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After a Landmark 2018, Will Pot ETF See Same High in 2019?

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Marijuana stocks and the related ETF has been on a real high in 2018, courtesy of its monumental rally in mid-2018 on Canada’s pending legalization of recreational marijuana from Oct 17. ETFMG Alternative Harvest ETF (MJ - Free Report) , though down 29.3% this year and currently trading at $25.15 per share, reached a high of $42.26 in mid-September.

Canada became the first major world economy and the second country after Uruguay to legalize recreational marijuana. Sri Lanka, Thailand and the United Kingdom approved the medicinal use of the plant in 2018.

Though bubble fears and some downbeat earnings releases weighed on the fund in late 2018, let’s take a look if pot can see the same success in 2019?

More Legalization in 2019?

Cannabis is getting official approval from many U.S. states for recreational uses, apart from medical usage. Though pot remains entirely illegal at the federal level, Michigan approved a ballot measure in early November for recreational use of marijuana to become the 10th such U.S. State while Missouri and Utah saw legalization of medical marijuana, taking the total number of U.S. states greenlighting medical pot to 32.

Now, National magazine says Minnesota has "very strong” chance of legalizing recreational marijuana next year and New York governor Andrew Cuomo is also looking to legalize recreational marijuana (read: Why Marijuana Stocks & ETF Soared Today).

In late November, the European nation of Luxembourg announced that marijuana would soon be legalized for recreational use by adult residents. Many politicians in Italy are reportedly aiming for recreational legalization, where medicinal use already got a thumbs-up. Israel’s Parliament approved a law letting exports of medical marijuana.

Government in Lebanon is also planning to progress with legalizing farming and production of cannabis for medicinal use. Top courts in South Africa and the country of Georgia also overruled prohibitions on cannabis, legalizing the plant for individual use. For the fifth time Mexico’s supreme court ruled that prohibitions on pot are unconstitutional.

Gains to Come From Medicine & Beverage Industry?

U.S. drug regulators approved the first marijuana-based pharmaceutical to treat kids with a form of epilepsy, while the markets have been eyed by beverage companies to produce cannabis-induced beverage. 

There were tie-ups between Constellation Brands (STZ) and Canopy Growth Corporation (CGC), Canadian arm of Molson Coors and Quebec-based pot producer Hydropothecary Corp. to make such beverages. Diageo Plc DEO and Coca Cola KO have also been eyeing the industry.One industry analyst projects the cannabis beverage market to be worth $600 million by 2022(read: 4 Reasons Why Pot Stocks & ETF Could Be on a High in 2019).

Value of Pot Market in 2019?

Per a leading cannabis market research and data analysis firm, there were $10 billion worth of investments into cannabis in North America in 2018, twice the figure we saw in the last three years combined and the combined North American market is expected to reach more than $16 billion in 2019.

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