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Marijuana Stock Report: Pot Stocks Fall Flat Despite Political Promises

The North American Marijuana Index fell flat on Wednesday, with U.S. pot stocks showing mild gains while their Canadian counterparts dropped just below even. It was another disappointing day for cannabis stock investors who had hoped that last week’s shifting political winds, anchored by President Trump’s promise not to interfere with state-level legalization, would reverse the first quarter slump plaguing the marijuana markets. The brief rally that followed that news last Friday ended Tuesday, as volatility, which has settled in as the norm for marijuana stocks, returned to the cannabis sector. The Index fell 0.78 points, or 0.31 percent to close out the day at 252.96.

The United States Marijuana Index rose 0.57 points, an increase of 0.65 percent, to close the day at 88.62, while the Canadian Marijuana Index fell 3.16 points, or 0.49 percent, to end the trading day at 643.49.

Overall, the Index finished March with no change but ended the first quarter down ten percent following a steep drop in February. U.S. stocks declined two percent in March, with the bulk of the sector experiencing price drops. Only three cannabis companies, CannaRoyalty (CSE:CRZ), CV Sciences Inc. (OTC:CVSI), and Kush Bottles Inc. (OTC:KSHB) gained more than 15 percent for the month.

The Marijuana Index
Source: The Marijuana Index www.marijuanaindex.com

Across the border in Canada. Pot stocks saw a slight increase, gaining two percent in March, with five constituents gaining 15 percent or more. Rounding out the top of the Canadian Index for the month were Invictus MD Strategies Corp. (TSX-V:GENE), Newstrike Resources Corp. (TSX-V:HIP), InMed Pharmaceuticals, Inc. (TSX:IN), THC Biomed, Inc. (CSE:THC), and Canopy Growth Corporation (TSX:WEED).

An interesting sign of the state of the sector, trading volume decreased 24 percent from its all-time high in January.

Meanwhile, Wall Street saw mixed results on Wednesday with consumer staples and financials falling and higher oil prices lifting energy stocks. IBM dragged down the tech sector with a 7.5 percent loss following a poor showing in their quarterly profit margins.

"There's a lot of headlines pulling the market in different directions. The most notable is energy prices pulling that sector higher," said David Joy, chief market strategist at Ameriprise in an interview with Reuters. "Earnings and the yield curve are the two biggest influences… transports are very strong today which is a very good sign for the economy."

The Dow Jones Industrial Average dropped 38.56 points, a decline of 0.16 percent, to end the day at 24,748.07, while the S&P 500 rose 2.25 points, an increase of 0.08 percent, to close out the day at 2,708.64. Finally, the Nasdaq Composite jumped 14.14 points, or 0.19 percent, to end Wednesday at 7,295.24.

The Horizons Marijuana Life Sciences ETF (HMMJ.TO) fell CAD$0.01 per share, a decrease of 0.06 percent, while the Evolve Marijuana ETF (SEED.TO) fell CAD$0.06 per share, a decline of 0.34 percent, to close out Wednesday at $17.36.

CannaRoyalty Adds FlorCal Farms To Its Portfolio

Cannabis’ most diversified company CannaRoyalty Corp. (CSE:CRZ) (OTCQX:CNNRF) announced on Wednesday it had signed a binding term sheet to acquire craft cannabis producer FloraCal Farms. The deal brings branded premium cannabis flower and pre-roll products to the CannaRoyalty portfolio. Meanwhile, FlorCal is building a Sonoma County facility with phase one of the build focused on licensed and in commercial production.

"FloraCal is truly unique,” said Marc Lustig, CEO of CannaRoyalty. “The rare combination of product consistency, premium pricing, authentic brand, and resoundingly positive feedback from our dispensary partners and California consumers, positions it well to be a future global cannabis brand. We see its success in the discerning California market as evidence that branded flower that is truly differentiated occupies an important place in the cannabis industry."

Quick Hits

Scythian Biosciences Corp. (TSXV:SCYB) (OTC – Nasdaq Intl:SCCYF) announced that Argentina-based ABP S.A. received its first purchase order of CBD oil under a supply agreement with Aphria Inc. (TSX:APH)... Cannabis Growth Opportunity Corporation (CSE: CGOC) invested in U.S. based cannabis company Jushi Inc… Wildflower Marijuana Inc. (CSE:SUN) completed a private placement.

National Cannabis Survey, First Quarter 2018

Statistics Canada and partners within Health Canada, Public Safety Canada and the Public Health Agency of Canada developed the National Cannabis Survey, which examines cannabis use over the past three months. It also looks at whether or not respondents would change their usage should recreational become legalized in 2018. The following infographic details some of the findings:

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