The beginning of 2021 was off to a good start with cannabis stocks. A new president of the United States made a commitment to decriminalizing marijuana use. This seemed to set the stage for…
eventual legalization. And that hasn’t changed. Shares of cannabis stocks bolted upwards, only to experience a pullback similar to other industries.
And that’s where we remain today. Marijuana-focused exchange-traded funds (ETFs) went from February highs to drop by 40% to today’s numbers. And even with more and more states legalizing marijuana for medical use, now in 37 states, and recreational use in 18 stages, it remains federally illegal.
Motley Fool investors might be saying to themselves, “Why do I care about American legalization? I live in Canada!” But without access to American legalization, Canadian producers stand little chance of reaching peak production. The marijuana industry could be enormous, but United States legalization is the key for cannabis stocks.
Canadian cannabis stocks stand the chance in the meantime to set up shop in the United States and play a waiting game. U.S. cannabis producers are trying the same, but are restricted to growing what’s legal in their states. Banks often don’t want to deal with these companies given the legal ramifications. And U.S. cannabis companies largely still cannot be listed on the larger U.S. stock exchanges.
So, while Canadian cannabis stocks wait around, they’re spending like mad. This includes major Canadian cannabis producers Canopy Growth (TSX:WEED)(NYSE:CGC) and Tilray (TSX:TLRY)(NASDAQ:TLRY). Canopy Growth stock has been buying up United States producers in an acquisition frenzy for years. Tilray stock, meanwhile, made the major move to…
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