Marijuana News Today: Bill Introduced To Protect Marijuana Legalization In The U.S.

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Marijuana News Today Could Change U.S. Pot Law

The marijuana news today is focused on U.S. Rep. Diana DeGette’s new legislation that would protect states where marijuana is legal from federal intrusion, potentially putting an end once and for all to the concerns of a U.S. marijuana crackdown.

“Colorado’s marijuana-related business owners are just like any other legitimate business owners in our state, and are currently contributing more than one billion a year to our state’s economy,” said DeGette, a Democrat representing the first district of Colorado. (Source: “DeGette introduces bill to block feds from enforcing marijuana laws in states where its legal,” Congresswoman Diana DeGette, April 1, 2019.)

“There’s no reason why they should have to go to bed every night worried that the federal government could suddenly take it all away from them, and treat them like a criminal.”

The Respect States’ and Citizens’ Rights Act would dramatically alter the way marijuana law currently works in the U.S. at the moment by eliminating federal preemption (which is to say federal law superseding state law) of states’ marijuana laws.

This would be a huge boon to U.S. marijuana legalization in the U.S., as many have long feared a potential marijuana crackdown following President Donald Trump’s victory.

While Trump himself has not come out in direct opposition to marijuana legalization in the states, his former Attorney General, Jeff Sessions, was famously anti-pot. His current Attorney General, William Barr, is also a well-known drug prohibitionist.

While Barr did say that he would respect state decisions, he also said that the current system in place is untenable. He’s not wrong. Having marijuana legal on the state level while illegal at the federal one creates an awkward legal limbo, with cannabis businesses operating in a grey zone. This legislation would help clear that dissonance up.

DeGette’s press release about the bill specifically mentions Barr’s history on marijuana as a reason to support the new law.

While Democrats may have enough votes in the House to pass the bill, the Senate is still controlled by Republicans. Having said that, there is a chance that enough Republicans will defect and vote for the bill.

It wouldn’t be all that unrealistic; Republicans are typically the party for states’ rights, so a bill like this would be in keeping with traditional Republican dogma.

As far as marijuana stocks are concerned, this bill could have far-reaching effects.

Remember that marijuana stocks in were threatened with being delisted from stock exchanges in Canada if they did business in the U.S., precisely because of the U.S. federal prohibition.

If this bill were to fully and completely legalize marijuana in certain U.S. states and protect them from federal meddling, that could sway the Toronto Stock Exchange to change its tune.

While by no means a guarantee, it is a possibility that this bill—if passed—could reopen the U.S. to Canadian marijuana companies. Such a development would be a huge boon to pot stocks.

CTST Stock

On to pot stock market. In the marijuana news today, we have seen relatively slow movement. Yesterday the market was rather uneventful, and today is looking to be more of the same.

One company that I’m watching closely this week is CannTrust Holdings Inc (NYSE:CTST). CTST stock was even to start the day, but is down nearly 20% over the past five days.

The reason for the massive drop? The company’s latest earnings report.

CannTrust posted a fourth-quarter net loss of CA$25.5 million (CA$0.26 per share) compared to a CA$6.3-million profit (CA$0.08 per share) a year ago. (Source: “CannTrust plunges after missing fourth-quarter estimates,” BNN Bloomberg, March 28, 2019.)

Analysts had expected revenues of CA$21.2 million and a net loss of CA$6.4 million (amounting to a loss of CA$0.04 per share), according to Thomson Reuters Eikon.

The company attributed its high losses to increased operating expenses that came about as a result of marketing during the launch of its recreational brands, personnel hires, and listing on the New York Stock Exchange (NYSE).

CannTrust Holdings Inc finds itself on the back foot and I’m very interested in seeing how the company responds.

While I believe there are superior marijuana penny stocks out there, that doesn’t mean there is no value to be eked out of CTST stock.

Right now, the important thing to look for is the response. With the stock down big, this could be a great opportunity to see a strong bounce back—and a health stock gain for day traders—if the company can find a way to change the narrative.

For those looking for a longer-term buy, CannTrust Holdings Inc will recover fully if it can post a successful earnings report next quarter. This is a sizable risk, however, as the company could very well falter again, and that would be disastrous for CannTrust.

APHA Stock

Another company that is on the riskier side of things is Aphria Inc (NYSE:APHA). APHA stock gained a point in early-morning trading today and is up about four percent over the past five days.

Aphria was a former favorite of mine, but it fell from grace following a legal scandal and a horrid 2018.

Many companies have had a strong start to 2019, and Aphria Inc can count itself among that number. Still, the company has had problems with volatility in the past, so I hesitate to recommend Aphria stock long-term.

While Aphria’s growth in recent months is strong, it still has a ways to go before it fully regains my trust.

I’ve been recommending APHA stock as a good short-term play for a while now, and I think that’s still the right move. If the company can solidify its gains in 2019 over the next few months, though, it may be time to reevaluate.