Marijuana Stock News
The marijuana stock market is a constantly updating, evolving beast. There’s so much going on day to day in terms of marijuana stock news that it feels like you can’t even keep up sometimes. Because unlike other industries, marijuana stock news is only half about pot stocks, with the other half firmly focused on the political side of one of the most controversial drug movements around: U.S. weed legalization.
So when it comes to pot stocks, they can be some of the more taxing investment opportunities around, even if their potential payoff may warrant that extra legwork on the investor’s part. It’s one of the reasons I like writing about weed stocks so much—I get to combine my passion for politics with my interest in finance and help everyday investors make the right moves in the market by seeing what’s ahead over the horizon.
Since I’ll be going on vacation for a little bit and I do love to keep everyone up to date, let’s take a look at some the biggest news stories that have taken place in the marijuana stock market (there are a lot) and then we’ll talk a bit about where I see marijuana stocks 2018 going. We’ll take the current lay of the land and combine it with a projection of the future, so to speak.
U.S. Weed Legalization
No single event in my mind would have a more profound effect on the marijuana stock market than a total U.S. weed legalization policy put in place by the government. While we’re still long ways away from that, even if the majority of Americans have come out in support of legal marijuana, there are some promising signs that point towards a green future.
The most important development would be the bill proposed by Sen. Cory Booker (D-NJ), who not only wants to legalize the drug, but also actively encourage and incentivize the remaining states to follow suit, not to mention dissuade drag on the law by penalizing states that don’t adopt legalization legislation.
One of the biggest points of contention in the U.S. surrounding marijuana legalization is that the states and federal government are all over the place in terms of where they stand on the drug. And of course, by nature of having a new sitting president in the White House, the new administration has taken a dramatically different take on marijuana than the Obama White House did.
This kind of changeover and confluence of ideals has created a difficult balancing act for both legislators and pot activists. Ultimately, for marijuana legalization U.S. to truly blossom, the country needs to have federal protections in place for the drug. Otherwise, no matter how many states pass legislation allowing medicinal and recreational use, there’s no guarantee that the federal government won’t send its agents in to shut the whole operation down. While that scenario is unlikely, the mere threat of it is still daunting for investors.
Not to mention that transportation and shipment of the drug are made needlessly complicated by the current laws in place.
So the move by Sen. Booker, while doomed to fail, is a good step towards more and more progressive legislation that will hopefully keep us on the path towards U.S. weed legalization.
What makes this even more interesting is that Booker is a rising star in the Democratic party and is being bandied about as a potential challenger for Trump in 2020.
Sen. Bernie Sanders (I-VT) was the last politician before Booker to propose comprehensive marijuana reform, with Sanders’s proposal falling a step short of Booker’s plan to encourage states to adopt pro-marijuana laws.
But the good thing for legal pot advocates is that Sanders is also seen as a potential Democratic nominee for president. In theory, the Democrats’ choice for president may come down to a selection between two men who both support a radical shift in the pot debate towards legalization.
This is frankly uncharted territory as the marijuana industry, and by extension marijuana stock market, have both been a political albatross, at least on the federal level.
Remember that even Barack Obama, who said he smoked weed when he was younger, took a laissez-fair stance on pot rather than an aggressively reformist approach, preferring to staying out of the way of states and letting them decide their own fate.
The current administration seems to be headed down different tracks, but we’ll touch on that in the next section.
U.S. Pot Laws 2017
In direct opposition stands the Trump administration, which has taken a rather regressive view on the legalization of pot in the U.S.
While President Trump went back and forth during the campaign about what he would do concerning marijuana laws in the U.S. (which, to be fair, he did on a number of different issues), he initially said he would follow the Obama model and leave it up to the states. Of course, he never cited Obama by name, but that was the gist of his position in several interviews.
Fast forward to now, and we have a very different Trump on our hands. Part of that, of course, is fueled by the appointment of Attorney General Jeff Sessions.
Sessions is one of the most adamant drug crusaders of our day, and has targeted marijuana as a drug that ought to be curtailed in its use and its proliferation as a legalized substance.
He even assigned a task force to study the impact of legal weed on the states where the drug was freely available. In Sessions’s mind, this was the perfect opportunity to gain the ammunition he would need to defy the majority of America’s will and go after marijuana.
Well, ironically enough, what ended up happening is that Sessions looked the fool. The task force came back and basically told him to cool off, saying that it was best to wait and see how things would develop, which is a politic way of saying that the current system is better than the draconian one Sessions supports.
The fallout has not been major, but it will likely be enough to derail Sessions’s push towards harsher enforcement of federal drug laws.
Couple this with the fact that Trump has grown more erratic in his hiring and firing in the White House, and Sessions may be in the hot seat himself. Trump has publicly criticized the attorney general via his favorite official communication channel—Twitter—for recusing himself from the Russia-Trump collusion allegations.
Which is to say that the future of U.S. marijuana legalization may be in for a shakeup very soon, for good or ill, depending on how the drama shakes out in D.C.
New Marijuana Stock Opportunities
Medical marijuana and recreational marijuana are both well-covered in terms of how they project to be big, billion-dollar businesses in the near future. But what about other industries that are developing around marijuana?
For instance, we covered an interesting new option for investors looking to get into the marijuana stock market called marijuana real estate.
Marijuana real estate is the practice of buying land and renting it to marijuana producers as a way to mitigate costs for the marijuana growers themselves. What are the costs? Well, the fact that what marijuana growers are doing is technically illegal as far as the federal government is concerned dramatically ups the potential for catastrophic shifts in fortune.
Just take at the marijuana real estate stock chart below, for example.
Chart courtesy of StockCharts.com
For instance, if a marijuana grower is operating in Colorado and is growing its product, making a living, abiding by the law, there’s still nothing stopping federal agents from coming in and shutting everything down. Then the company would effectively be killed off and sitting on a ton of land that it can’t do anything with at the moment. That would drive it potentially towards bankruptcy or at the very least create an environment where opportunistic buyers would come in with low-ball offers on the land, looking to take advantage of the misfortunes of the grower.
The marijuana real estate business helps cut these risks for marijuana producers by leasing the land to the companies. The result is that the growers are not on the hook for millions in terms of land investment should they ever be shutdown, while the marijuana real estate company collects rent so long as the marijuana company is in business.
In the unfortunate circumstance that the marijuana company is shut down by law enforcement, the marijuana real estate company that owns the land only loses a tenant, and therefore is in no real rush to sell the land, meaning it can field higher offers from outside purchasers. Or, conversely, it can lease the land out to a different industry altogether. Or even wait for the laws to relax again and find a new marijuana grower.
See? A perfect example of the intersection between politics, law, and marijuana stocks.
The future of weed stocks lies in marijuana news, which means that in order to properly play the market, investors need to be aware of what’s going on both on the NASDAQ and on C-SPAN.
It’s not easy, but for those looking to make the most out of their marijuana investments, it’s a necessity.