As Canada inches closer to legalization, the nation’s Marijuana Index continues to rise at a rapid pace.
The Canadian Marijuana Stock Index has risen drastically over the past 30 days, going from 419.11 on December 4th, to 950.26 at the close of today’s market (January 3rd). This represents an 126% increase in just one month, one of the largest single-month increases ever seen for the Canadian marijuana stock market. A stat that’s equally impressive, however, is that the market has jumped roughly 365% in less than six months, going from 204.40 on July 10th, 2017, to 950.26 today. A little over a year prior, on March 28, 2016, the Canadian Marijuana Stock Index was at just 74.85; today’s index represents an over 1,100% increase.
The Canadian Marijuana Index “tracks the leading cannabis stocks operating in Canada”. Constituents must “have a business strategy focused on the marijuana or hemp industry”, and are also “required to meet our minimum trading criteria. The Index is “equal-weighted and rebalanced quarterly”.
The U.S. Marijuana Index has dropped drastically since Donald Trump was elected president.
On November 7th, the day of the general election, the U.S. Marijuana Index was at 108.75; this was not too far from the market’s all-time high of 126.35 (which was on January 16th, 2015). Eight and a half months later, as of the end today’s market, the index has dropped over 50% to 51.79.
According to MarijuanaIndex.com: “The U.S. Marijuana Index tracks the leading cannabis stocks operating in the United States. Constituents must have a business strategy focused on the marijuana or hemp industry, and are required to meet our minimum trading criteria.” The Index is “equal-weighted and rebalanced quarterly.”
On April 10th the Canadian Marijuana Index reached 359.19, the highest it’s ever been. This was thanks in large part to a single-day jump of 12%, and a jump of roughly 20% in less than three weeks. Since that jump Canada’s marijuana stocks have been on the decline; many contribute this to the vague nature of the legalization plan put forth by the Canadian government.
At the close of today’s (April 27th) market, the Canadian Marijuana Index was at 265.77. This is a 26% decrease in just 17 days, and marks the lowest the market has been in over a month; the previous low was 261.72 on March 21st.
TheU.S. Marijuana Index fell to 68.21 at the close of today’s market. This is the lowest the market has been since March 14th when it was at 66.84, and is barely above the six-month low point of 64.30 on December 19th, the day of President Trump’s inauguration. The high within that 40-day period came on March 29th, when it was at 75.97.
The high for the U.S. marijuana stock index over the past six-months came on October 31st when it was at 110, over 50% higher than it is now. This was shortly prior to the election, when everyone was predicting a strong victory by then-candidate Hillary Clinton. The highest the market has ever been is 126.35, which came at the close of the market on January 16th, 2015, over two years ago.
Following anger with the government’s lack of speed in implementing marijuana legalization, the Canada Marijuana Index hit a three-month low on March 21 at 261.74, slightly higher than the previous low of 258.47 on December 21. However, since March 21, the market has seen a steady increase, including an almost 10% increase on March 27 to 295.41 following the announcement that marijuana will likely be legal throughout the country by July 1 of next year.
11 days later, and the market has continued to climb. The market jumped from 287.73 on April 4, to 319.90 at the close of yesterday’s (April 7) market. The total increase from March 21 to yesterday is 22%.
Canada marijuana stocks had a significant increase following a report that cannabis will be legal by July of next year.
The Canada Marijuana Index was at 270.68 on March 25th, the day before the report that the country’s legal marijuana industry is expected to get underway next year. At the closing of today’s market, a day after the announcement, the index grew 9.14% to 295.41.
Although 295.41 is as high as the index has been in three weeks, it’s still well below the 3-month high of 344.57, which came on February 21st. The 3-month low came last week on March 21st, when the index dropped to 261.74.
Marijuana stocks in the United States have taken a substantial hit since Donald Trump became president.
On November 7th, the day before the presidential election, the U.S. Marijuana Index was at 108.76. As of March 26th, that number has dropped 35% to 69.96. This is slightly higher than the 3-month low of 66.84 which came on March 14th.
The high for the U.S. Marijuana Index over the past two years came on October 31st, 2016, when it was at 110.
The U.S. marijuana stock index fell over 10% after Trump’s Press Secretary Sean Spicer said he believes we’ll see “greater enforcement” of federal marijuana laws.
On Tuesday, February 21st, just two days before Spicer’s comments, the U.S. marijuana stock index was at 81.30, according to MarijuanaIndex.com. On Friday, the day after Spicer’s remarks, the index dropped to 72.80, a decrease of slightly over 10%.
