The North American Marijuana Index drifted upwards on Wednesday, with pot stocks gaining for the first time all week as the pendulum of President Trump’s trade war drama swung towards the positive. Early morning fears of retaliatory tariffs from China were eased in the afternoon as Trump economic advisor Larry Kudlow told the press that the administration was “negotiating” rather than waging war with the East. Investors, who like the President apparently make decisions based on the last piece of information given to them, poured money back into the market under the impression that tariffs would either not take place immediately, if at all. The Index gained a modest 0.97, or 0.43 percent to close out the day at 224.39.
The United States Marijuana Index rose 0.40 points, or 0.55 percent to close out Wednesday at 73.33, while the Canadian Marijuana Index eked out a gain of 0.60 points or 0.10 percent to close the day at 609.56.
"We're starting to feel that while markets hate uncertainty, Trump's bark is worse than his bite when it comes to trade," said Robert Phipps, a director at Per Stirling Capital Management in an interview with Reuters.
"It's earnings that's going to lift us off this bottom. It wouldn't shock me if we chopped around sideways for a little bit before earnings season ... The trade stuff is really a side show. We're waiting for real economic data like the jobs report Friday and for earnings. For now it’s going to be all about the technicals," he continued.
The Dow Jones Industrial Average climbed 230.94 points, an increase of 0.96 percent, to close the day at 24,264.30, while the S&P 500 gained 30.24 points, or 1.16 percent, to end Wednesday at 2,644.69. Meanwhile, the Nasdaq Composite jumped 100.83 points, a gain of 1.45 percent, to end the day at 7,042.11.
Analysts in the marijuana markets attempted to pinpoint the end of the current downtrend, according to Marijuana Business Daily, as pot stock investors lament a nearly 40 percent loss of value on the Canadian Marijuana Index since January. According to analysts specific developments such as medical cannabis insurance, Senate approval recreational marijuana, retail license awards, and financing from “big 5” Canadian banks would be surefire signs that the downturn is in retreat.
“We had said back in January that we’d be watching for April as the next entry point – and we believe that time has come,” wrote Eight Capital analyst Daniel Pearlstein in a note to clients. “We still view the largest Health Canada LPs as the best way to play the sector.”
Horizons Marijuana Life Sciences ETF (HMMJ.TO) fell CAD$0.12 per share, a decline of 0.79 percent to close the day at CAD$15.15. Similarly, the Evolve Marijuana ETF (SEED) fell $0.27 per share to close the day at CAD$15.67.
MassRoots Plays Nice
Cannabis social media titans and sometimes blockchain players Massroots Inc. (OTCQB:MSRT) announced on Wednesday that the company would comply with California regulations and only list state-licensed dispensaries on its app. The country’s largest adult-use market recently requested that all online services stop listing unregulated dispensaries to help reign in a growing problem in the state. One competitor, WeedMaps, made known that they would be defying the order, stating that California had no say over who the company listed on their services.
"We believe that operating in full compliance with state cannabis regulations is crucial to creating long-term, sustainable shareholder value and building confidence with consumers as well as local, state and federal regulatory organizations," stated MassRoots Chief Executive Officer, Isaac Dietrich. "Other services that continue to drive traffic to unlicensed dispensaries are punishing businesses that have invested significant time and resources to gain compliance with state regulations. We view this as an opportunity to build long-term relationships with compliant dispensaries that we believe are the future of the cannabis industry."
Don’t Fret, American Cannabis
Bang Holdings Corp. (BXNG:OTCMKTS) CEO and founder of the International Church of Cannabis Steve Berke spoke about the power of American cannabis companies, despite the dominance of the Canadian market. Check out the full interview below: