Companies like Medical Marijuana Inc. (OTCMKTS:MJNA), Tranzbyte Corp. (OTCMKTS:ERBB), and Growlife Inc. (OTCBB:PHOT) were on the receiving end of another dose of good news on Thursday.... not that they necessarily needed it. That's when a study conducted by researchers at the University of Texas was published, illustrating how not only did the advent of medical marijuana not increase crime, but rather, coincided with a (relative) decline in crime.
Surprisingly, shares of PHOT, MJNA, and ERBB didn't respond exceedingly well to the report. In fact, Medical Marijuana shares fell following the news, while Growlife shares were flat. The only winner following the University of Texas publication was Tranzbyte Corp., with its stick soaring 30% on Friday, though it's possible other news from ERBB on Friday was the key catalyst for that day's bullish move.
So why wasn't the study more of a catalyst for the industry's stocks (stocks that have up until this point rallied on even the slightest puff of industry-supportive news)? There are two likely reasons. One of them is the distinct possibility that stocks like PHOT, MJNA, ERBB, and the all the rest that have benefited from marijuana mania are finally experiencing PR fatigue and - no pun intended - publicity burnout. The same premise or story can only be circulated so many times before investors grow immune to it and stop responding. With nearly three months of such chatter under our belts following the January 1st legalization of medical marijuana (or recreational marijuana) in a handful of states, it's now time for the industry to put up or shut up. First quarter's earnings will be the proof of the pudding.
The other possible reason the medical marijuana industry's stocks didn't respond all that well to the publication's findings is a question of their relevancy - the researchers only reviewed data from 1990 through 2006. Detractors pointed out that a large number of dispensaries weren't established until afte r2006, and it's conceivable that the situation and impact of legalized medial marijuana now has changed within the past eight years. Still, detractors have yet to explain how or why crimes would have fallen - if selling medical marijuana risks increasing crime - during that study's timeframe when there were at least some dispensaries in operation for at least a decent portion of those sixteen years.
That being said, while some of the most voracious supporters of medical marijuana and/or investors of companies like Tranzbyte, Growlife, or Medical Marijuana are pounding the table because of the findings, even the affected companies themselves don't seem overly keen on holding the research up as a trophy or a milestone in their quest for wider legalization. It looks like they're holding out for more and fresher data on the matter, and holding out for the impact of recreational marijuana in particular.
In other words, the University of Texas study isn't a game-changer for the industry. It's just a modest feather in medical marijuana's cap.
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