Marijuana News Today: The U.S. Senate Could Help Jump-Start Pot S…

Marijuana News Today

The marijuana news today has us looking to the U.S. Senate for a long-awaited hearing that could help spur huge growth in the marijuana sector.

The Senate Committee on Banking, Housing and Urban Affairs will hold a hearing on cannabis banking Tuesday. This marks the first time the Republican-controlled Senate has agreed to examine the Secure and Fair Enforcement Banking Act (SAFE Banking Act), which would allow banks to offer services to pot companies in compliance with state law. (Source: “Pot Policy Review in U.S. Isn’t Helping Stocks: Cannabis Weekly,” Bloomberg, July 21, 2019.)

At the moment, many marijuana companies are cut off from banking capital due to the federal regulations making it too risky to provide loans to pot businesses. As a result, most of the funding for pot companies has to come from investment capital, limiting the ability of these companies to make important, high-cost moves. This, in turn, has stunted pot stock growth.

“On the legislative front, it is evident that the politics of cannabis is undergoing a transformation that is almost unparalleled in Washington,” said Jaret Seiberg, analyst for Cowen Inc (NASDAQ:COWN), one of the top investment banks that tracks the marijuana business. “This has gone from an issue that Capitol Hill did not take seriously to one that is driving legislation and elections, and this all happened in the last two years.” (Source: Ibid.)

While the legislation isn’t close to passing, the very fact that it is finally getting a Senate hearing is a big deal in and of itself.

The future of the marijuana industry, as usual, will be decided in the various parliaments and congresses of the world, specifically Congress in the U.S.

Whether through direct referendums or traditional legislative channels, marijuana stocks are going to have their future outlook be dramatically reshaped depending on just how fast major markets can legalize pot.

The U.S. is potentially very close to being the next country to push through recreational marijuana legislation.

While the SAFE Banking Act will help spur stock prices in the near-term should it pass, the next president may be the first in modern American history to have a pro-pot agenda.

Almost all of the major front runners for the Democratic Party presidential nomination have come out in support of marijuana reform to one degree or another. While they still have to overcome sitting President Donald Trump (who has been ambivalent on weed at best), this is still a huge boon to the marijuana industry.

While several presidents have admitted to having partaken of marijuana, none have come out in support of marijuana reform the way the current cohort of presidential hopefuls have.

The end result is that in just over a year, we may see a sitting president with a very weed-friendly policy agenda that would, if successful, see marijuana legalized in the U.S. and send pot stocks soaring.

CURLF Stock

The marijuana news today is also still buzzing following Curaleaf Holdings Inc’s (OTCMKTS:CURLF, CNSX:CURA) acquisition of privately held Grassroots for $875.0 million in a cash-and-stock deal. (Source: “Cannabis Canada: How a U.S. company suddenly became the biggest pot firm in the world,” BNN Bloomberg, July 17, 2019.)

The deal is set to make Curaleaf Holdings the largest marijuana company in the world by revenue, according to the company’s press release.

CURLF stock is up another three percent in early morning trading, a strong showing following the company’s very impressive last five days where is gained nearly 25%.

The massive spike in CURLF stock also comes at a time when many other pot stocks are struggling with the current marijuana market pullback, making it an especially strong buy at the moment.

Following the acquisition, Curaleaf Holdings will be in 19 U.S. states and grow the number of its national dispensaries to 68 nationwide. It will also increase the company’s pro forma 2019 revenue to $256.0 million. This comes on the heels of the company’s announced intentions to look into the European market in the near future. The company’s overall plan seems bent on expansion and growth, something that I’ve long championed in the marijuana industry. As such, while Curaleaf stock is looking grand right now, the company could very possibly just be getting started when it comes to gains.

After all, Curaleaf is now in a very enviable position; it’s among the largest marijuana companies in the U.S. and is continuing to expand. It’s also one of the few publicly traded pot companies that has access to huge swaths of the U.S. marijuana market.

On top of that, there are still events in the company’s future that could help spur growth, like a move to the Nasdaq or New York Stock Exchange. In either event, expect to see CURLF stock jump once more.

I’m very bullish on Curaleaf Holdings Inc, as it provides investors with a strong entry into the U.S. market while also leaving open the possibility of further growth beyond American borders.

HEXO Stock

Something I’ve been watching intently has been the recent performance of HEXO Corp (NYSE:HEXO). One of my favorite marijuana penny stocks, it has since fallen on tough times. But in my mind, that’s only going to set it up for future gains down the line.

HEXO stock fell another percent in early morning trading, and it has lost four percent over the past five days. More importantly, it has dropped below five dollars a share. This is a very important threshold.

HEXO remains a very strong company. Sure, the marijuana industry downturn has hit it hard, but there is nothing specific to HEXO stock that makes it weak. Instead, it’s taking its lumps much like the other companies in the industry.

More importantly, I believe that at less than five dollars a share, this company is a steal.

It continues to have one of the strongest marijuana supply agreements in the game (a very lucrative deal signed with the province of Quebec) and it has a partnership with “Big Alcohol” by way of Molson Coors Brewing Co (NYSE:TAP).

Not to mention that many analysts pegged the company as undervalued before the pullback; now we have a company that may very well be among the best bargains out there.

With that in mind, marijuana investors may be sitting on a great buy. While I believe that a further decrease in value is likely in-store for the company, buying and holding on now will likely yield big wins for investors. Others who want to wait for the nadir are also well-advised to try so, but that runs the risk of missing a large spike in share value that I am convinced will hit before 2020.

And my track record with HEXO stock is quite strong: since recommending the stock about a year ago in my newsletter, Marijuana Millionaires, the company has yielded investors 55% in gains.

CURLF and HEXO Stock Performances

The performances of CURLF stock (black line) and HEXO stock (blue line) over the past week are seen on the chart below:

Chart courtesy of StockCharts.com

Analyst Take

The marijuana news today, as is customary, has us looking to the U.S. What happens in Congress there will determine the future of pot stocks the world over.

Right now, things are looking very positive for the marijuana industry as the Senate begins the important process of self-reflection and hopefully loosens the pot prohibition laws on the way to an eventual total repeal of that policy.