Marijuana News Today: Marijuana ETFs Get Huge Boost From SEC Approval
Marijuana News Today
The marijuana news today is bullish on the future of the pot sector as marijuana exchange-traded funds (ETFs) were officially approved to be listed on U.S. stock exchanges following a ruling from the U.S. Securities and Exchange Commission (SEC).
While marijuana ETFs have existed for over a year now, they have, up to this point, been relegated to Canadian stock exchanges, due to U.S. law prohibiting marijuana at the federal level.
With the new ruling, however, cannabis ETFs that are able to demonstrate, using an independent legal opinion, that none of their holdings violate federal law, are now permitted to list in the United States. (Source: “SEC green light prompts rush into marijuana ETFs,” Financial Times, October 6, 2019.)
While the drug is still illegal at the federal level—which could present a roadblock to cannabis ETFs looking to list on the Nasdaq or New York Stock Exchange—companies that operate adjacent to the marijuana industry will now have no problem being incorporated into ETFs.
There has been something of a rush now for marijuana ETFs to list on stock exchanges, in what some believe is the result of a concern that only a few of them can be winners.
Consider this the first-mover advantage; some analysts see investors as looking to lock in to a select few marijuana ETFs, to the detriment of all others.
I’m not sure I necessarily believe that, since there are still so many different markets waiting to open up to marijuana investors.
For instance, it’s not far-fetched to believe that, within the next five years or so, much of Europe and the U.S. could be legally open to marijuana production and sales.
That would see a massive generation of new marijuana companies and publicly traded pot stocks, leading to different marijuana ETFs focusing on various parts of the industry.
Now, it’s a given that these smaller marijuana companies will likely eventually end up consumed by larger players, but that in and of itself can be a hugely profitable investment for marijuana bulls.
In fact, we could see half-a-dozen marijuana rushes in the near future as several major markets legalize pot and new marijuana stocks pop up in those jurisdictions.
Which is to say that there is room in the marijuana stock market for a variety of pot ETFs. From tracking industry stalwarts, to looking at the medical marijuana sector, to focusing on emergent markets, there is frankly no shortage of potential within the marijuana industry.
As such, I anticipate that marijuana ETFs can generate big profits for investors down the line. Picking the right one at the right time will be paramount to investors’ success.
Speaking of success, the marijuana news today has us refocusing on what have been two of our top pot stocks in these tumultuous times.
The first one I’m looking at is Curaleaf Holdings Inc (OTCMKTS:CURLF, CNSX:CURA). Curaleaf stock is up substantially over the past five days, having gained about 20% in that time.
For investors who read this column pretty regularly, they’ll know that I’ve been bullish on CURLF stock for months now. The principal reason being that this is a marijuana stock that operates across the United States.
Therefore, it’s not only in a position now to see massive profits going forward, but it’s uniquely suited to be one of the strongest marijuana stocks when U.S. federal marijuana legalization comes.
On top of all that, the company recently had a pretty substantial setback. At the time, I anticipated that a big recovery was in store for Curaleaf stock. And, as we can see today, that recovery has been swift and strong.
I believe that many more gains lie ahead for CURLF stock as the company continues to weather the current marijuana correction and is poised for massive gains as the marijuana market continues to expand.
Furthermore, Curaleaf stock has yet to be listed on a major U.S. stock exchange, due to its technical violation of federal law by operating marijuana businesses in U.S. states where the drug is legal at the state level.
The Feds, however, have recently taken a step back, and there appears to be no marijuana crackdown in the works from them.
Another marijuana stock I’m very bullish on that also experienced a solid recovery is Innovative Industrial Properties Inc (NYSE:IIPR).
Unlike CURLF stock, IIPR stock has taken the slow and steady approach to recovery. And while the two companies took different routes, both ended up at the same destination: big gains for well-timed investments.
Innovative Industrial Properties stock hit a low point about a month ago and has since seen strong gains and a steadying of its share price.
While it hasn’t seen the price growth that Curaleaf stock experienced, it is still up by over 100% year-to-date, and it has since stabilized amidst what has been a very volatile time for pot stocks.
It’s worth remembering that Innovative Industrial Properties is a marijuana real estate investment trust (REIT), meaning it operates adjacent to the marijuana industry.
As such, it’s one of the few U.S. marijuana companies that is listed on a major stock exchange. It means that IIPR is inoculated from the major volatility in other areas of the cannabis industry, due to it being a marijuana REIT.
Furthermore, the company distributes a healthy dividend each quarter, making it one of the only pot stocks to do so.
The overall outlook for IIPR stock, then, is bullish. Innovative Industrial Properties is a company that is poised for strong gains, is better suited to handle marijuana stock market corrections than nearly any other pot company, and pays its investors each quarter.
CURLF & IIPR Stock Performances
The performances of CURLF stock (black line) and IIPR stock (blue line) over the past week are seen in the chart below:
Chart courtesy of StockCharts.com
Every day we see the marijuana industry score another win with regulators, and the marijuana news today is no different.
As the industry matures, we’re going to see more and more opportunities for investors, with marijuana ETFs listing on U.S. stock exchanges being the biggest one today.
On top of that, the marijuana stock market correction is creating opportunities for investors to find stocks on the bounceback and see big-time short-term gains. The legal cannabis industry is as full of potential as ever (for those who knew the right places to look).