Election day is behind us and a lot remains uncertain—except for one thing: marijuana stocks have won big.
Federal U.S. marijuana legalization has long been a forgone conclusion, but with five more states legalizing pot in some form, we can expect to see one of the biggest surges in marijuana stock values yet. The big news is that four of those five states voted to legalize recreational pot (instead of just medical marijuana).
That leaves us with 15 states where marijuana is legal for recreational use. That means more than 100 million Americans can now partake in recreational cannabis consumption without fear of legal repercussions.
Mississippi voted to permit medical marijuana alone, while South Dakota voted to permit both medical and recreational marijuana in one go. That represents a first in the nation, and a possible road map for other states to follow. (Source: “Cannabis Legalization Measures Set to Pass in 5 States,” TechCrunch, November 4, 2020.)
- Mississippi voted to legalize medical marijuana, and the government has until July 21, 2021 to put rules and regulations in place
- Montana will legalize marijuana for adults 21 years and older, effective January 1, 2021, with recreational pot sales set to start in 2022
- New Jersey will permit recreational marijuana come January 1, 2021, with the legislature tasked with setting up rules and regulations for the marketplace
- Arizona will allow retail marijuana sales to start April 5, 2021 (or possibly earlier), though it’s unclear when it will become legal to possess pot in the state
- South Dakota will permit possession and consumption of pot, as well as growing up to three plants, starting on July 1, 2021
This is a momentous occasion for marijuana stocks, it goes without saying.
But that’s not all there is to celebrate. Oregon, which had already legalized marijuana, went a step further and voted to decriminalize all drugs.
Ballot Measure 110, also known as the Drug Decriminalization and Addiction Treatment Initiative, is a huge step toward dismantling the War on Drugs, which has not only plagued marijuana investors, but has wrought devastation across the U.S. for decades. (Source: “Oregon’s Decriminalization Vote Might Be Biggest Step Yet to Ending War on Drugs,” The Intercept, November 4, 2020.)
In fact, for pot stocks, this may be an even bigger win than the legalization of marijuana.
That’s because federal U.S. pot legalization, while a certainty at this point, is still several years off. While the election results remain undetermined as of this writing, one thing that’s certain is that, whoever wins the presidency, neither Donald Trump nor Joe Biden has any interest in comprehensive U.S. marijuana legalization.
Biden’s own vice-presidential candidate, Kamala Harris, initially included U.S. pot legalization in her platform before abandoning it when she joined the Biden ticket.
Trump, meanwhile, toyed around with the idea of being pot-friendly early in his presidency, but that ended up being a non-factor on the U.S. marijuana industry.
The one silver lining, however, was that virtually every other Democratic Party presidential hopeful had included some manner of marijuana law reform in their platform, with most supporting outright legalization.
What that showed was that political will is now, finally, aligning with the popular will in favor of marijuana legalization. Remember that, for years now, the majority of Americans have supported pot legalization.
Politicians aren’t always the most forward-thinking, of course, often lagging behind popular opinion.
The Oregon drug decriminalization vote takes the debate to a whole new level. By essentially moving the goalposts of opposition to the War on Drugs that much further, marijuana legalization seems downright tame by comparison.
Don’t get me wrong, I believe that decriminalization of all drugs is the most humane thing to do, but for many, the idea of heroin and cocaine being decriminalized leaves a sour taste in their mouths.
The issue could be employed as a bargaining chip in future marijuana debates, with anti-drug crusaders possibly willing to accept marijuana legalization as a compromise, if only to delay the decriminalization of other drugs.
It will absolutely shift the debate in the U.S., with U.S. marijuana legalization advocates being the real winners.
And, of course, U.S. marijuana stocks are likely to see huge gains in the near future.
Innovative Industrial Properties & Curaleaf
Innovative Industrial Properties Inc (NYSE:IIPR) stock gained nearly 10% the day after the U.S. election. A marijuana real estate investment trust (REIT), Innovative Industrial Properties deals in real estate for marijuana producers.
IIPR stock is one of the most effective pot stocks on the market, providing a healthy dividend to investors (REITs are mandated to distribute 90% of profits as dividends to shareholders).
Curaleaf Holdings Inc (CNSX:CURA, OTCMKTS:CURLF), meanwhile, was already on a surge before the election. I only anticipate further gains for the No. 1 pure-play U.S. marijuana stock.
Curaleaf had promised to become, in 2020, the first marijuana company to reach $1.0 billion in revenue. That milestone may be delayed due to COVID-19, but the company is among the highest moneymaking pot companies on Earth. It’s worthy of your attention.
Chart courtesy of StockCharts.com
Both CURLF stock and IIPR stock are poised for huge gains as the U.S. marijuana market continues to expand.
U.S. marijuana legalization has, rightfully so, taken a back seat to the COVID-19 pandemic and recession, at least on the political front. Few politicians are arguing for legalizing pot when millions of Americans can’t afford to feed their families.
Yet, even with all the cards stacked against it this year, marijuana legalization still managed to score a victory, with five additional states voting in favor of it.
Pot stocks, meanwhile, are set to see huge gains in the near future on the back of these political victories. What’s more, their gains are just getting started as federal U.S. marijuana legalization becomes harder and harder to deny.
Remember that more than 100 million Americans can now enjoy pot legally at the state level. It’s looking silly at this point that the federal government remains a stubborn holdout.
With the popular support and the dissonance that grows more evident with each passing legislative win, I anticipate that we’ll eventually see a sitting president support U.S. marijuana legalization—and I expect we’ll see that sooner rather than later.