New year, same stocks. Marijuana stocks. This year was a great year for the marijuana industry and it’s leaving investors excited to see what 2018 has in store. There are two major catalysts in North America that are likely to affect marijuana stocks this upcoming year.
The most significant catalyst is Canada’s plan to legalize recreational marijuana this upcoming summer. If everything goes as planned, Canada will become the second country in the world, behind Uruguay, to let their people recreationally light up. Over the last few months, the probability of legalization has increased, as with investors interest in Canadian marijuana stocks.
Canadian officials are making progress with new marijuana laws and have tackled a large obstacle by announcing that it had tax deal in place with the provinces. The two-year agreement gives seventy-five of tax revenue generated from marijuana sales to provinces and twenty-five to the federal government. This combined with a tax rate that is lower than alcohol gives legal marijuana a strong chance to drive customers away from the black market.
The next catalyst investors should keep an eye out for is U.S. Attorney General Jeff Sessions’ enduring war with the marijuana industry. Sessions has went as far as saying “good people don’t smoke marijuana” and has stated that use medical marijuana is not an appropriate solution opioid crisis, then what is?
Sessions has requested the abolishment of the Rohrabacher-Farr Amendment, which prevents Sessions as well as the Department of Justice (DOJ) from using federal funds for the prosecution marijuana companies that operate in states where it is legal. For three years now, the DOJ has been banned from prosecuting medical marijuana businesses.
But this September, the House Rules Committee impeded a vote to include the Rohrabacher-Blumenauer Amendment in the House’s federal budget proposal. If this amendment was discontinued in any future budget proposals, Sessions would have permission to use his legal authority and federal dollars to prosecute any medical marijuana company of his choosing, which would be every last one. Investors should keep an eye out for future federal budget proposals, as the Rohrabacher-Blumenauer Amendment is key to protect the budding industry.
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