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Is now the time to invest in cannabis stocks?

Is now the time to invest in cannabis stocks?

How to invest in cannabis stocks

Legalization talk and Reddit stock warriors are driving more people to invest in cannabis stocks, but the stocks aren’t returning on the investments yet.

The industry is booming and growing at an exponential rate, but due to federal law, there are very few publicly traded “cannabis” companies. For this reason, investors in the US looking to cash in on cannabis will look to Canada.

Aphria, Tilray, and Canopy Growth are a few of the big players in Canada, with billions in investment assets. However anybody who actually follows the industry in Canada could see plain as day that these companies are not performing.

So why are people just now deciding to invest in these companies?

Legalization and Reddit

Unless you’ve been living under a few rocks for the last month, you have likely heard about the GameStop Reddit controversy. If not, here’s what happened; hundreds of users of the social media platform’s subreddit r/WallStreetBets found out that a billion dollar hedge fund was shorting GameStop stock, buying stock in advance to drive down price with the goal of being bought out at their original buying price.

Investors from r/WallStreetBets decided to buy up as much GameStop stock as possible, forcing the hedge fund to cover its losses and pay out for the increased stock price. If it hasn’t become obvious, I’m not a stock expert, so excuse the lazy explanation.

Long story short, GameStop’s stock price rose from $34 to $340 in a couple days, making those who cashed out a lot of money, while others bought in late thinking the stock would continue to rise, only to watch it tank days later.

Now, with a democrat majority in the House and Senate and control of White House, the party is pushing for cannabis reform, and likely federal legalization. With multiple party members publicly speaking about their intentions, the Reddit swarm caught wind and started talking cannabis stocks. But unlike GameStop, Reddit couldn’t manipulate the cannabis stocks in the same way.

Tilray and Aphria Merger

After news surfaced that two of the largest cannabis companies in Canada would be merging together, a lot of investors tried to cash in on the opportunity. In December of 2020 when the merger was initially announced, the stock began to sore as more began to invest.

The investment experts at Reddit appear to have caught on a little too late, pushing everybody on the platform to invest in these companies just in the last week. Unfortunately they couldn’t drive up the price in the same way as GameStop, and the stock eventually fell 4% despite the increased activity.

In other words, the stock spiked temporarily, and smart investors who already bought in at $23/share at the beginning of February were able to cash out at $63/share on February 10th. By February 11th the stock price was halved.

All of this drives the questions a lot of enthusiasts and investors are asking; is now the time to invest in cannabis stocks?

Wait for legalization?

The reality is that for most Americans trying to cash in on cannabis, the market is very small, niche and not very profitable in the United States market. This is why you see so much attention focused on Canada’s cannabis companies, because they federally legalized cannabis in 2018.

While there are some companies in the United States that work within the cannabis industry and are listed on the stock exchange, they are typically ancillary businesses, in other words businesses that don’t work directly with the plant. Equipment supply companies, pharmaceutical companies that research cannabis, etc. are the typical companies you’ll find in the US market.

With little information and education regarding these companies and the industry as a whole in the US due to no federal reporting, now is not the best time to invest in cannabis stocks in the US. Keep in mind that THIS IS NOT FINANCIAL ADVICE, WE ARE NOT FINANCIAL EXPERTS, WE JUST LOVE CANNABIS.

Politicians in the US have been talking about legalizing cannabis for close to a decade, and it has yet to even be decriminalized. To put hope into our politicians and betting money on them (literally) actually making progress toward legalization would be unwise at this time.

Consider that it wasn’t Republicans, but moderate Democrats in the House that refused to pass the MORE Act last October, opting to wait until after the election because they had their own seats to protect. With more elections coming up in 2022, we can expect a similar approach by moderates in the party, inadvertently blocking any sort of legalization from passing.

For now, the smart move is to closely watch the Canadian market, and push your local legislators to support legalization in your state and on the federal level. It’s your money, so spend it wisely!

Idaho Senate Passes Measure To Block Marijuana Legalization

Idaho Senate Passes Measure To Block Marijuana Legalization

Idaho cannabis legalization blocked by state senate

The Idaho Senate on Wednesday approved a resolution to amend the state Constitution to prevent marijuana or other drugs from being legalized.

If the House follows suit, the action could create serious complications for activists who are seeking to put cannabis reform measures on Idaho’s 2022 ballot.

