2018 was filled with positive cannabis industry news.
From the soaring stock prices of companies like Tilray to the sensational blunt-smoking antics of Elon Musk, last year saw its fair share of pot publicity. And although stock prices have since corrected, cannabis companies are still poised to do well.
What cannabis industry news will 2019 bring? In a pinch,
- Cannabis reform on the national level is set to move forward.
- A handful of states could legalize cannabis this year.
- The recent dip in the overall stock market provides a buying opportunity for select cannabis stocks.
Let’s begin with the promising landscape of reform on the
national level.
The Potential for Cannabis Reform in 2019
Cannabis companies have to conduct all business in cash.
Because marijuana is still considered an illegal Schedule I controlled
substance on the federal level, banks can’t engage in financial transactions
that involve THC-containing products.
For years, companies in the cannabis industry have been waiting on Congress to pass legislation to change this. There is some reason to be optimistic that 2019 could be the year for such action.
This year, a bill known as the States Act could make its way
to the President’s desk. The States Act would put the issue of marijuana
regulation into the hands of the states and leave the federal
government out of things.
There’s no denying that the current congressional makeup is far more favorable for the prospects of cannabis-related reform. The House of Representatives is now under Democratic control and anti-cannabis fanatic Jeff Sessions is no longer Attorney General.
It’s still uncertain how current AG nominee William Barr will act toward marijuana reform. But it’s a good bet that he will be more moderate than Sessions.
Additional States Considering Legalization of Cannabis
In addition to the States Act, several states seem poised to take the plunge into cannabis legalization. So even if the States Act goes up in smoke, the trend toward legalization won’t be slowing down anytime soon.
New Jersey & New York
Both states have governors that are pro-cannabis. New York Governer Andrew Cuomo went so far as to create a task force dedicated to drafting cannabis legislation in 2018.
Meanwhile, New Jersey Governor Phil Murphy has been advocating recreational legalization of marijuana since he first took office in early 2018.
Over 60% of voters in both states say they support the complete legalization of cannabis.
Connecticut
Connecticut could well become the next American state to legalize cannabis. Governor-elect Ned Lamont has said on the record that the legalization of recreational marijuana is high on his list of priorities as governor.
The majority of Connecticut voters support legalization.
Rhode Island
Being the smallest state in the nation wedged between Massachusetts and Connecticut, both of which are pro-pot, Rhode Island legislators can’t help but feel the buzz.
Peer pressure to legalize has never been greater. Although both the state’s governor and attorney general have made statements indicating legalization is inevitable, they have also expressed doubt as to whether or not 2019 will be the year it happens.
There are other states pushing forward with cannabis
legalization as well, but these are some of the most likely states to make
serious cannabis industry news in 2019.
Cannabis Industry Investment Opportunities
How do investors capitalize on the growing trend of
legalization?
There are a number of marijuana stocks and ETFs that are excellent long-term bets. And many of these stocks have seen significant corrections in recent months, creating a potential buying opportunity.
However, it should be noted that some parts of this market are still overvalued by some metrics. Canopy, for example, has a larger market cap than the entire Canadian cannabis market is projected to be in 2025. But that doesn’t mean all cannabis stocks are schwag.
Let’s take a quick look at some stocks that have seen large
capital inflows as of late.
Top Shelf Cannabis Stocks
We’re no fan of the big banks here at GSB. But they have kilos worth of capital to throw around, and if one of them makes moves into a particular stock or asset, there’s a good chance it will fly higher.
Barron’s reported in December of 2018 that Barclays, one of the biggest banks in the world, made massive moves into several cannabis stocks.
Tilray
Barclays has gone long on Canadian cannabis company Tilray
(TLRY). The bank owned over 26,000 shares of TLRY as of September 2018.
Cronos
Barclays also accumulated over 124,000 shares of Cronos
Group (CRON) throughout the course of 2018. And that’s nothing compared to the
investment that Altria Group has made.
In December, Altria Group (MO) purchased 45% of CRON for
$1.8 billion.
Canopy
Alcoholic beverage firm Constellation Brands (STZ) owns more than a third of Canopy Growth (CGC). Barclays has exposure to CGC through a large stake in STZ to the tune of over 288,000 shares.
These aren’t the only cannabis
stocks to buy in 2019, but they are a good place to start.
Cannabis Industry News
Overall, cannabis enthusiasts should be high on life right
now. Cannabis industry news in 2019 can’t be smoked, but if it could, it would
be top shelf stuff.
National reform of cannabis laws are finally a real possibility. A group of states are set to legalize it regardless of national legislation. And several cannabis stocks can be a good starting place for investors seeking exposure to the industry.
For more in-depth analysis of the cannabis markets, along with the best opportunities in cryptocurrencies and gold mining stocks, subscribe to the GSB newsletter.
