Why Tilray, Aphria, and Aurora Cannabis Stocks Are Lighting Up Today

Good news for cannabis investors: Sometime within the next couple of years, marijuana is going to be legal across all of America — or so says the CEO of Tilray (NASDAQ:TLRY)

As CNBC reported yesterday after close of trading, with marijuana already legal in Canada, and moving toward legality in Mexico, “pressure from the North and the South will ultimately lead the U.S. to implement a federal program here at some point in the next 18 to 24 months,” Tilray CEO Brendan Kennedy said.

Marijuana stocks are lighting up on the news, with shares of Tilray up 6.3% as of 11:15 a.m. EST, its soon-to-be-merger partner Aphria (NASDAQ:APHA) rising 2.5%, and rival Aurora Cannabis (NYSE:ACB) gaining 3.9%, and I think that makes a lot of sense.

So what

As I pointed out last month, the legalization of marijuana at just the state level in New Jersey prompted neighboring New York Gov. Andrew Cuomo to muse that the time might be “ripe” for him to legalize marijuana as well — lest New York begin to lose tax revenue to its neighbor. A similar argument applies to the U.S. as a whole, which will soon be bracketed by two neighbors, both with very long and easily crossed borders, where marijuana can be purchased and consumed legally.

Now what

It just doesn’t seem likely that the U.S. would want to be the odd taxman out in that situation, allowing lucrative cannabis tax revenue to leach through its borders to its neighbors.

And this argument only gets stronger in the context of…

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