Is Now the Time to Buy Marijuana Stocks?

Is it time to start investing in marijuana stocks?

It’s a question investors are starting to think about as public opinion on cannabis changes. 

It wasn’t long ago that a majority of the country opposed recreational use. Now, things have shifted and more than two-thirds of Americans say that it should be legal.

And that changing public opinion has started shaping policy, albeit slowly. 

As of the time you’re reading this, medical marijuana is legal in 37 states. Recreational marijuana is legal in 18 of them. 

In my home state of Maryland, the question of recreational cannabis is going to the ballot for voters to decide in November’s elections — 67% of those polled are in favor.

It’s just one of several states that have something related to marijuana legalization in question this year. 

But of course, that doesn’t matter nearly as much as marijuana being legal at the federal level. 

And because it isn’t, investment dollars aren’t pouring into marijuana stocks. 

That brings us to the Marijuana Opportunity and Reinvestment Expungement Act, otherwise known as the MORE Act. Under this piece of legislation, cannabis would be removed from the federal list of controlled substances. It would also abolish penalties for growing, possessing, or distributing it, and would expunge nonviolent convictions related to cannabis. 

This bill passed the House of Representatives earlier this month and has moved on to the Senate where it faces a tougher battle. 

The Senate also has its own bill, the Cannabis Administration and Opportunity Act. This bill does some of the same things as the MORE Act, like removing marijuana from the list of controlled substances and helping expunge certain criminal records. It would also allow businesses to access financial services like banking and loans, which they can’t do right now. 

When he was campaigning in 2020, President Biden promised to decriminalize cannabis use and expunge related criminal records. He’s remained silent on these pieces of legislation moving through Congress, but he’s at the very least aware that this is an issue many people in the US care about. 

All of this is to say that progress is slow. 

So slow that the sector saw its gains wiped out once the market decided there were better places to park money. 

That sentiment could last a while with Congress dragging its feet on legalizing at the federal level and showing little concern for the will of the people. 

That leaves investors looking to get into marijuana stocks in an interesting place. 

Many names across the sector are down overall, which presents an opportunity for picking up shares cheap and waiting. 

But the caveat is that no one knows exactly how long investors in the cannabis sector will be waiting. 

It’s going to take a catalyst, likely at the federal level, to make marijuana stocks surge again. While the trend is moving in that direction, it’s anyone’s guess when it will actually get there. 

Because of the sector’s potential, it’s one that we’ll keep an eye on. 

You can learn more about how we’re watching the sector and when we plan to buy in here.

Ryan Stancil

Ryan Stancil
Editor, Daily Profit Cycle