HighBridge monitors the progress of State’s legalization of marijuana daily. We are most assuredly anxious for addition of more States to the Recreationally Legal Club. But, even that will only be the beginning. What legalization really means is the eradication of black market sales. And that is what will fuel the explosion in the Marijuana Marketplace. Consider the following, taken from the National Institute of Cannabis Investors Newsletter, January 13, 2020 edition:
The Most Important Aspect of Cannabis Legalization
Ignore the noise when it comes to legalization and instead, focus on the big picture…
New York Gov. Andrew Cuomo (NY-D) vows to legalize adult-use cannabis in 2020. When it joins the recreational club, the State of New York is expected to haul in $3 billion in sales. Obviously, every cannabis investor wants Cuomo to make this happen and add another “green” state to the map. Outside of Cuomo legalizing cannabis for his state, voters in New Jersey, Florida, and Arizona are anxious to get to their polling places and put a check next to “Yes” on their ballots for legalizing adult-use cannabis.
“Demand from the public for full legalization is growing louder, and a recent survey showed nearly 90% of Americans favor legalization. You will see politicians work to meet the demands of their constituents, and you will increasingly hear their intentions to force legalization in their states.”
That’s what Don Yocham, the new Executive Director, told the staff at the National Institute for Cannabis Investors. And to unlock the real profit opportunities that lie ahead, cannabis investors need to see the forest for the trees. That’s why Don wanted to make sure you read this one thing today:
The Ever Expanding Cannabis Market
Legalization is very important to the progress of the industry, but it’s easy to get caught up in all the noise.
“New York legalizing cannabis is not going to send the MedMen Enterprises Inc. (OTC: MMNFF) stock price
through the roof,” Don told us.
What will send cannabis stock prices through the roof is money from the illegal market finding its way into legal markets. And all of that money coming in will lead to
massive stock appreciation. So, while it is important that New York legalizes cannabis for a number of reasons, the bigger picture is that legalizing all cannabis use across the country and bringing money from the illegal to legal markets is what will move the needle.
It’s that simple.
New Frontier Data, a company with the mission to be the intelligence authority for the cannabis industry, projects that all cannabis sales in North America were $86 million in 2018.
Source: New Frontier Data
As a reference, legal sales in North America in 2018 were $10.8 billion. That means more than $70 billion in sales were conducted in the black market. That’s a lot left on the table that should be trickling into the legal market, and that’s why legalization is so important for cannabis investing. Ultimately, when companies are allowed to sell recreational cannabis in any state, those revenues will be reflected in incredibly higher stock prices.