The marijuana news today has the first promising inroads toward what may be the biggest form of medical marijuana yet to be untapped: pain management. According to a new study, access to cannabis leads to reductions in opioid-related deaths. (Source: â€śMarijuana legalization reduces opioid deaths,â€ť EurekaAlert!, August 7, 2019.)
The Economic Inquiry study examined how the changing legal status of marijuana has affected mortality in the United States over the past two decades. The study discovered that access to recreational marijuana reduced annual opioid mortality by a range of 20% to 35%, particularly when it came to synthetic opioids.
â€śRecreational marijuana laws affect a much larger population than medical marijuana laws, yet we know relatively little about their effects,â€ť said co-author Nathan W. Chan, PhD.
â€śFocusing on the recent wave of recreational marijuana laws in the U.S., we find that opioid mortality rates drop when recreational marijuana becomes widely available via dispensaries.â€ť (Source: Ibid.)
This is a huge breakthrough for the medical marijuana sector, provided that the research can be replicated in several other studies. You never want to put too much emphasis on a single finding, but this study could open up a huge new segment for medical cannabis.
You see, one of the major market segments that medical marijuana could dominate is pain management, which has long been under the purview of opioids and other addictive substances.
Swapping drugs like fentanyl for cannabis could dramatically reduce the premature deaths and health complications that many painkillers can cause.
Cannabis has long been touted for having restorative and pain-numbing qualities, but due to the federal prohibition in the U.S. and restrictions around the world, there hasnâ€™t been much investment in researching cannabis as a painkiller.
With laws relaxing day by day, however, we may be on the cusp of a radical redefining of the pain management industry. That could send medical marijuana stocks soaring.
Again, weâ€™ll need to see more studies support the conclusion that marijuana does help alleviate pain, or at the very least that it leads people to avoid opioids if marijuana availability is increased.
Furthermore, this kind of medical research strengthens the argument that marijuana should be legal. If theÂ substance is proven to not only help reduce crime rates and boost government revenue, but simultaneously help reduce the massive toll of the opioid crisis, well, thatâ€™s about as easy a sell for legalization as they come.
With federal marijuana legalization inching closer every day, finding new applications for marijuana (especially those that could be for the public good) is going to help strengthen the case for legalization in the U.S. and abroad. And the more countries that legalize pot, the higher that weed stock prices will likely rise.
While there is a lot of excitement in the marijuana news today surrounding political breakthroughs (like presidential hopeful Bernie Sanders once again declaring his support for marijuana legalization), ultimately investor eyes are fixed on two pot stocks that have caused massive waves as of late.
The first is Aurora Cannabis Inc (NYSE:ACB). After the company released a strong revenue guidance, its shares climbed, only to fall the day after as the stock market corrected itself.
ACB stock dropped three percent in early-morning trading today, but itâ€™s up about six percent over the past five days. That weekly gain is largely a function of the companyâ€™s positive revenue guidance.
Aurora is anticipating fourth-quarter revenue (net of excise taxes) of between CA$100.0 and CA$107.0 million, a huge leap from the CA$19.1 million in the previous year.Â (Source: â€śAurora Cannabis rallies and lifts cannabis stocks after offering revenue guidance,â€ť MarketWatch, August 7, 2019.)
The current FactSet consensus is for revenue of CA$112.0 million, but despite the company missing those expectations, Aurora Cannabis stock continued to climb due to its impressive performance compared to the previous year and quarter (the previous quarter saw revenue of CA$65.1 million).
ACB stock is worth keeping a close watch on due to its recent partnership with the Ultimate Fighting Championship (UFC). The two companies are working together on a research project looking to use cannabidiol (CBD) as a potential pain management treatment for mixed martial arts athletes.Â (Source: â€śAurora Cannabis partners with UFC to research CBD use to manage pain in MMA athletes,â€ť Global News, July 26, 2019.)
The partnership is expected to produce multiple studies on how CBD could be used for pain, inflammation, wound-healing, and recovery for MMA athletes.
Considering how bullish I am on the future of medical marijuana, this is a very solid move for Aurora. While the short term may see ACB stockâ€™s newly-acquired gains wiped out in the coming days, overall Iâ€™m rather bullish on Aurora CannabisÂ stock long-term.
Another massive name in the marijuana news over the past few weeks is Aphria Inc (NYSE:APHA). Aphria stock was down about 2.5% in early-morning trading today, but over the past week it has soared by 30% after it became the first major legal pot company to post a profit.
APHA stock soared immediately after the company said it earned $15.8 million during its most recent quarter and posted revenue of $129.0 million. The revenue figure beat the highest analyst estimate, and was up 75% from the previous quarter. (Source: â€śAphria becomesÂ first Canadian pot company to turn a profit,â€ť BNN Bloomberg, August 2, 2019.)
This has ignited a lot of interest in Aphria stock, and rightfully so. But I believe that the stockâ€™s recent gains are likely locked in and that its price movement will remain on the flatter side of things as the market downturn continues.
Still, much like with ACB stock, Iâ€™m currently more bullish on APHA stock than I have been in a long time. The companyâ€™s profitabilityâ€”if it can maintain its numbers and growthâ€”will continue to boost its share price.
The performances of ACB stock (black line) and APHA stock (blue line) over the past week are seen on the chart below:
Chart courtesy of StockCharts.com
The marijuana news today is full of good news, even if the near-term stock market performance hasnâ€™t been all that great.
Both ACB stock and APHA stock have seen big gains following strong revenue guidance and profitability, respectively. While the near term may see pot stocks continue to flag, the long term looks great.