The Senate State Affairs Committee approved the resolution along party lines last week, and the full chamber has now passed it 24-11. If it gets a two-thirds majority in the House as well it will be placed before voters on the midterm election ballot.

The measure stipulates that “the production, manufacture, transportation, sale, delivery, dispensing, distribution, possession, or use of a psychoactive drug shall not be permitted in the state of Idaho.”

It would make an exception for substances that are approved by the federal Food and Drug Administration (FDA), but it would effectively kneecap efforts to establish a medical cannabis program that looks anything like those implemented in other legal states.

What makes the measure problematic for advocates is that, should the legislature ultimately approve it, the resulting constitutional initiative on ballot would take precedence over any statutory legalization measures that appear alongside it, regardless of the margin that any measure ultimately gets approved by.

Activists are dealing with this development as they work to collect signatures on an initiative to legalize medical cannabis and while a separate group is preparing to place adult-use legalization before voters.

The Senate-approved resolution says that the “normalization of illicit drug use is having a profound negative impact on Idaho citizens” and, therefore, it is “reasonable and necessary” to enact the constitutional change.

Activists say the proposal is anything but reasonable and is intended to undermine the democratic process, misleading voters by neglecting to directly explain how the measure would impact medical cannabis reform efforts and instead referring broadly to “psychoactive drugs.”

Here’s the language of the constitutional amendment that the lawmakers hope to place before voters: 

“Shall Article III of the Constitution of the State of Idaho be amended by the addition of a new Section 30 to provide that the production, manufacture, transportation, sale, delivery, dispensing, distribution, possession, or use of certain psychoactive drugs shall not be lawful in the State of Idaho unless such drugs are: (a) approved by the federal Food and Drug Administration and permitted by the state; (b) lawfully prescribed; and (c) lawfully dispensed?”

If approved, that would mean that Kind Idaho’s medical cannabis legalization measure and another initiative in the works to legalize for recreational purposes would be rendered null and void, regardless of whether a majority of Idahoans passed either of them.

Lawmakers reintroduce recreational Minnesota cannabis legislation

Lawmakers reintroduce recreational Minnesota cannabis legislation

Minnesota cannabis legalization bill introduced again

On Monday, House Majority Leader Ryan Winkler and other Democrat lawmakers reintroduced recreational adult-use cannabis legislation that addresses criminal justice inequities created by the current system and also allows law enforcement to focus on more serious issues, according to the bill.

The DFL says the adult-use cannabis bill is based on conversations with Minnesotans during the statewide “Be Heard on Cannabis” tour, which hosted town hall meetings in 15 communities spanning urban, suburban and rural parts of the state. Additionally, meetings were held with more than 30 organizations and associations, as well as consulting with Gov. Tim Walz, Lt. Gov. Peggy Flanagan and 13 state agencies. A House of Representatives spokesperson said 250 meetings were held with individuals and groups.

“The failed criminalization of cannabis has resulted in a legacy of racial injustice that can no longer go unaddressed,” Winkler, the bill’s chief author, said. “Adults deserve the freedom to decide whether to use cannabis, and our state government should play an important role in addressing legitimate concerns around youth access, public health, and road safety. Veterans and Minnesotans with serious illnesses like PTSD deserve better access to our medical program, which is not working well for most people. It’s time to legalize, expunge, and regulate.”

The proposal would “create a responsible regulatory structure focused on developing micro-businesses and a craft market; expunge most cannabis convictions; fund public health awareness, youth access prevention, and substance abuse treatment; provide grants, loans, technical assistance, and training for small businesses; require testing and labeling of products; restrict packaging based on dosage size; and allow limited home grow abilities.”

“It’s clear that our current cannabis laws aren’t working for Minnesota,” House Speaker Melissa Hortman said in a statement. “Smart, sensible legislation can address racial inequities in our criminal justice system, tackle the harms caused by cannabis, and ensure better outcomes for communities.”

According to the House, Black and white Minnesotans consume cannabis at very similar rates, yet Black Minnesotans make up 30% of cannabis arrests while representing just 5% of the population.

