The legal marijuana industry shows great promise with the first cannabis-based drug receiving approval by the U.S. Food and Drug Administration (FDA) and with massive amounts of investor money flowing into legal marijuana operations.1 In fact, legal cannabis in North America has made significant developments in recent years. Perhaps the most important was the shift in Canada. On Oct. 17, 2018, the Canadian federal government legalized recreational cannabis sales across the country. It also legalized cannabis use among adult Canadians.2 But what about the United States? At the federal level, cannabis remains a controlled substance, but more states are voting to legalize marijuana in one form or another. And cannabis stocks are growing in popularity on several major exchanges.
With legalization proceedings in both Canada and the U.S., it was perhaps only a matter of time before another important first would happen: Companies are legally shipping marijuana from Canada to the United States. Below, we'll explore two companies that do this and how they may reshape the international cannabis market.
Companies are legally shipping marijuana from Canada to the United States.
Tilray received approval from the U.S. government to export a cannabinoid product to California for a clinical trial in September 2018.
The DEA approved a shipment of legal medical cannabis from Canada's Canopy Growth to a research partner in the U.S.
Tilray (TLRY) is one of the major players in the cannabis industry. Back in September 2018, the medical cannabis products company announced it received approval from the U.S. federal government to import a cannabinoid product for a clinical trial in California. The product is designed to address a particular type of seizure disorder.3 The Canadian company is reliant upon exports to foreign markets because of its focus on the medical marijuana arena, according to a report by Motley Fool.4 Exporting to the U.S. is crucial because the U.S. government has only one federally-approved facility to grow marijuana, meaning the flow of supplies for medical developers is excruciatingly slow.5
Tilray is the first company that received approval from the U.S. Drug Enforcement Administration (DEA) to ship cannabis products into the United States. It is a highly specialized case but represents a potential path forward for similar medical marijuana research outfits nonetheless.
Tilray was founded in 2013 and has its main headquarters in Toronto, Canada. The company also has offices in Australia, New Zealand, Europe, and Latin America. It launched its initial public offering (IPO) in 2018 and was the first cannabis company to trade on a stock exchange in the United States.6 Tilray entered into an agreement with New York University in 2019 to export CBD to the school for research purposes.7
Another major player in Canada's marijuana industry is Canopy Growth (CGC). Roughly a week ahead of the country's legalization day, the company revealed that the DEA approved its shipment of legal medical cannabis to a research partner in the U.S. The company's president, Mark Zekulin, reportedly suggested that "the United States presents a unique market opportunity and as the most established cannabis business in the world, we, in turn, offer a unique ability to advantage standardization, IP development, and clinical research that can improve the understanding and legal application of cannabis and cannabinoids."8
Founded in 2013 under the name Tweed Marijuana, it was renamed Canopy Growth in 2015. The company, based in Smiths Falls, Canada, was valued as the world's largest cannabis company as of April 2019 based on market capitalization.9 According to Cannabis Market Cap, Canopy's market cap was $5.3 billion as of May 8, 2020, with more than 346 million shares outstanding.10 The company specializes in cannabis and hemp-dried flower, oil, and capsules.
A Hazy Future
The biggest question going forward is whether these cases signal a sea of change to come, or if they're simply one-off events. It is difficult to tell, especially since the laws and rules vary from state to state, not to mention how the drug is viewed by the federal government.
Marijuana is considered a Schedule I drug under the Controlled Substances Act.11 Therefore, it is still illegal under the federal government. While the National Institute on Drug Abuse says the FDA has approved two cannabinoid-based medications for market, the agency hasn't conducted any wide-scale research or clinical trials about the benefits of marijuana on human patients.12
Marijuana is considered a Schedule I drug under the Controlled Substances Act, and is therefore illegal under the federal government.
A total of 35 states as well as the District of Columbia have legalized marijuana to some degree—mainly for medical purposes. Sixteen of those states—Alaska, Arizona, California, Colorado, Illinois, Maine, Massachusetts, Michigan, Montana, Nevada, New Jersey, New Mexico, New York, Oregon, Vermont, and Washington—have made recreational use legal.13 These numbers, though, continue to rise.
Should this trend continue, it seems likely that lawmakers on the federal level will at least reconsider the possibility of legalizing marijuana nationwide, even if only in particular situations. Regardless of what happens with U.S. regulations, expect that Tilray and Canopy Growth will take firm advantage of this unique opportunity to gain access to the U.S. market. Should the federal government eventually open the doors to cannabis imports on a broader scale, these two companies may be in the best position to capitalize.
