Legalization of recreational marijuana is on the verge of becoming a reality in the United States as nine states have already legalized every kind of marijuana use. Now, the state of New Jersey is making efforts to legalize the same. Additionally, the number of Americans supporting the legalization of marijuana usage in both medical and recreational ways has also increased significantly.
Moreover, on Jul 18, key industry players announced a slew of new expansion announcements ranging from acquisitions to partnership plans. Also, the industry witnessed first ever U.S. marijuana IPO from Canadian company Tilray. So clearly, the marijuana industry is expanding in the United States.
61% Americans Want Legalization of Marijuana
After eight states, California is the latest to legalize the usage of marijuana for recreational purpose. Moreover, Washington D.C. (District of Columbia) has also legalized recreational marijuana usage. In New Jersey, member of the General Assembly, Jamel Holley, has focused on the initiative to legalize marijuana for recreational purpose.
According to a survey by Pew Research Center, a nonpartisan American fact tank, in 2017, about 61% Americans supported legalization of marijuana use, for both medical and recreational usage. Key contributors to last year’s vote were millennials (70%), gen xers (66%) and baby boomers (56%). The legalization was also favored by 43% of Republicans, 69% of Democrats and 65% of independents voted in favor of legalization.
Acquisitions, Partnerships Play Pivotal Role
Toronto-based, Emblem Corp announced on Jul 18, said that around $3 million will be invested in Natura Naturals Inc. According to the companies’ three-year agreement, Emblem will acquire 3,000 kilograms of Natura’s marijuana each year.
Nick Dean, President and CEO of Emblem, said that the partnership between the two companies will result to “an immediate increase in product volume” boosting both recreational and medical use.
On the same day, Chicago-based Cresco Labs announced its expansion plans through partnership and acquisition of ownership interest. The company aims to expand its existing operations in the states of Ohio, Illinois and Pennsylvania.
Also, Cresco Labs has decided to open new businesses in states of Nevada, California and Arizona late this year. According to Cresco Labs’ press release, its expansion announcement will make the company “the largest cannabis operator in the U.S. based on potential consumer footprint.”
Tilray IPO Outpaces Expectations
Toronto-based, Tilray has become the first U.S. marijuana company to come up with an IPO. Last week, while talking about its IPO, Tilray said that from the sale of 9 million shares it would generate about $144 million.
However, after the IPO late on Jul 18, the company sold almost 6.254 million shares in the United States for $17 per share and about 2.476 million shares in other countries, including Canada for 22.45 Canadian dollars a share. The total IPO sum was $153 million for Tilray, better than last week’s projection.
Given these improvements, companies related to the cannabis industry like Terra Tech Corp. TRTC, GrowGeneration Corp. GRWG, Innovative Industrial Properties, Inc. IIPR and GW Pharmaceuticals PLC are expected to gain. Both Innovative Industrial Properties and GW Pharmaceuticals have a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Undoubtedly, the marijuana industry is thriving, following the legalization of both medical and now recreational cannabis in nine states in the United States and District of Columbia. Also, people of the United States are in favor of recreational marijuana legalization. Moreover, acquisitions, partnerships and IPOs are also expected to give the cannabis market a significant boost in the days to come.
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