While politicians continue to dither in Washington, D.C. on cannabis legalization, consumers are voting with their wallets, and they are sending a clear message with cannabis spending.
Record sales confirm polls that consistently show voters favor legalization of medical and recreational use – on both sides of the aisle.
This suggests Congress and the administration may well act on financial sector reform that allows banks to serve cannabis companies, and rescheduling under the Controlled Substances Act. Both would be big catalysts for cannabis stocks.
Senate Majority Leader Chuck Schumer (D-NY) on July 28 said lawmakers are “making good progress” in bipartisan negotiations on a banking reform that would favor the cannabis sector. He says advancing the bill will be a priority for a “very, very productive fall in the Senate.” The Secure and Fair Enforcement (SAFE) Banking Act would help the sector by allowing banks to serve cannabis companies, meaning dispensaries would no longer have to operate in cash only. “We’re making good progress on SAFE Banking, which, as you know, has always been a priority for me,” he said. “So, there’s a lot to do when we get back.” Progress on this bill in the autumn would be a significant catalyst for cannabis stocks.
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Meanwhile, though, robust sales growth helps keep the more financially sound cannabis companies afloat, as the industry struggles with challenges like price compression and weak enforcement against illicit sales.
* Illinois’ July marijuana sales broke 2023 records, topping $140 million. That was the highest monthly amount for the year, and the second-highest monthly total since marijuana became legal for recreational use back in 2020. The figure does not include medical cannabis sales, reported separately by a different agency.
* Maryland booked $87 million in cannabis sales in the first month of legal recreational use sales in July. That includes both medical and recreational sales. June sales, for medical use only, were $42.7 million. Trulieve (TCNNF) said Maryland dispensary traffic increased 200% in July.
* Massachusetts sales hit $152 million in June, a monthly record since the state legalized recreational use in 2018.
* Missouri posted a record $121.2 million in cannabis sales in June.
These sales trends are one reason why global, legal-market cannabis sales will hit $104 billion a year by 2030, says a recent report from Vantage Market Research. That would represent an annual growth of 26% a year from 2023 to 2030. Global, legal sales were $16.1 billion in 2022. Besides ongoing legalization, the research group cites changing attitudes towards cannabis, medical benefits, and growth in tax revenue and sector jobs, as factors driving sales growth.
In the U.S., large states like Florida, Pennsylvania and Ohio may legalize recreational use in the next two years. The Pew Research Center says 91% of adults in the U.S. support the legalization of marijuana for medical or recreational use.
In Europe, Germany will de-schedule cannabis at the end of the year, by taking it off the list of illegal narcotics. The change could start a legalization wave in Europe, say cannabis sector analysts.
To find out which cannabis companies offer the best exposure to legalization trends in the U.S. and Europe, consider subscribing to Cabot Cannabis Investor today.
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