Weed Stocks on Fire in 2021 – Canopy up 64%

Weed stocks are off to a blazing start to 2021. Many of our favorite cannabis stocks are up big in the first five weeks of the year.

  • Canopy Growth Corp (CGC) +63%
  • Cresco Labs (CRLBF) +40%
  • Curaleaf Holdings (CURLF) +27%
  • Green Thumb Industries (GTBIF) +34%

3 Powerful Forces Driving the Big Rally

I see three powerful catalysts that have been driving this big rally.

  • 5 more states voted to legalize cannabis during the November presidential elections.
  • Democrats wining the president and both chambers of congress in November.
  • Industry sales are booming.
  • Mergers are heating up with Jazz Pharma (JAZZ) recently buying GW Pharma (GWPH) at a 50% premium.

Looking forward, I am expecting more gain this quarter and this year. The cannabis sector has a string of powerful catalysts on the horizon.

#1 – The Democrats recently signaled that legalizing cannabis will be a top priority in 2021.

Here are some more details from Marijuana Moment.

Three leading champions of marijuana reform in Congress said on Monday that the issue will be prioritized in the new Democratic Senate this year and that they plan to release draft legislation in the coming weeks to begin a conversation about what the federal policy change will look like.

Senate Majority Leader Chuck Schumer (D-NY), Senate Finance Committee Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) said in a joint statement that ending cannabis prohibition “is necessary to right the wrongs of this failed war and end decades of harm inflicted on communities of color across the country,” but that alone “is not enough.”
#2 – Seven More U.S. States Could Be Going Legal in 2021

It looks like up to seven more U.S. states could be legalizing in 2021. That includes high-population states such as New York and Pennsylvania. This is another big catalyst for U.S. cannabis sales and that should be good for weed stocks.

#3 – Buyout Activity Heating Up

Buyouts are heating up in the cannabis sector. In the last four weeks we have seen two huge deal – Tilray (TLRY) buying Aphria (APHA) to create one of the largest cannabis companies in the world and Jazz Pharma buying GW. This is an important signal that buyout activity is heating up in the cannabis sector and when this happens the company being bought jumps higher and the broader cannabis sector usually follows suit.

The Big Picture on Weed Stocks in 2021

Weed stocks are off to a blazing start to 2021. Looking forward I am expecting more gains because of three powerful catalysts – including  the democrats announcing that legalization is a key goal for 2021, more U.S. states looking to legalize and a potential flurry of buyouts.

Here is the plan to trade and invest in weed stocks.

In the short run weed stocks are looking a little over bought after this big run higher. For the time being I am looking to be patient. Beyond any potential short-term weakness the outlook is strong and I am looking to buy on any weakness or dips in the market.

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