Is Weed Legal in Nevada?
Sin City got a little more sinful in the eyes of many as marijuana was legalized for recreational use in the state of Nevada at the beginning of July. As we’ve come to expect, the legislation led to a bit of reefer madness, with millions of dollars being generated in sales and taxes in a few short days after the Nevada legal weed became widely available.
Nevada recreational weed, however, hasn’t had the smoothest rollout (more on that later), but what investors are looking for are Nevada marijuana stocks. That is to say, the best Nevada marijuana stocks that have benefited from legalization.
Before we get into the details of which shares are likely to be the best Nevada marijuana stocks, let’s take a step back and do a quick overview of how the Nevada legal weed process went down, and what it means for the future of pot legislation.
First, as you may have heard, a state of emergency was declared in Nevada due to pot. No, it wasn’t because the smokers had gone crazy or rioted or anything. Rather, it was an altogether mundane reason that led to the state of emergency: faulty legislation.
You see, when marijuana legalization was being passed, lawmakers decided that only those with a liquor distributors license would be authorized to transport marijuana. Marijuana retailers were concerned that the supply lines would dry up, as people have literally been lining up out the door in the summer desert heat just to get their hands on some Kush.
This led to the governor declaring a state of emergency, allowing the Nevada Tax Commission to vote on the legislation and ease up on the restrictions, which is exactly what they did on Thursday. (Source: “Nevada approves emergency regulation aimed at solving marijuana shortage,” Los Angeles Times, July 13, 2017.)
And not a moment too soon, as some retailers feared they were on the verge of running out. And that would have been a tragedy both for commerce and the state.
The Nevada Dispensary Association estimated that dispensaries earned about $3.0 million in sales in three days. As a result, the state profited about $1.0 million in tax revenue between July 1 and 4. Obviously, that’s not a bad little windfall for the state, and any halt on the upstart industry would be detrimental to that sweet little tax boost that might be coming for Nevada. (Source: “Nevada dispensaries running out of marijuana; governor steps in,” Reno Gazette-Journal, July 7, 2017.)
All things considered and legal miscalculations aside, it’s looking like the beginning of the recreational weed Nevada project is going well, which may encourage other states to step up to the plate and begin legislation on legalized marijuana, which will make the following Nevada marijuana stocks all the more valuable.
So, without further ado, let’s get to the best Nevada marijuana stocks.
Nevada Marijuana Stocks
Here’s the thing, there’s no real company that dominates the Nevada legal weed business, and most of the bigger-name companies aren’t all that swayed one way or the other by the Nevada buyers. But here’s what is important: goodwill.
Chart courtesy of StockCharts.com
The Nevada marijuana stocks are the ones that are going to benefit from the success of recreational weed Nevada being legalized.
The strong tax sales revenue and the fact that—once more—a state that legalized the drug didn’t collapse in on itself in depravity, will encourage more states to take the plunge and see what they can do regarding state marijuana laws.
In that case, there are a few stocks that have performed well this year and have seen a boost in July, coinciding with the Nevada legal weed move.
First, there’s Aphria Inc (TSE:APH). It’s been very high (it’s almost impossible to write about marijuana without inadvertent puns) since the beginning of the marijuana gold rush, and it is still one of the stronger marijuana stocks out there.
Although it has had its troubles recently (like many other marijuana stocks), it gained about 7.5% over the past five days, and, as always, it seems to be one of the more solid offerings in a marijuana market filled with so many would-be stars.
Another solid play is GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH). While the company does have its hand in recreational marijuana, it’s the biomedical side of things that is the exciting part. While marijuana is going to be a big business—no one denies that—there’s a good chance that many companies won’t be profitable for a long while, as legislation races to catch up to the market and competition is fierce at the start.
As such, having a strong foundational business in medicine is good news for GWPH stock.
Finally, there’s big ol’ Canopy Growth Corp (TSE:WEED). Owner of the best ticker in the pot business, and having a $1.0-billion market cap when it went public, this Canadian giant is looking poised to put vast resources to work and take advantage of loosening marijuana laws. While the company has certainly taken a bit of a beating over recent months, its lower stock price might be a bargain, as the company is likely to stabilize and rebound with the market.