Cannabis stocks rallied last Thursday after the U.S. President – Joe Biden pardoned thousands convicted of “simple marijuana possession”.
How to play the cannabis stocks?
That sure was a step in the right direction considering it could eventually eliminate the “280E” and enable the American cannabis companies to work their way to the major exchanges.
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Nonetheless, it’s still a long way before the United States fully legalises cannabis on the federal level – and that warrants sticking to cannabis stocks that are not entirely at the mercy of the U.S., says a recent New Cannabis Ventures report.
A lot has to happen for Canadian LPs to enter the U.S; it will not be easy for them to acquire assets. Investors should focus on Canadian LPs that can excel in Canada and in other markets that develop, like in Europe.
Cannabis stocks lost steam on Friday
President Biden also ordered a review of how marijuana is classified. Still, cannabis stocks pared gains on Friday, suggesting the market is not entirely convinced that more positive changes will follow.
For a few of these companies, U.S. legalisation, would open the door to investors with large stakes potentially buying the rest of the company. We also worry that rescheduling could lead to the FDA taking over regulatory control of the industry.
The Global X Cannabis ETF is currently down more than 60% for the year. Just days ago, Tilray Inc reported disappointing results for its fiscal first quarter.
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