Two weeks ago, we wrote about Germany legalizing Cannabis usage and implications, in a late but (maybe) expected turn of events, the US is also set to pass a bill to legalize Marijuana at the federal level in turn giving states more power to make their own laws on regulation and usage alongside reducing high taxes/red tape barriers for producers, currently recreational usage is permitted in twenty-four states
Election cycle
One of the Democrats' main promises in the 2020 election was softer laws around marijuana. Despite lax laws in different states, it is only now in 2024 (another election year) where this promise is being actualized at the federal level. On the other side of the fence, it's not entirely clear what the Republican stance is on the issue. Trump, during his term in office, did pardon some marijuana dealers, yet also described usage of the drug as damaging at rallies.
Markets
Legalization is very attractive for investors primarily due to the cheap production costs and this week saw some fairly decent rallies , Marijuana is fairly easy to grow but specialist cannabis companies with the ability to mass produce are poised perfectly to take full advantage of Cannabis consumers, most of which are concentrated in the US. A great deal of the more prominent companies are Canadian (legalization -2018), however the industry as a whole faces oversaturation due to low start-up costs.
This event was certainly a catalyst for Cannabis-related equities but sustained growth in the industry as a whole seems somewhat sluggish. (Look at Cannabis Benchmark indexes)
Canopy Growth Corporation (+12.51% - 5d)
Tilray (+16.67% - 5d)
Curaleaf Holding (+12.57 - 5d)