After Biden announced a pre-midterm pardon for 6,500 Americans convicted of federal charges for marijuana possession, Texas Governor Greg Abbott stated that the pardons would not be granted at the state level in Texas.
Regardless of whether states mimic the president’s pardons, cannabis stock in the United States has seen a record-high surge since Biden’s initial announcement.
Share prices for marijuana growers’ stocks in the United States saw a surge on Thursday after presidential action to alter the United States’ executive policy on marijuana possession.
Two top marijuana companies in the United States, Tilray Brands (TLRY.O) and Canopy Growth Corp (WEED.TO), saw shares jump 22% and 31%, respectively, at the end of last week.
Another popular U.S.-based cannabis company that comprises collective shares of multiple cannabis companies, ETFMG Alternative Harvest ETF (MJ.P), saw shares increase by 20%.
In addition to pardoning simple marijuana possession charges, Biden is working closely with federal officials to change the judicial classification of marijuana. If and when that happens, stocks may continue to surge for stateside marijuana companies the way they have in Canada, where the drug was legalized in 2018.
The more states make cannabis legal throughout the U.S., the better the market will be for the associated product makers.
Legal “U.S. cannabis sales — medicinal and recreational — increased 35% in 2021, to a total of $24.6 billion.” At present, the largest marijuana markets and stocks are coming out of states with the most legalization, such as California and Colorado.
One consideration to keep in mind with marijuana stocks is that they trade in what is known as over-the-counter (OTC) markets. This means they are “not required to file regular financial statements.”
They are also not required to maintain a certain market capitalization level. This translates to low liquidity and greater difficulty when it comes to trading.
Marijuana supply is also known to be irregular when it comes to meeting demand, which further impacts share prices. The business will continue to fluctuate with legalization and regulation levels.
