Although it is still unknown whose version of the tax bill will win, marijuana stocks stand to benefit regardless. The reasoning has little to with the proposed corporate tax cut but rather something on a much larger scale.

Both versions of the Senate and House tax bills remove federal deductions for state and local taxes, which includes all income and sales taxes. Similarly, both bills would sustain a deduction for up to $10,000 in property taxes. The effects will hit home harder for states with high-tax, such as New York and New Jersey where their federal taxes may increase as much as 8%.

The officials in states with high tax rates have concerns that residents impacted most by the changes would move to another state that has lower taxes. These high-tax states may try to avert raising taxes or even try and reduce them to keep their taxpayers from fleeing. But, to be able to avoid raising or even reducing taxes a new resource of revenue must be found to compensate. Two words, marijuana legalization.

Apparently, all the cool kids are doing it. But, seriously California and Oregon are the two states with the highest income taxes and both have legalized marijuana as well as the District of Columbia, who comes in at seventh in terms of highest taxes. The remaining top ten high-tax states, include Minnesota, Iowa, New Jersey, Vermont, New York, Hawaii, and Wisconsin. Several of these states are already working towards recreational legalization, with New Jersey being first and foremost.

Governor-elect Phil Murphy has sworn to legalize recreational marijuana during his term. If all goes as planned, New Jersey takes the title of the nation’s second-largest marijuana market following California. When New Jersey legalizes marijuana, New York would not be far behind. The more states that legalize, the more marijuana sales, which leaves marijuana stocks plenty of room to grow.

Scotts Miracle-Gro (SMG) is a good for investors that don’t want to take on the full risk of marijuana stocks (although ALL stocks have risks) as the company further benefit from legalization. Scotts is where marijuana producers shop for supplies such as fertilizer, hydroponic products, and lighting systems. Although Scotts has planted profits due to its expansion into the marijuana market, the company still generates over four-fifths of its revenue from its consumer lawn and garden business.

Another marijuana stock that stands to benefit is Aphria (APHQF). Unlike most of the Canadian medical marijuana producers, Aphria has planted its operations into the United States market as well. With a base in Florida, the company intends to expand into states that have legalized marijuana. This puts the company in a great position to benefit as more and more states change their marijuana laws.

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