This is Why Cannabis Stocks Could See Higher Highs

Oct 26, 2022

Cannabis stocks are all seeing higher highs.

  •  Curaleaf Holdings (CURLF) is up 5.2% on the day.
  • Tilray (TLRY) is up about 16%.
  • Aurora Cannabis (ACB) is up 19%.
  • Green Thumb Industries (GTBIF) is up 5%.
  • Innovative Industrial Properties (IIPR) is up 6.8% to $101.95.

All after Canopy Growth (CGC) – up 30% on a volume spike to 32.3 million shares – entered into a new U.S. strategic arrangement to fast track entry into the market. In fact, it just announced it would create a new holding company, Canopy USA, which will hold the company’s U.S. cannabis investments, and allow it to exercise rights to acquire Acreage.

Even better, the move will fast-track Canopy’s entry into the U.S. cannabis market.

After all, “The U.S. is projected to be an over $50 billion1 market opportunity, and this strategy aims to unlock the ability to capture share and return on investments made to date. Through these “stepping stone” transactions, Canopy will be strategically repositioned to capitalize on the benefits of complete ownership and control of its U.S. THC portfolio of assets upon U.S. federal permissibility,” they noted in a release.

“As the growth of the U.S. cannabis market continues rapidly at the state level, this strategy enables us to take control of our own destiny and capitalize on the once-in-a-generation opportunity in the largest cannabis market in the world,” said David Klein, CEO.  “We expect to unleash the full power of Canopy’s scalable and ideally-positioned U.S. cannabis ecosystem to unlock potential expansion opportunities. This strategy and positioning are true differentiators, which we expect to enable our investors and brands to realize value in the near term while positioning Canopy for profitable growth and a fast start upon U.S. federal permissibility.”

Aside from that, midterm elections could spark further upside.

Voters will soon decide on recreational cannabis use in Arkansas, Maryland, Missouri, North Dakota, and South Dakota. And, according to FiveThirtyEight’s Lester Black:

Biden “is now asking his own administration to start the process of making the drug’s legal classification match its reality.  The reevaluation is more than just an empty gesture. Experts like John Hudak, a senior fellow at the Brookings Institution, said there’s a very good chance of Biden’s directive leading to actual reform — not decades from now, but by the end of his current term in office.”

In short, we may be looking at the birth of another big rally for cannabis stocks.

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