- Federal legalization remains elusive
- New York state is a different story
- The Fed will act as soon as possible to open the market
- CURLF- The trend is bullish and analysts love this company
- The need for income is on the rise for weed stocks
Nevada legalized recreational marijuana on January 1, 2017. The aroma of pot is everywhere in Las Vegas these days. While casinos prohibit smoking weed on-site, parking lots and streets outside are often loaded with odors. Nevada is one of the growing numbers of states realizing that legalization is a source of revenue. In addition, making the pot available in regulated dispensaries reduces harmful sales channels.
The growth of the pot trade in the United States has been steady as more states allow recreational and medical consumption. The main obstacle to the spread of the weed trade is federal laws that continue to classify marijuana as a Schedule 1 drug.
The classification creates problems for the pot business as it excludes it from banks and other funding channels. This also makes it a cash business, as credit cards cannot be used for purchases. Many booming cannabis companies celebrated President Biden’s election in late 2020, believing it would pave the way for federal legalization. So far, this has not happened.
One of the leading US marijuana companies is Curaleaf (CURLF). With a market capitalization of over $ 10 billion, the Massachusetts-based company trades in the over-the-counter market. CURLF is pot action on the verge of explosive growth or even a takeover when the US federal government ultimately decides to follow many states.
Federal legalization remains elusive
Democrats have a majority in the House of Representatives and the Senate. Most advocate changes to federal laws that remove jar from its Schedule 1 drug classification. Meanwhile, the main Democrat in the Oval Office isn’t too keen on legalizing marijuana. . President Joe Biden has been an advocate for decriminalization, but legalization is a different story.
A sign that the president is not ready to join many of his fellow Democrats, the Biden administration has asked dozens of White House employees to resign or sanction those who admit to having used marijuana in the past . Representative Earl Blumenauer (D-OR) said: “We still have a very uneven response”To the use of marijuana in the federal government.
The decision to fire and punish staff was particularly hypocritical given Vice President Harris’ admission that she had previously used cannabis. Meanwhile, hopes that political change in Washington would lead to swift legalization have gone up in smoke in recent weeks as President Biden appears to remain a roadblock.
New York State is a Different Story
As the federal government balks on the matter, New York State is poised to become the last jurisdiction to legalize weed for recreational purposes. State lawmakers have reached a deal to expand the state’s existing medical marijuana program and put in place a system for licensing and taxing recreational sales. The bill went through a final vote on March 31.
New York plans to set a 9% tax on cannabis sales, plus an additional 4% tax split between the county and local government. The plan includes an additional tax based on the level of THC, ranging from 0.5 cents per milligram to three cents for edible marijuana.
New York will eliminate penalties for possession of less than three ounces of cannabis. It will erase the records of people who have already been convicted of marijuana-related offenses who would no longer be criminalized. In addition, the state would provide loans, grants and incubation programs to encourage participation in the booming industry by people from minority communities, as well as small farmers, women and disabled veterans.
The Fed will act as soon as possible to open the market
As more states move to decriminalize the pot, this will shift the needle from support in Washington, DC, toward federal legalization. President Biden can only last long if his political party’s support becomes overwhelming. Political reality will prompt the Fed to step in sooner rather than later to open up the market and allow banking and financial channels to support the marijuana trade in the United States.
Meanwhile, support for legalization in Congress is growing. At February 1st, Senators Cory Booker, Ron Widen and Senate Majority Leader Chuck Schumer released a joint statement announcing that the marijuana reform bills will be merged as Congress moves towards federal legalization .
The SAFE Banking Act would eliminate interference in the actions of deposit-taking institutions dealing with state-legalized cannabis businesses, opening up channels for credit card receipts and financing, making marijuana a routine business similar to alcohol and cigarettes. Mexico has just legalized commercial cannabis, putting additional pressure on the US government to act.
CURLF- The trend is bullish and analysts love this company
CURLF is already the world’s leading legal cannabis seller. At around $ 15.14 a share at the end of last week, its market cap was above the $ 10 billion level. On average, over 1.26 million CURLF shares change hands every day.
Source: bar chart
The chart shows that after hitting a low of $ 2.54 per share last March, CURLF shares peaked at $ 18.38 in early February. The stock retreated and was just above the $ 15 level at the end of last week, which many analysts see as a good deal.
Source: bar chart
The chart shows that three Wall Street analysts rate CURLF as a buy or overweight for portfolios.
The need for income is on the rise for weed stocks
US states and the federal government need tax receipts. The American debt is heading towards the $ 30 trillion level. The infrastructure reconstruction package of more than $ 2 trillion would make it possible to cross this milestone.
The need for income only increases the chances of federal legalization of marijuana. The pot is a growing business. When Washington, DC finally acts, we could see explosive growth and a massive rally of leading American companies. CURLF is already the world leader in legal pot. We could see the market cap explode to several multiples of the current level of $ 10 billion over the next few months and years.
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CURLF shares were trading at $ 15.50 a share on Monday morning, up $ 0.36 (+ 2.37%). Year-to-date, the CURLF has gained 29.47%, compared to 8.40% for the benchmark S&P 500 over the same period.
About the Author: Andrew Hecht
Andy has spent nearly 35 years on Wall Street and is a sought-after commodities and futures trader, expert and options analyst. In addition to working with StockNews, he is a leading author on Seeking Alpha. Learn more about Andy’s background, as well as links to his most recent articles. Following…