Cannabis stocks are continuing to rise on good news about legalization.
Over the last month, Canopy Growth (NYSE:CGC) is up 239%, Aurora Cannabis (NYSE:ACB) is up 127%, SNDL (NASDAQ:SNDL) is up 81%, Tilray Brands (NASDAQ:TLRY) is up 68%, and Cronos Group (NASDAQ:CRON) is up 42%.
The good news is broadly based. Germany has legalized recreational cannabis. Canada is debating lower taxes on legal cannabis. A Florida court put legalization on the November ballot.
It’s even appearing on the U.S. presidential campaign trail.
Is It 4/20 Yet?
Progress is appearing just before April 20, considered a holiday by pot smokers.
Five years ago, cannabis stocks were on a high after Canada legalized recreational use. It was assumed other states and the U.S. government, would quickly follow.
Progress was slow, however. While big states like California, Illinois, and New York moved toward legalization, demand was taken by illegal growers with lower costs. This makes the move by Canada especially important. Illegal growers still control 40% of the market there.
The 2024 election has created some movement in pot’s direction. The Biden administration wants the Drug Enforcement Administration (DEA) to take marijuana off the “Class One” schedule, where it’s considered more dangerous than fentanyl. Vice President Kamala Harris has been speaking up for marijuana on the campaign trail.
Republicans are pushing back. Virginia Governor Glenn Youngkin vetoed a legalization bill. Florida Governor Ron DeSantis has come out against legalization there.
While legal pot sales are growing, asset write-offs have made profits elusive for the big growers. Tilray lost $1.44 billion in 2023 on sales of $627 million. Canopy Growth lost $3.28 billion on sales of $403 million. Cronos lost $94 million on sales of $117 million.
Cannabis Stocks: What Happens Next?
Investors looking for pot profits might check out some under-the-radar plays identified recently by fellow InvestorPlace contributor Omor Ibne Ehsan. Many are penny stocks found on the OTC market, like Cresco Labs (OTCMKTS:CRLBF).
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