The Bottom Line
Canadian companies have received highly specialized approval in particular situations to ship cannabis products into the U.S. It's important to recognize that these are limited scenarios and that the situation is far from an open door for Canadian cannabis to flow southward. Still, given the fact that the U.S. federal government has remained staunchly opposed to legalizing marijuana in any form, it represents a significant shift in policy.
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Is Sundial Growers Stock a Good Canadian Cannabis Choice?
Even as marijuana legalization spreads across the country, SNDL stock has a bumpy road ahead
By GS Early Mar 31, 2021, 3:57 pm EDT
If you were to hear that Sundial Growers (NASDAQ:SNDL) stock is up 140% year to date, you might think the answer to my question would certainly be a resounding “Yes!” But when it comes to SNDL stock, the answer is not so simple.
Image of a marijuana grow house
Investing – not trading – is about perspective. And the past three months haven’t seen a great deal of perspective. As a matter of fact, if you look at its chart over this recent period, a month and a half ago the stock was nearly $3 a share. Now, it’s around $1.13. And it’s only up 19% in the past 12 months.
That means in early February it was a moonshot, launching from around 47 cents a share in January. Now that current share price doesn’t look all that amazing. Some would call the stock a falling knife.
Of course, others would say it’s a prime bottom fishing stock at this point.
SNDL Stock: Cannabis Stocks Smokin’ Again
First of all, tiny stocks like this in hot markets are going to be volatile. It’s just the nature of the game, so if you can’t take wild swings, don’t play.
Cannabis is still one of those industries where the entire space is just taking shape. Cannabis is legal across Canada, but with a population about 11% of the size of the U.S., it’s not exactly a market that can launch a major cannabis revolution.
Granted, it has trading partners in Europe, which adds customers to the better companies out there. But right now, it’s unlikely that current Canadian cannabis stocks will all survive the next few years. And Sundial Growers stock is that bubble.
The U.S. market is opening one state at a time due to the fact that federal regulations still make cannabis illegal. That makes funding (and especially banking) for cannabis operations more challenging in the U.S..
Also, distribution into the U.S. by Canadian growers like Sundial is unlikely, since the U.S. has plenty of its own growers ready to go. And the domestic market will favor local growers over dealing with import bureaucracies on once-illegal goods.
5 TECH STOCKS EVERY INVESTOR SHOULD OWN IN 2021
Sundial Growers’ Cloudy Q4
Another challenge for SNDL is the fact that it’s even having trouble competing in the Canadian market.
Revenue growth for the fourth quarter was 8%. That’s not very impressive for the massive growth expected (and realized) for many stocks in this sector. And this was lackluster growth on weak growth numbers from year over year Q3 numbers. Simply put, sales are getting weaker as the company matures and can’t seem to sustain the growth necessary to support big valuation.
The company is also having trouble managing other aspects of its business as it tries to balance the growth expectations put upon Sundial Growers stock with the rising costs of operating a high-growth cannabis operation that started as a sleepy ornamental flowers business.
Prepare for Bumpy Ride
This isn’t to say that SNDL stock is doomed. A change of management may be able to attract partners, straighten out growing pains and rationalize operations. A sale of the company to a bigger, better-run operation may pose a key opportunity for SNDL stock, since this market will consolidate during the next year or two as cash-heavy companies look to spend strategically on growth.
However, buying and just hoping usually isn’t a good investment strategy. Sure, you may get lucky. But in all likelihood, you’ll be able to write this one off on your taxes in the next year or two.
Unless SNDL has some great market niche, or a specific product that’s worth acquiring, it’s going to have to wait and hope to get purchased by a company for a price severely discounted from where it sits today.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
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When so many stocks in the same industry sink, there's usually a common denominator. In this case, one potential culprit is Vice President Kamala Harris' comments in an interview with the San Francisco Chronicle published yesterday. The vice president stated that the Biden administration has been too busy with other priorities to address marijuana decriminalization or other major cannabis reforms. This relegation of cannabis-related efforts to the back burner could be increasing investors' doubts that any action will be forthcoming in the near future.
However, marijuana stocks really began to slide on Wednesday after Natalie Fertig with Politico tweeted that the Treasury Department's Alcohol and Tobacco Tax and Trade Bureau has been meeting with various cannabis advocacy groups to discuss cannabis regulations. Investors could be more worried about the possibility that cannabis reform measures won't meet expectations than they are that no reform will happen at all.
https://www.fool.com/investing/2021/04/ ... gn=article
slecht nieuws: het gaat langer duren voordat president Biden hier iets aan gaat veranderen.
Goed nieuws: het staat wel op de agenda
20/4 staat er iets te gebeuren. Weeddag of zoiets
Ik volg het wel maar heb nog geen positie genomen.
SNDL aan 0.90$ is interessant om in te stappen. Als die zo laag zouden gaan natuurlijk.