Last year was a historic one for marijuana legalization, and a boffo year for marijuana stocks. Most marijuana investors enjoyed massive gains in 2016. A number of smaller, over-the-counter marijuana companies even registered gains of more than 100% on the year.
Unfortunately, what was a landmark election for marijuana in November could end up being a bittersweet victory.
For one, medical and/or recreational marijuana won legalization votes in eight out of the nine states it was on the ballot in November. The most noteworthy accomplishment for marijuana stocks on Election Day was California’s vote to legalize recreational marijuana use. While that would seem like a boon for marijuana investors, legalized marijuana is actually a headwind for a number of related companies because easier personal access to cannabis hurts their causes.
Of course, the flip side is that Donald Trump’s surprising victory in the election may have derailed the marijuana movement. Trump quickly appointed Alabama senator Jeff Sessions as attorney general — a move that probably squashes any hope of federal marijuana legalization in the near future.
The future is less certain than it seemed. For those and other reasons, investors should dump or avoid these three big-name marijuana stocks. At least for the time being.