Colorado’s new law allowing recreational use and sale of marijuana began Jan. 1, and amid the anticipation has come a boom in marijuana stocks.
Medical Marijuana (MJNA) is up 91% in the past five days, and Cannabis Science (CBIS) has more than doubled — a pretty clear sign that marijuana stocks are feeling the love from Colorado’s new law.
“The first-in-the-nation law was greeted with long lines at retailers and a lot of ‘Rocky Mountain High’ jokes. But beyond the buzz, the measure represented the institution of a major new public policy in America — one that opponents fear will turn the state into a dangerous land of debauchery and that backers hope sets a nationwide precedent.
If Colorado is able to successfully legalize marijuana without causing a social backlash, the tourism, tax and other considerations are likely to compel several other states to quickly follow suit.”
Already, Alaska will likely put the issue in front of voters within the year, and supporters say they expect Oregon to see a vote after that. By 2016, advocates hope to see measures on the ballot in Arizona, California, Maine, Massachusetts, Montana and Nevada, according to the Post. After that there are rumblings of similar ballot measures in six other states.
The big winner — states collecting taxes. Colorado is expected to reap some $200 million this year in marijuana taxes, with much of that going to education.
If other states put up similar ballots for voters who hear that Colorado didn’t fall into ruin — and instead making a windfall — the measures may even force a federal review of marijuana laws.
For now, marijuana stocks are hoping to ride the wave of popularity all the way to the bank.
CBIS, for instance, was up more than 40% as of this writing. As HotStocked noted earlier this morning:
“Traded volume exploded and 28 million share changed hands throughout the session which is seven times more than the average for the company. This drastic change in investors sentiment came just days after CBIS dropped to a new 52-week low of just $0.028 per share.”
Of note, MJNA and CBIS are primarily involved on the medical side of marijuana, not recreational; still, traders and investors seem to believe in a larger potential out of what’s happening in Colorado.
