Cannabis stocks moved lower for the second week in a row along with the rest of the market, but Canada’s newly implemented “Marihuana for Medical Purposes Regulations” (MMPR) has many companies moving closer to commercialization.
Creative Edge Nutrition Inc. (OTCBB: FITX), GrowLife Inc. (OTCBB: PHOT), Endexx Corporation (OTCBB: EDXC), Easton Pharmaceuticals Inc. (OTCBB: EAPH), and other cannabis stocks are all positioning themselves to capitalize on opportunities in Canada. Under the new regulations, a limited number of cannabis growers will be able to supply a market that’s estimated to eclipse 500,000 medical marijuana users by 2023 with full government support from Health Canada and access to the banking sector.
Cannabis investors have also been keeping an eye on numerous ballot initiatives to legalize both medical and adult use marijuana in more U.S. states. While working on new regulations that would provide cannabis businesses with access to the banking sector, the Obama Administration also signed a farming bill into law this week that legalized the industrial production of hemp. These moves could suggest increasing leniency on the part of the federal government on the cannabis industry.
What's New?
- Companies Target Canada’s Cannabis Market – Canada’s medical marijuana market is rapidly evolving with the passage of its MMRP regulations which will transfer production of medical marijuana to centralized commercial producers in April of 2014 and opens the doors to enormous opportunities in the space.
- New Farm Bill Green Lights Hemp Cultivation – President Obama will sign a five-year, $1 trillion farm bill into law that eases restrictions on hemp. Cannabis experts believe this is a step in the right direction by setting a key precedent on a federal level for large-scale cannabis cultivation.
- Tranzbyte Readies Automated Cannabis Systems – Tranzbyte Corporation (OTCBB: ERBB) announced that Vending Design Works is preparing to ship the first of its specialty cannabis dispensing machines featuring proprietary customer identification, live 2-way interactivity and several forms of payment.
- LiveWire Forms Division to Focus on Cannabis – LiveWire Ergogenics Inc. (OTCBB: LVVV) setup LiveWire Herbaceuticals to develop THC and CBD chews that have little or no aftertaste. The chew and energy drink company will sell the products in states where cannabis is legal through existing dispensaries.
- California Adds Cannabis to November Ballot – California Attorney General Kamala Harris approved a ballot initiative for the November 2014 election. Recent polls suggest that 60% of likely voters would support cannabis legalization after successful efforts in several other states.
What to Watch This Week
The cannabis sector saw some profit-taking this week along with the rest of the market, as evidenced by the fall in the Marijuana Index™, but Canada’s new MMPR regulations and ongoing industry support in the U.S. could boost the sector over the long-term. Next week, traders should watch for a modest recovery with many stocks in the sector looking somewhat oversold while also keeping an eye on regulatory actions.
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