Just a few years ago, you would have never found these two words in the same sentence let alone be the topic of conversation amongst investors, but a lot has changed ever since Colorado and Washington went rogue and legalized cannabis at the end of 2012. Since then, the total number of states that have legalized the plant for adult recreational use has jumped up to 15 states plus three territories including Washington D.C. This week the governor of Virginia is expected to sign the bill to legalize adult recreational use in his state and will make it the 16th state to do so. Twelve other states currently have recreational legalization measure on the table also. Beyond that, it is legal in 36 US states for medical purposes.
Our neighbor to the north, Canada, legalized cannabis in 2018 and many in the US think that the federal government is currently not far behind them, especially considering the number of states that have already legalized it. With the legalization of cannabis, the opportunities for companies to grow in this industry has exploded. Another major milestone happened in 2018, the cannabis company Cronos Group became the first in the industry to receive SEC approval and be traded on the US stock exchange. Since then, many new companies have emerged onto the market and this is proving to be a highly competitive industry.
News that is fueling this fire is that last month, the Senate Majority Leader Chuck Schumer pledged that he, Senate Finance Committee Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) would release a draft bill to end federal marijuana prohibition “in the early part of this year.” More recently, this past Friday Senate Majority Leader Chuck Schumer sent out a fundraising email to supporters where he discussed Democrat’s agenda for change this year, where he reiterated the fact, “It’s time to decriminalize marijuana nationally.” All this talk of federal legalization has the industry waiting in anticipation. Although companies are already being traded on the stock market, full federal legalization would not only open the flood gates of potential customers but it would also give everyone the green light to go 100% in building operations across the country.
Some of the companies leading the way in the new legal cannabis market are Canopy Growth, Tilray, and Aurora Cannabis. These are three of the biggest names in the industry but like I mentioned earlier, this is a blossoming industry with a lot of competition vying for space. Leave me a comment on what are your thoughts on investing in cannabis? Is it a good idea to invest now or wait until full legalization? Will it be too late to invest then?