The cannabis industry is back in the big leagues. A number of U.S. states have legalized marijuana use in some form, and there are even moves to legalize it nationwide. So why are pot stocks getting a boost? It’s a combination of factors: 1. Lawmakers in several states have already approved medical marijuana, and it looks like a handful of states are likely to follow suit in 2018. 2. The industry is growing rapidly in the U.S. 3. Marijuana may become a legal commodity in Canada.
The marijuana industry is booming, and a big reason is that more and more Americans are turning to pot for a better health. Not only are some states legalizing medical marijuana, but 29 states have also legalized recreational use, and the nation is on track to legalize recreational use nationwide.
Lately, you’ve probably heard about the marijuana industry. It’s been one of the fastest-growing corporate sectors in the world, and more states are turning to approve medical weed. As a result, investors have had a field day with pot stocks. Businesses like Canopy Growth (NYSE: CGC) and Cronos Group (NASDAQ: CRON) are the poster children of this industry.
Alabama legalizes medical marijuana
There’s been no shortage of good news for American marijuana lovers lately. Sure, stock prices have been a bit erratic, but overall, most of the major trends in U.S. marijuana stocks have been positive. Another big win for the industry was the recent news of the legalization of medical marijuana in Alabama. (Source: Alabama governor signs medical marijuana bill, CNN, May 17, 2021). But why is legalizing medical marijuana in Alabama so important? Well, it’s not – at least not as a single event. Alabama is not a particularly populous or prosperous state, so the material impact will be minimal in the grand scheme of things. But what legalization means in Alabama is worth much more to marijuana investors in the long run. The first thing that is important to note: Alabama is a very conservative state. Alabama, which along with Mississippi and Louisiana is perhaps the heart of the Deep South, is generally considered one of the anti-marijuana states, at least in the traditional view of the subject. But this dynamic is changing. For decades, cannabis has been considered a left-right issue in American politics. This means that some Democrats supported the legalization of marijuana in the United States, while most (if not all) Republicans opposed it. Over the past few decades, however, there has been a seismic shift in the way we talk about cannabis in the United States. Most Democrats (or at least most party leaders) have come out in favor of legalizing marijuana in the United States. And the issue has crossed political divides, with many Republican politicians and voters in favor of legalizing marijuana. In Alabama, this shift in the political landscape is clearly beginning to take shape. Alabama’s governor recently signed a bill legalizing medical marijuana that had been approved by the state’s legislature. The legislature, I might add, is 75% Republican. In other words: The legalization of marijuana is rapidly losing ground as a divisive political issue and increasingly seems to be an inevitability. When I say this seems like an inevitability, that’s not entirely true; it is an inevitability. The federal legalization of marijuana in the United States is imminent, it’s just a matter of when. While we’re unlikely to see any major changes at the federal level in the next few years, due to gridlock in Congress and the bipartisan atmosphere, the U.S. could find itself in that dual situation where many states have legalized weed, but the federal government is unresponsive. So the fact that Alabama is legalizing medical marijuana is a very good sign for the future of this drug in America. It is also worth checking how the drug has been legalized in that state. The legalization bill was passed by the state Congress without an initiative of a direct vote. For years, especially in the early days of cannabis legalization in the United States, politicians blamed citizens by forcing referendums (direct votes) on the issue. It was seen as a way to legalize marijuana without risking a political blow. The fact that the Alabama legislature has decided to legalize marijuana for medical use is a testament to the growing acceptance of the drug in the country. In other words: The amount of political capital to support the legalization of marijuana in the United States is now drastically reduced. Except for the most ardent opponents of cannabis, proponents of legalization are more likely to win votes than lose them. But what does this mean in the short term for the company’s shares? Well, not much. For now, marijuana’s actions will be more unpredictable than ever – perhaps even more unpredictable than usual. Why? In a nutshell: COVID-19. While the pandemic did not lead to a decline in marijuana use (which I predicted from the beginning) and a sharp rise in marijuana stock prices after a brief dip, it did have an impact on marijuana supply chains. So while many people are turning to marijuana, the pandemic has caused a number of structural problems that have affected profits. But these are temporary setbacks. When the pandemic subsides and the economy comes back to life (which many economists expect in 2022), I think cannabis stocks will be among the best performing stocks in the coming year. This means that for investors willing to tolerate short-term volatility, there is every reason to consider investing in marijuana in 2021.
It is safe to say that there have never been so many advocates for the legalization of marijuana in the United States, at least in modern history. We see states of all political stripes – from dark red to dark blue to purple – supporting legalization in one form or another. This reflects the general trend of U.S. support for marijuana legalization, as shown in various polls. US federal policy may be stuck in the past for a long time. Moreover, older American politicians (like President Joe Biden) are being replaced by younger generations who are more accepting of pot. Whether or not we see new movement on the political front, with the end of the pandemic we can expect the problems in the marijuana supply chain to be gone by 2020. All of this is the culmination of what will likely be a huge year for marijuana stocks.Not only is medical marijuana being legalized in California, but the stock market is getting a boost from the news.. Read more about cbd stocks to watch and let us know what you think.
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