“The legalization of adult use-cannabis will result in health, economic, criminal justice, and civil rights benefits for Minnesotans, benefits already experienced by those in other states that have eliminated the criminal prohibition,” said Rep. Rena Moran (DFL-St. Paul). “Minnesotans, especially those from Black, Indigenous, and communities of color who have been disproportionately impacted will have an opportunity to live better lives and contribute to society by participating in the workforce. People have made their voices clear across the state, and it’s time to end our current harmful policies on cannabis.”

As of Nov. 4, 2020, voters in Arizona, Montana, New Jersey and South Dakota approved measures to regulate cannabis for adult-use. That brings the total to 15 states and three territories. A total of 36 states, the District of Columbia, Guam, Puerto Rico and the U.S. Virgin Islands have approved comprehensive, publicly available medical marijuana/cannabis programs.

“I remain committed to supporting a path forward for a responsible framework to legalize cannabis in our state. For too long we have turned a blind eye to the effects that prohibition has had on many of our communities of color,” said Sen. Melisa Franzen (DFL-Edina). “As more states continue to remove barriers to embark in this industry, Minnesota must not be left behind. We should lead the way toward ensuring public health and safety considerations are at the forefront of any legislation.”

The next steps, following the bill’s introduction Monday, will be a series of public hearings that allow residents to ask questions and provide input on the matter.

Pennsylvania governor makes budget pitch for legal cannabis in 2021

Pennsylvania governor makes budget pitch for legal cannabis in 2021

Pennsylvania cannabis legalization could happen in 2021

Pennsylvania Gov. Tom Wolf, as expected, has made legalizing recreational cannabis one of his administration’s top legislative priorities this year.

Wolf highlighted recreational marijuana in his budget proposal Wednesday and mentioned the urgency given adult-use legalization in neighboring New Jersey and the legalization push in New York.

“Now as our neighbors move toward legalizing recreational marijuana, we cannot afford to be left behind,” Wolf said in a news release laying out his legislative plan.

The plan didn’t provide licensing details.

But it did note that part of the revenue generated from legalization would be used for grants to support historically disadvantaged small businesses.

Marijuana Business Daily projects that an adult-use market in Pennsylvania would generate $800 million in sales in the program’s first full year and $1.8 billion in annual sales by the fourth year.

Pennsylvania’s Republican-controlled Senate is seen as the biggest obstacle to legalization.

Wolf, a Democrat, emphasized the issue’s bipartisan support among residents and the bipartisan support that occurred when Pennsylvania lawmakers legalized medical cannabis in 2016.

Pennsylvania’s MMJ market, by most accounts, has been a success since sales began in 2018, which could help persuade lawmakers to pass a recreational marijuana program.

Democrat Senate Leaders Announce Steps To Federally Legalize Marijuana In 2021

Democrat Senate Leaders Announce Steps To Federally Legalize Marijuana In 2021

Democrat senate leaders make plans to federally legalize marijuana in 2021

Three leading champions of marijuana reform in Congress said on Monday that the issue will be prioritized in the new Democratic Senate this year and that they plan to release draft legislation in the coming weeks to begin a conversation about what the federal policy change will look like.

Senate Majority Leader Chuck Schumer (D-NY), Senate Finance Committee Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) said in a joint statement that ending cannabis prohibition “is necessary to right the wrongs of this failed war and end decades of harm inflicted on communities of color across the country,” but that alone “is not enough.”

Three leading champions of marijuana reform in Congress said on Monday that the issue will be prioritized in the new Democratic Senate this year and that they plan to release draft legislation in the coming weeks to begin a conversation about what the federal policy change will look like.

Senate Majority Leader Chuck Schumer (D-NY), Senate Finance Committee Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) said in a joint statement that ending cannabis prohibition “is necessary to right the wrongs of this failed war and end decades of harm inflicted on communities of color across the country,” but that alone “is not enough.”

The lawmakers, each of whom has advocated for federal legalization, said that “we must also enact measures that will lift up people who were unfairly targeted in the War on Drugs,” especially as more states opt to legalize.

“We are committed to working together to put forward and advance comprehensive cannabis reform legislation that will not only turn the page on this sad chapter in American history, but also undo the devastating consequences of these discriminatory policies,” they said. “The Senate will make consideration of these reforms a priority.”

This is a narrative that’s been building in recent months, with Schumer saying on several occasions both before and after the election that he would work to move reform legislation with his new power to control the Senate floor agenda. Since Democrats secured a majority in the chamber, the stage is set for action.

