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The Great Smoky Mountain Journal

Staff, Wire Reports

Posted: Monday, December 31, 2018 04:29 PM
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Marijuana Business Related Stocks Tank After AG Session's Announcement Of New Pot Rules

A strong rally in cannabis-related stocks this week that marked the start of sales of recreational marijuana in California came to a screeching halt Thursday after the U.S. Dept. of Justice threw a spanner in the works for the nascent weed industry.

U.S. Attorney General Jeff Sessions, a longtime marijuana opponent, is said he is rescinding an Obama-era policy that gave protections to states that have legalized marijuana as long as they abide by a series of guidelines.

The news sent cannabis stocks sharply lower, with Nevada-based Cannabis Sativa Inc. CBDS, -16.32% sliding 25%. The company is involved in the research, development and licensing of marijuana products. Colorado-based cannabis farmer GrowGeneration Corp. GRWG, -19.06% slid 21%.
 

Many of the listed cannabis companies in North America are based in Canada, which is gearing up to fully legalize marijuana later this year. Those stocks were caught up in the downdraft, with Toronto-based medical marijuana distributor Supreme Cannabis Co. Inc. SPRWF, -2.96% down 13%, while Ontario-based rival Canopy Growth Corp. WEED, -4.99% slid 12%.

Horizons Marijuana Life Sciences Index HMMJ, -4.07% which started trading on the Toronto stock exchange last month and tracks more than 20 marijuana-related companies in North America, was down 10%.

Shares of ETFMG Alternative Harvest ETF MJX, -4.05% fell 7%. The fund switched from tracking companies involved in Latin American real estate in December to one following an index of cannabis companies in the U.S. Those include Cronos Group Inc. MJN, -2.04% down 13%, GW Pharma PLC GWPH, -1.14% , down 1.3%, Insys Therapeutics Inc. INSY, -15.47% , down 15% CanniMed Therapeutics Inc. CMED, -3.94% , down 7% and Turning Point Brands Inc. TPB, +0.80% down 2%.

Arcview Market Research said earlier this week that the legal marijuana industry is expected to generate nearly $40 billion in economic impact by 2021. That would be roughly a 150% increase in economic output from the $16 billion cannabis generated in 2017.

The S&P 500 SPX, +0.46% was up 0.5% Thursday and the Dow Jones Industrial Average DJIA, +0.57% was up 0.6%.