To legalize marijuana for recreational use, Michigan has become the 10th US state. While the legalization for medical use passed in both Utah and Missouri, but voters rejected a similar measure in North Dakota. Both Main Street and Wall Street this year have their eyes on the cannabis stocks.
Constellation Brands, the maker of Corona beer and Svedka vodka, in August announced a $US4 billion investment in Canopy Growth. With market values of the biggest names more than doubling, that led to a green rush into the sector. Canada became the second country to legalize marijuana for recreational use last month, putting a top on shares prices.
A managing partner at the cannabis-focused Altitude Investment Management, Jon Trauben, said ‘to invest in the companies that will form the basis of the legal cannabis industry in the coming years, the legalisation in Canada offers a road map.’
They are starting to make money according to the latest quarterlies, in Australia there are about 30 ASX-listed cannabis stocks which is attracting interest from some of the big North American cannabis players.
AusCann (ASX: AC8) group of Australia and Aphria has 25 percent of Althea Group (ASX: AGH) Canopy Growth owns 11.2 percent. The world’s second biggest pot stock, Aurora, is Cann Group’s (ASX: CAN) biggest shareholder with 23 percent.
To vote to legalize marijuana for recreational purposes, in 2012, Colorado and Washington state became the first states. Although Vermont and DC have continued to bar sales for recreational purposes while allowing marijuana possession and growing, eight more states and Washington, DC, have followed since then.
It has led to a reimagining of US drug policy and how it should change as people seek alternatives to disciplinary criminal justice policies. The states that have legalized marijuana for recreational purposes with the exception of Vermont so far have landed on a commercialization model, where private businesses for-profit, sell the drug.
Some limits including an age requirement how much a person can possess at once and buy, taxes and the packaging of the product however are enforced by state officials. To produce the best public health outcomes and help eliminate the black market, the report particularly favors sales since regulators could directly control prices and who buys pot and a state-run monopoly for marijuana production.
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