to close out the day at 2,773.87. Finally, the Nasdaq Composite gained a modest 0.65 points, or 0.01 percent, to finish Monday at 7,747.03.

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The Horizons Marijuana Life Sciences Index ETF (HMMJ.TO) gained CAD$0.20 per share, or 1.09 percent to close out the day at CAD$18.60, while the Evolve Marijuana ETF (SEED.TO) fell CAD$0.03 per share, or 0.17 percent to finish the day at CAD$17.15.

Bang, Choom To The Moon

Buying up the competition is Aurora Cannabis Inc. (TSX:ACB) (OTCQB:ACBFF) who announced on Monday the closing of a $7 million investment in Choom Holdings Inc. (OTCMKTS:CHOOF) Aurora received nearly 10 million shares of Choom at $0.71 per share for a six percent stake in the company. Furthermore, Choom went on to close their acquisition of Specialty Medijuana Products Inc.

"This strategic investment positions Aurora to participate in the emerging craft cultivation market, as well as in an exciting Western Canada retail strategy with a seasoned team of executives," said Terry Booth, CEO of Aurora in a statement released Monday. "Choom's product cultivation strategy puts the cultivar first, developing a high-grade offering with unique flavour profiles, which are anticipated to resonate strongly with the adult-use consumer market, once legalized. We're pleased to close our investment in Choom, and look forward to building a strong, long-term relationship with the team."

Aurora closed Monday up CAD$0.07 per share, or 0.77 percent and currently trades at CAD$9.13 per share.

Quick Hits

Harvest One Cannabis Inc. (TSXV:HVT) wholly owned subsidiary; United Greeneries received a Dealer's License as per the Controlled Drugs and Substances Act under Health Canada… Tetra Bio-Pharma Inc. (TSX-V:TBP) (OTCQB:TBPMF) is undertaking a study comparing cannabis to fentanyl… Canopy Growth Corporation (TSX:WEED) (NYSE:CGC) subsidiary Spectrum Cannabis introduced color-coded Softgels.

Top 10 Publicly Traded U.S. Cannabis Companies

New Frontier Data compiled a list of the top ten publicly traded U.S. cannabis companies, a group collectively valued at $8.2 billion, according to their report. The full list can be seen below in this week’s Cannabit:

Courtesy New Frontier Data www.newfrontierdata.com
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