Marijuana Stock Report: Pot Stocks Dip Despite Legislative Hype
By Brandon A. Dorfman
Jun 13, 2018
The North American Marijuana Index fell on Tuesday, with pot stocks losing steam despite heightened interest in recently introduced bipartisan legislation known as the STATES Act. The bill, brought to the Senate by lawmakers Cory Gardner (R-Colorado) and Elizabeth Warren (D-Massachusetts) calls for a federalist approach to cannabis legalization by leaving the law in the hands of the states. According to a report in Leafly, nearly ten state governors have urged Congress to pass the bill.
Pundits on both sides of the political spectrum lauded the news of President Trump’s “probable” support for the bill, even while watching him go back on his word for the umpteenth time at this weekend’s Group of Seven summit in Quebec. Still, whether or not Trump holds to his promise, the bill faces an uphill battle in Congress, especially with Republicans less than eager to give their counterparts on the other side of the aisle a win during an election year.
Senator Kamala Harris showed her support for the bill this weekend as well, tweeting out to constituents that, “we need to get this done.”
“Legalizing marijuana at the federal level is about stopping our country from repeating the same mistakes of the past,” she continued. “Most Americans already know that too many lives have been needlessly ruined because of the War on Drugs.”
Legalizing marijuana at the federal level is about stopping our country from repeating the same mistakes of the past. Most Americans already know that too many lives have been needlessly ruined because of the War on Drugs. We need to get this done. https://t.co/fp44wzCHtg
In fact, politicos across the board talked up support for the bill, as well as a few media outlets of notes. The Washington Post considers it one of the few marijuana legalization bills that Republicans, in theory, should be able to support. “It would enable them to simultaneously say on one hand that they still believe marijuana is an evil weed … but … if it’s what their constituents want…,” wrote The Post.
Meanwhile Wall Street saw gains on the Nasdaq and the S&P 500, but the big news came after hours, as telecom stocks jumped following the approval of AT&T to purchase Time Warner. The deal was approved without conditions, meaning other such mergers could follow in the future.
“If the deal goes through, it’s going to be a real green light for a lot of vertical mergers in a lot of different sectors,” Emilie Feldman, an associate professor of management at Wharton of the University of Pennsylvania, said in an interview with Yahoo Finance, prior to the ruling on Tuesday.
The Dow Jones Industrial Average fell 1.58 points, or 0.01 percent, to end the day at 25,320.73, while the S&P 500 gained 4.85 points, or 0.17 percent, to close out the day at 2,786.85. Also, the Nasdaq Composite rose 43.87 points, or 0.57 percent, to finish Tuesday at 7,703.79.
Growing bigger is Aurora Cannabis Inc. (TSX:ACB)(OTCQB:ACBFF) who announced on Tuesday the signing of a binding term sheet for the acquisition of Anandia Laboratories Inc. According to a statement, Aurora will assume all issued and outstanding common shares of the company in a transaction worth around $115 million. Anandia, whose IP rights include crucial genes in the cannabinoid pathway and pending patents for genetic markers gives Aurora a newfound ability to develop cannabis cultivars.
"This is a transformative acquisition that expands our science capabilities in the upstream segment of the seed-to-sale cannabis value chain, significantly boosting plant-based innovations in cultivation, enabling accelerated product development, and, ultimately, enhancing our margin profile going forward," said Terry Booth, CEO of Aurora in a statement. "Anandia has a fantastic, complementary corporate culture and some of the best and brightest minds in the cannabis industry, including Dr. Jonathan Page, the first scientist to sequence the cannabis genome.”
Aurora was down CAD$0.06 per share in trading on Tuesday, a loss of 0.67 percent, and currently trades at CAD$8.86 per share.