As of Monday the market had a slight (and we stress slight) increase, moving up to 73.20.
Despite the recent dip, the index is still considerably higher than it was at its recent low point of 64.30, which was on December 19th, the day of Trump’s inauguration.
Here’s a look at why the marijuana stock market will (most likely) be fine, despite Jeff Sessions as Attorney General.
President Trump selected a U.S. senator known for his opposition to marijuana legalization to become the new attorney general for the country. Jeff Sessions raised concerns among marijuana legalization proponents during his confirmation hearings with comments such as this one: “The U.S. Congress has made the possession of marijuana in every state, and distribution of it, an illegal act. So if that’s not desired any longer, Congress should pass a law to change the rule.”
Now, Sessions isn’t just a nominee anymore. He is the U.S. attorney general, with broad powers to enforce federal laws. What will change for the expanding medical marijuana industry? Possibly very little. Here are three reasons not to worry (too much) about marijuana stocks being negatively impacted by Jeff Sessions.
1. Trump’s previous statements
Remember that the attorney general reports to the president. Sessions’ views on marijuana legalization aren’t nearly as important as Trump’s views on it.
Trump has indicated that he is personally opposed to legalizing marijuana. However, during the presidential campaign, he said, “In terms of marijuana and legalization, I think that should be a state issue, state-by-state.” He has also expressed support for legal use of medical marijuana.
During Sessions’ confirmation hearings, a spokesman for the Trump administration stated that the attorney general would implement the president’s agenda. It seems unlikely that Sessions would go against Trump’s policies.
2. Different priorities
Even if Sessions personally wanted to pursue targeting marijuana suppliers operating in states that have legalized marijuana, he’s going to have many more critical things on his plate. For one, there’s defending President Trump’s immigration-related executive orders in court.
Prior to Sessions being sworn in, Trump announced several other executive orders that should keep his new attorney general quite busy. He wants to intensify efforts against international drug cartels. A new national task force charged with reducing violent crime will be created. Trump also wants measures enacted to address violence directed at law enforcement.
It seems pretty clear that Trump’s law enforcement priorities will take plenty of time to implement. He hasn’t mentioned anything related to cracking down on individuals and businesses that are violating federal laws in states that have legalized marijuana.
3. The other governmental branches
What if Sessions does direct the Drug Enforcement Administration (DEA) to go after marijuana businesses? Even though federal laws clearly prohibit the sale of marijuana, there is legal uncertainty about the U.S. government’s rights to shut down state markets. Expect states where marijuana is legal to fight in the federal court system.
Then there’s Congress. Two congressmen from California, Rep. Dana Rohrabacher and Rep. Sam Farr, have successfully pushed for inclusion of an amendment into federal spending packages over the past three years that prohibits the federal government from using funds to enforce marijuana laws in states that have legalized medical marijuana. Rep. Rohrabacher and Rep. Farr are trying to keep that amendment in place.
Rep. Rohrabacher and 12 co-sponsors from both major political parties also introduced legislation titled the “Respect States Marijuana Laws Act of 2017.” This bill would change the Controlled Substances Act to prioritize state law above federal laws.
There’s no guarantee that these efforts by congressional representatives will gain traction, of course. However, any actions by Sessions to crack down in states where marijuana is now legalized could allow Rep. Rohrabacher and the other co-sponsors to win more support for their bill.
A reason to worry
I don’t think there’s much reason to worry about marijuana stocks being hurt by Jeff Sessions or the Trump administration in general. There is one reason for concern, though.
Falling cannabis prices will eventually make it more difficult for some marijuana companies to succeed. Marijuana could become just like any other commodity. Only the biggest and most differentiated companies will survive if that happens. The biggest risk for marijuana stocks probably isn’t enforcement of federal anti-marijuana laws but another more universal law: the law of supply and demand.
As the burgeoning marijuana industry continues to gain momentum, marijuana stocks have become a huge point of discussion both for long-time investors, and for those new to the stock exchange.
Given that the legal marijuana market is relatively immature, and much more unstable than other markets, it can be a challenge to know which marijuana stocks to consider; or even what marijuana stocks are out there. With that in Mind, MarijuanaStocks.com has created a comprehensive list of nearly 100 marijuana-related companies that are publicly traded.
This list is updated daily, giving you recent information on current stock values. Clicking on any of the stocks will bring up the company’s information; this includes their address, contact information, website and a link to recent news headlines pertaining to the business. This is incredibly useful for those considering jumping into the marijuana stock market, or for those who are already involved but want a large list of marijuana stocks all on one page.