The legal marijuana market in the United States is currently in an interesting state, and this is undoubtedly impacting how people view marijuana stocks. Currently, the United States is being run by an administration that is anti-marijuana, has a record number of citizens who approve of the legalization of marijuana, and a stock market that is open to a company that exclusively works with a substance that is federally outlawed. This all makes for an interesting situation for companies that want to see legal cannabis products.
Although the marijuana stock market is volatile, marijuana stocks in 2018 are promising to have an interesting year.
Earlier this year, huge losses were reported across the board. Nevertheless, there have been promising glimmers for the future of weed stocks in the USA. For people interested in finding good marijuana stocks to invest in, 2018 might be the year that marijuana stocks became a very smart investment choice for individuals trading on the Nasdaq.
Cronos made history recently, becoming the first marijuana product producer and seller to trade on Wall Street.
Marijuana stocks have already had a historic year, and 2018 is not even a quarter finished. Other companies with indirect relations to cannabis are trading on Wall Street, but Cronos is the first company on the U.S. exchange that outright produces pot products. As Cronos CEO Mike Gorenstein told CNN, “We’re the only pure play marijuana company” to be traded on Wall Street.
This is a huge leap for weed stocks in the USA, and for marijuana stocks on the Nasdaq.
Cronos, already trading on the TSX Venture Exchange, is only involved with countries that do not have a federal ban on marijuana, including Israel, Australia, Germany, and Canada. This likely helped the company get approved for the Nasdaq. Interestingly, this means that the Nasdaq-traded company has products that cannot be consumed in the United States, even if the marijuana stock is on the U.S. exchange.
Some are speculating that Stayner, an Ontario-based company could spark American investors’ interest in marijuana stocks.
Which would inspire movers of institutional capital in the United States to take marijuana stocks seriously, and (potentially) grow those stocks into a significant force in the American economy. Vahan Ajamian, a Toronto-based analyst with Beacon Securities, said, “It could help to have a U.S.-dollar ticker on an exchange that (American inventors) are comfortable with.” Ajamian went on, “It could loosen some pockets of U.S. institutional money.”
Cronos’ Nasdaq listing also has other benefits.
For one, it gives American investors easier access to international medical cannabis opportunities through Cronos’ operations in key burgeoning markets in Europe. This kind of business potential helps investors understand that supporters of marijuana stocks are not just blowing smoke.
Cronos’ debut on the Nasdaq comes at an interesting political and economic time in America.
America’s current Attorney General Jeff Sessions, all but officially declared war on the cannabis industry earlier in 2018, when he rescinded the Cole memo. This memo, a set of rules that states with legalized marijuana must abide by in order to appease the federal government, kept the federal government from becoming too involved with the legal marijuana industry operating in various states.
By removing this memo, which Sessions believed overstepped its bounds, state-level prosecutors are granted the discretion to bring cannabis charges against people or businesses–even in states in which pot is legal. Thus, the outlook for marijuana stocks in the USA became even more complicated and unclear.
Despite Attorney General Jeff Session’s inflammatory, and unfounded, declarations regarding the safety of marijuana, we think that investors should still consider marijuana stocks.
Cronos’ presence on the Nasdaq further supports this. In fact, according to the Washington Post, Session’s comments might make legalization in the United States more likely.
Although marijuana use is illegal at the federal level, this might change in coming years, as demonstrated by the state-level push toward legalization. Legal sales’ growth figures, as well as a growing favorability toward marijuana have played a significant role in destigmatizing this industry.
An October 2017 Gallup survey showed that 64% of Americans support the legalization of marijuana.
For individuals looking for marijuana stocks to invest in, the cannabis research firm ArcView has even better news. ArcView estimates that North American legal sales growth should average 26% through 2021. This makes marijuana stocks a great investment idea.
The combination of the American public’s record-high support of marijuana legalization and Cronos’ historic Nasdaq debut shows the direction weed stocks are headed.
Investors who are unafraid of the potential volatility of the marijuana stock market, have great investment options. After all, the stock market–regardless of what stocks in which one chooses to invest–will always be volatile. Cronos might be a sign of the future of marijuana stocks in the USA, and the future certainly looks bright. We eagerly await to see which other cannabis companies join Cronos on the Nasdaq.