Marijuana News Today: New York Legalization Moves One Step Closer

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Marijuana News Today: New York Marijuana Legalization

In a familiar story in 2018, the marijuana news today has yet another state signaling that it is ready for recreational marijuana legalization. This time by way of New York marijuana legalization now being supported by the state’s governor, Andrew Cuomo.

Cuomo released a statement that detailed the findings of a study commissioned in January 2018. (Source: “Governor Cuomo Announces Workgroup to Draft Legislation for Regulated Adult-Use Marijuana Program,” New York State, August 2, 2018.)

The results were not exactly revelatory, but they were positive for the marijuana industry. Namely, the study concluded that the “positive impacts of a regulated marijuana market in New York State outweigh the potential negative impacts, and that areas that may be a cause for concern can be mitigated with regulation and proper use of public education that is tailored to address key populations.”

I feel like any number of people paying attention to the marijuana market could have said as much and saved the state a lot of money, but oh well. The results, at least, were the ones we pot bulls wanted.

“The next steps must be taken thoughtfully and deliberately,” Cuomo said in the statement.

“As we work to implement the report’s recommendations through legislation, we must thoroughly consider all aspects of a regulated marijuana program, including its impact on public health, criminal justice and State revenue, and mitigate any potential risks associated with it. I thank the members of the workgroup for their time and expertise as we work to craft a model program.”

The report also contained a few other nuggets of positivity as it concluded that a regulated marijuana industry in New York would also help mend some of the racial disparities in the criminal justice system. And of course, reducing incarceration will save the state money, which no one is against.

Cuomo has long been a supporter of sorts for New York marijuana legalization, pushing medical marijuana in 2014 and a couple of bills for decriminalization. While the medical marijuana bill did pass, the others failed to get the requisite votes in the legislature.

But today marks another turning point for the marijuana industry. New York marijuana legalization would naturally be a huge get for pot stocks as the state is among the most populous and richest in America.

With the addition of New York marijuana legalization, we are fast approaching a situation where 80 million U.S. citizens have access to recreational marijuana despite federal laws against it.

There is a threshold that will be passed, and each additional state coming into the fold is only bringing us closer to that tipping point.

Of course, just because Cuomo has come out in support of New York marijuana legalization, that does not mean it will necessarily happen. However, it does mean that it’s closer than ever before and will likely pass the legislature at some point—or go to the state for a referendum.

Pot stocks, meanwhile, will watch with hungry eyes as another massive market looks to open up to marijuana sales.

Marijuana Stocks Performance

While the marijuana news today politically is solid, the pot stock market is closing the week out on uneven terms.

The graph below showcases the performance of the three stocks we will look at in this article: Canopy Growth Corp (NYSE:CGC) in black, Aphria Inc (OTCMKTS:APHQF, TSE:APH) in blue, and Tilray Inc (NASDAQ:TLRY) in red.

Chart courtesy of StockCharts.com

Canopy Growth Stock

CGC stock is down about one point in early-morning trading but up just a hair on the week.

Again, we’re measuring success here in how much a company doesn’t lose during this correction. Overall, that’s a successful week for CGC stock, provided today doesn’t take a drastic downward turn.

CGC stock has been slowly bleeding its gains away over the past month and we’re still waiting for that trend to turn around.

I believe that September—at the latest—will see this correction die. Until then, we may be in for a few more weeks of measured losses.

On the whole, however, CGC stock still remains among my top picks for a long-term marijuana stock.

Aphria Stock

One of the worst performances among pot stocks this week came from Aphria Inc.

Aphria stock fell by six percent and is down half a point in early-morning trading.

Much of this is the result of its earnings report that was released this week.

While Aphria logged a surge of revenue from CA$5.7 million a year ago to CA$12.0 million this year, net losses also nearly doubled. (Source: “Aphria Records Revenue Increase Of 17% In Quarter And 81% Year Over Year,” Aphria Inc, August 1, 2018.)

Aphria stock fell as a result.

The losses were attributed to higher compensation, costs associated with Aphria International, and losses in its investment portfolio.

Aphria stock has, of course, been one of the darker spots in the marijuana industry in 2018. While many companies have lost significant value year-to-date, few have performed as poorly as Aphria stock.

The company’s share value has plummeted by over 45% in 2018 and has shown an inability to stage any sort of sustained recovery.

Other marijuana stocks have suffered this year, but not to that extent and not without at least some extended periods of gains.

Overall, I’ve grown very cold on Aphria stock, at least in the short term.

There is hope for the company in the long term, but right now, Aphria stock needs to show it can recover.

Tilray Stock

Experiencing quite the opposite week of Aphria stock is Tilray Inc.

TLRY stock is up five percent on the week and has shown little movement as of early-morning trading today.

TLRY stock will continue to remain volatile in the aftermath of its blockbuster initial public offering (IPO), which saw the first marijuana company go public on the Nasdaq.

The thirst for this was very real and we saw that translate into massive—nearly 80%!—gains in a few short days.

But, of course, that hype could not sustain such ridiculous growth, and we saw the company fall back to earth a week later.

Now expect to see these types of rises and falls of five or so percent as investors seek to appropriately price TLRY stock.

Analyst Take

Another big political win dominates the marijuana news today.

It seems that every week we report that another state is looking to legalize or that a prominent politician has come out in favor of recreational marijuana legalization.

You don’t have to be a meteorologist to know which way the wind is blowing. Marijuana legalization in the U.S. is inbound and the New York marijuana legalization push is only going to bring it that much closer.

Of course, we’re still talking potentially years out, but the writing is on the wall.

For those looking to play the long game of marijuana investing, that’s information you can take to the bank.

Check out the original article here.
Author: Stephen Karmazyn

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