“In the early part of this year, we will release a unified discussion draft on comprehensive reform to ensure restorative justice, protect public health and implement responsible taxes and regulations,” the senators said. “Getting input from stakeholder groups will be an important part of developing this critical legislation.”

bill to federally deschedule cannabis cleared the House last year, but it did not advance in the GOP-controlled Senate. Lawmakers like Schumer and Booker stressed that Democrats reclaiming a majority in the chamber was an imperative for any comprehensive reform to pass this year.

“After years of marijuana policy reform being neglected and mocked by [Senate Minority Leader Mitch McConnell (R-KY)] it is heartening to see these Senate leaders working together to repeal the senseless and cruel policy of marijuana prohibition,” NORML Political Director Justin Strekal said.

“We look forward to constructively engaging with Congressional leaders, other organizations, and those communities that have historically been most impacted by criminalization in order to ensure that we craft the strongest and most comprehensive bill possible to right the wrongs of the nearly a century of federal cannabis prohibition,” he said.

Will 2021 be the year of cannabis delivery?

Will 2021 be the year of cannabis delivery?

Cannabis delivery could become more available in 2021

With more sales than any other year and demand for cannabis higher than ever, will 2021 be the year cannabis delivery becomes widespread?

2020 was a difficult year, as if that even needs to be said. But there was one thing that helped millions of Americans get through the year.

Cannabis.

That’s not an exaggeration either. Americans bought 67% more cannabis in 2020 than the year before to deal with the stress of COVID-19, record unemployment and peak division in the country.

However despite the huge increase in sales, only a handful of states offer delivery options for recreational cannabis consumers.

Cannabis Delivery

Arizona, Arkansas, California, Colorado, Maine, Maryland, Massachusetts, Michigan, Nevada, New Mexico, New York, Oregon, Rhode Island and Vermont, are all technically states that offer some form of delivery service for consumers.

Strict regulations and limitations however have made it so only a few of the states listed actually have a current, implemented delivery system. For example, Massachusetts has been dealing with resistance to their new delivery rules, with the cannabis dispensary association in the state going so far as to sue. Colorado, while passing a law allowing delivery in 2019, has yet to implement it for medical patients, while recreational consumers might have to wait until 2022 for access to the same service.

Other states in the list have only recently legalized medical or recreational cannabis with inclusions for delivery in their legislation. These states such as Arizona, Arkansas, New Mexico and others, while passing legalization bills in 2020, have yet to begin sales of cannabis in general, meaning delivery also hasn’t begun.

The question that a lot of consumers are asking, especially after going through a year of the country’s worst pandemic since the early 1900s and bolstering cannabis sales like never before, is where the hell is the delivery option?

COVID and cannabis

The impact of COVID-19 on businesses across every industry in the country has been stark. Yet while thousands of businesses suffered and even closed down, cannabis businesses everywhere thrived. But almost every single sale was done in-person.

This doesn’t seem to fit the overarching narrative of the last year that social distancing and avoiding others is all but paramount. In this same time Drizly, an alcohol delivery app, became available in 26 states.

In other words, half the country can get alcohol delivered to their door, yet only a couple states allow those with legal access to cannabis to have it delivered. And that is all missed revenue. Bud.com, a delivery service that operates in Northern California, experienced a 500 percent increase in sales after lockdown orders in mid-March, according to Dean Arbit, the chief executive of the company.

So if there’s no shortage of evidence that cannabis delivery can be highly profitable, what are we, or more accurately, what are states waiting for?

Will 2021 be the year?

The events (and profits) of 2020 definitely have more states and cannabis businesses talking about delivery. With no end to social distancing and COVID restrictions in sight, we should expect cannabis sales to continue to grow through 2021, with demand for delivery options growing as well.

Similarly to legalization in general, no state has the same cannabis delivery laws. In other words, there is no single template for states to follow that has seen continued success. Like legalization, some states may be waiting to see another implement delivery successfully from the start, and copy them.

Other states have issues with the laws they already have, such as competition against brick and mortar stores in states that allow delivery straight from distribution centers.

There is little doubt the more states will legalize some form of cannabis delivery in 2021. To expect every state with recreational or medical cannabis to make it available however is a big ask. One that is highly unlikely to happen in just one year.

But if there is any way to describe the cannabis legalization movement, it’s unpredictable.

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