Marijuana referendum opposition concedes defeat, Proposal 1 Passes
- Author: Anthony Vega Nov 08, 2018,
Nov 08, 2018, 0:16
Cannabis stocks reached new highs in pre-market trading Wednesday morning after voters in MI legalized the recreational use of marijuana.
Shares of cannabis stocks pared earlier gains after surging in early trading Wednesday, as three US states voted to loosen the use of recreational and medicinal marijuana amid growing optimism the country will soon pass measures to federally legalize pot.
Proposal 1 allows adults aged 21 and older to possess up to 2.5 ounces of marijuana.
Michigan's vote Tuesday to become the 10th USA state where the recreational use of cannabis is legal is adding more momentum to a trend that some investors now say is inevitable: that marijuana will become legal nationwide within the next 5 years.
Utah's governor said he would call lawmakers into a special session after the midterm election to pass the deal into law, even if Tuesday's initiative failed.
The potential growth of the cannabis industry in the U.S.is evident in the work histories of new hires by Canadian cannabis companies that have their sights set on expansion, said David King, a senior portfolio manager at Columbia Threadneedle Investments who has invested in convertible bonds issued by Canopy Growth Corp.
Cannabis stocks gained Wednesday, led by Tilray and Cronos Group Inc. The United States Marijuana Index has gained 72.27% over the past year, compared to the 7.08% gain seen by the S&P 500 over the same period.
Missouri voters approved one of the medical cannabis measures on the ballot.
Recreational marijuana is now legal in some form in Alaska, California, Colorado, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, Washington, and Washington, D.C. Additionally, 30 states offer some form of medical cannabis. Some in the industry see federal legalization of medical marijuana as the best path to ending prohibition in the USA, which has held big banks and institutional investors on the sidelines. The latest figure marks the third consecutive year that support on the measure has increased and the highest approval rating to date.
The expansion of legal marijuana continued apace in Tuesday's elections, with medical marijuana initiatives winning in Missouri and Utah and recreational marijuana winning in MI.
MI becomes the 10th state to legalize marijuana and the first one in the Midwest.
Both Missouri and Utah were won handily by President Donald Trump in the 2016 general election, but Cowen analyst Vivien Azer says that support for marijuana is becoming more bipartisan.
Proposition No. 2 in Utah passed with about 53 percent of voters for the measure and about 47 percent against it.
MI has become the first state in the Midwest to approve recreational use of marijuana.
The chances that such a bill will get through the House have improved since yesterday.