Cannabis in the news December 5, 2018

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In volatile markets, news on cannabis stocks and the cannabis industry is at a premium.  As always, we examine all the news and select for you the articles that are most likely to shed light on your future investments.  

1. The Quebec government has confirmed its intention to reduce access to cannabis by introducing legislation that seeks, among other things, to increase the legal age to 21.

Bill 2 would also block cannabis use in parks, on street and all other public places.

The legislation’s move to raise the legal age from the current 18 makes good on a campaign promise from the new provincial government. The Coalition Avenir Quebec proposed that change as a way to help limit any damaging effects the drug’s use may have on the still-developing brains of young Quebecers.

The federal law legalizing cannabis consumption set the minimum age at 18, although it gives individual provinces the power to raise it. Quebec would be the first to do so.

Lionel Carmant, the provincial government’s junior health minister, said he hopes to have the legislation passed by March 2019.

2. Some cannabis research is hinting at the real possibility the drug could someday be used to help protect diabetics from the blood-glucose swings at the heart of the disease.

Early, and as yet inconclusive, research suggests marijuana could have preventative as well as diabetes treatment applications.

While any correlation between marijuana and diabetes prevention is largely inconclusive, a 2012 study suggests as much as a 58% reduction in the risk of diabetes by using the drug. A larger 2016 study published in the Journal of Diabetes Research found no correlation. Still, as a treatment to bring down inflammation, cannabinoids could help to stabilize blood sugars.

Any possible benefits require extensive research, say researchers, but a renewed emphasis on studying the medicinal benefits—if any—of cannabis may yield real wins for the growing number of diabetics.

3. The maker of Marlboro cigarettes may be in talks for the takeover of Canadian cannabis producer Cronos.

Altria is reportedly looking at the deal as a way of diversifying its business beyond tobacco products.

Cronos shares rose more than 6% Tuesday on the news. The stock is listed on the Nasdaq exchange.

Altria, the parent company of Philip Morris, said no agreement about a transaction has been reached. In fact, there’s no guarantee any talks would lead to an investment of any kind in Cronos, the tobacco giant said.

Still, a takeover would mark one of the largest deals between mainstream tobacco and the nascent marijuana industry.

Those tobacco producers face the same sort of market pressures as alcohol producers, but they’ve been slow to follow the lead of giants like Molson Coors and Constellation Brands.

4. Medical marijuana advocates—including pharma giants—are calling on government to let Canadian pharmacies sell medical marijuana.

The newly formed Common Initiative lobby group is urging changes to Canada’s medical marijuana regulations to reduce the risk of patients self-medicating through the recreational market.

Part of that is moving medical cannabis sales into pharmacies and beyond direct-to-consumer mail distribution.

“The pharmacist is the best health-care professional and has your entire medical profile,” said Michel Robidoux, president and general manager of Sandoz Canada, a division of Swiss pharmaceutical giant Novartis AG. “If you use medical cannabis under a doctor’s recommendation, there should be visibility by your pharmacist.”

5. Shares of cannabis producer Aphria continue to battle against criticism that sent the stock plummeting 27% earlier this week.

The drop reflects short-seller concerns about the company’s Latin American operations. Quintessential Capital Management and Hindenburg Research published a report that alleges Aphria acquired foreign companies in Jamaica, Argentina and Colombia at “vastly inflated” prices that appear to be “largely worthless.”

Aphria has called the allegations “false and defamatory.”

Both GMP Securities and Bank of Nova Scotia analysts have now placed their Aphria ratings “under review.”

But the company that sold Aphria those assets came to its defence Wednesday.

SOL Global Investments Corp. issued a statement saying it was “satisfied with the outcome of the transaction,” and reaffirmed its belief in the quality of the assets.


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