Marijuana legalization has been a long time coming, but it is happening slowly and methodically all over the United States. With Colorado, California, Washington and other states solidly on the recreational marijuana bandwagon, the sector is on the cusp of a boom, with growing business, cultivation firms and ancillary support companies popping up all over the place. That means that marijuana stocks should have a great future in 2018.
In the US, companies like AmeriCann are becoming more and more profitable as they develop state of the art cultivation techniques for medical marijuana. But the firm also diversifies is business by offering venture capital to growing marijuana-related businesses, which can future proof its profitability, if the investment is done carefully.
In Canada in particular, the coming national legalization will allow the industry to mature and companies to make expansion plans with capital that they could not have gotten a few years ago. Canopy Growth is getting bigger by acquiring smaller firms, while Aurora Cannabis is building out new facilities. Both of these companies make medical marijuana north of the border.
As traders begin to explore the marijuana sector, is helpful to know what states in America allow marijuana on a medical or recreational basis and which states are still holding out. The entire West Coast and Alaska are pretty much anything goes, with legalized cannabis and growing allowed carte blanche. So that is where you are seeing the most growth of cannabis-related companies. The same with Colorado. Denver is becoming a marijuana venture capital hotbed, with companies and law firms set up to deal with the growing sector.
The American South is lagging far behind, with attitudes still stuck in the mid-20th century as states and local regulator resist the tide of marijuana acceptance. The situation is a little more open in the Northeast, as many states have decriminalized the possession of cannabis and actively encouraged medical marijuana businesses to a degree.
In New York, marijuana was decriminalized all the way back in 1977, when you could have less than 25 grams and only get a $100 fine. But the sale and distribution was still a no-no. The Compassionate Care Act went into effect in 2014, which allowed a few private marijuana businesses to open dispensaries for medical marijuana. That side of the sector is still very tightly controlled in New York, but it stands to reason that the spoils of recreational legalization for tax revenues will convince future politicians to lift most regulations.
It has already happened in Maine and Massachusetts. The weed business will grow faster up in upper New England, allowing for more growth and more capital to flow into the region. That will eventually convince most of the neighboring states that the gravy train is too lucrative to pass up.
That is going to be the epitaph of marijuana prohibition in the United States. Let government see the potential tax revenue of the product and it will find its way to the marketplace.
