U.S. House Legalizes Cannabis – Senate Next?

Cannabis stocks jumped higher again this week after the global cannabis industry recorded two ground breaking legal victories.

#1 The United Nations (UN) re classified cannabis into a less dangerous category. Here are some more details from marijuanabusinessdaily.com.

“The United Nations Commission on Narcotic Drugs (CND) on Wednesday accepted a World Health Organization (WHO) recommendation to remove cannabis and cannabis resin from Schedule IV of the 1961 Single Convention on Narcotic Drugs.

The historic vote in Vienna could have far-reaching implications for the global medical cannabis industry, ranging from regulatory oversight to scientific research into the plant and its use as a medicine.”

#2 In addition to the big news from the U.N, the U.S. House of Representatives passed the MORE ACT, a sweeping cannabis bill that would have profound benefits for the U.S. cannabis industry.

A lot of people are calling this ‘federal legalization.’ Here are some more details from marijuanamoment.com.

The U.S. House of Representatives approved a bill to federally legalize marijuana in a historic vote on Friday. It’s the day that cannabis reform advocates have been building toward for years—a full floor vote to end prohibition in a chamber of Congress.

Despite the unprecedented House victory for reformers, few believe the legislation stands a chance in the Republican-controlled Senate, at least before the end of the current Congress early next month. Vice President-elect Kamala Harris (D-CA) is the lead sponsor of the Senate companion version of the bill.

The legal breakthroughs come on the heels of a string of great news for the U.S. cannabis industry. That includes:

  • 5 more U.S. states just voted to legal medical or recreational cannabis.
  • Mexico is on the cusp of full federal legalization.
  • New York state is looking to go legal in the next few months.
  • Pennsylvania, Virginia, Connecticut all looking to go legal ASAP.

The string of good news has given cannabis stocks a huge boost. Our favorite cannabis stock are up big this year.

Curaleaf Holdings (CURLF) +127%
Green Thumb Industries (GTBIF) +98%
Canopy Growth Corp (CGC) +42%
Innovative Industrial Properties (IIPR) +108%
Cresco Labs (CRLBF) +64%

What Should We Expect Moving Forward?

The lame duck U.S. Senate is expected to vote on the MORE ACT in early January. Analysts see a low probability the republican controlled chamber will pass the bill. Senate leader Mitch McConnel is well known anti cannabis. Having said that – it’s 2020 and we have seen way crazier things – I’m keeping my fingers crossed that the republicans will pass the MORE ACT. If that happens – get your space suit out – weed stocks would go vertical.

Even if the MORE ACT doesn’t pass I am expecting cannabis stocks to continue rallying into the end of the year. The sector has amazing momentum and enthusiasm right now and December is historically an excellent month for stocks.

The Big Picture

Cannabis stocks had a terrible year in 2019 and early 2020. However, the tide has shifted. Cannabis sales have exploded higher this year and investors are enthusiastically pouring back into the sector. This looks like the beginning of another multi-year trend higher.

My plan is to stay aggressive. Continue to hold current shares and look to buy more on dips.

Disclaimer: This report is for entertainment purposes only. Every investor should consult with an investment advisor before making investment decisions. The Vodicka Group, Inc. is not a broker/dealer. We do not receive compensation for mentioning stocks. At various times, the clients, publishers and employees of Vodicka Group, Inc., may buy or sell the securities discussed for purposes of investment or trading. Author Michael Vodicka owns shares of Cresco Labs (CRLBF), Canopy Growth Corp (CGC), Green Thumb Industries (GTBIF), Curaleaf Holdings (CURLF).

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