The U.S. cannabis market enters 2020 with plenty of catalysts for higher sales and better profits for industry participants. One of the primary ways to benefit from immediate growth in the sector is via state level approval of medical or recreational cannabis sales while the Federal government slowly pushes towards eventual Federal approval.
Marijuana companies’ earnings and stock performance were highlights in 2019. There was hope that 2019 would be a good year for the sector. Canada legalized recreational marijuana in 2018. However, the industry missed the expectations, which concerned investors. Most of the big cannabis players continued to report dismal performances in 2019. Analysts tried to understand the disappointing performances. Overall, many analysts think that marijuana companies are bad at forecasting.
They say it grows like a weed, and according to the chief executive officer of Denver-based Physical Commodities Exchange (PanXchange), the over-the-counter exchange that sets the price for hemp, there is a huge surplus.
The surplus is significant enough to have dropped the per pound price from $40 in July 2019, to around $10, currently.
With about 40 states expected to allow some form of legalization by the end of December, 2020 is poised to be a breakout year for cannabis.
At this point in the national discourse, the end of cannabis prohibition is now seen as an inevitability instead of a possibility. Many have started to compare cannabis legalization to repeal of the 18th Amendment and the re-legalization of alcohol. But how similar are they really? The answer may surprise you.
Cannabis education has seen remarkable momentum over the past 10 years.
In 2010, only a handful of U.S. states had medical cannabis programs. No adult-use legislation was passed anywhere in the country (or the world). Mainstream images of cannabis were mostly outdated stoner stereotypes in movies and television.
Much of America still viewed cannabis from a place of fear—a plant to be demonized, avoided and eradicated.
Cannabis legalization still isn’t guaranteed in 2020. Most of the discussions are at the state level. Democratic presidential candidates support federal legalization except for Joe Biden. Although Republicans don’t support legalization, they want more cannabis research. Cannabis has support from celebrities as well. Now Congress wants to push a few of the cannabis reform proposals for hearing.
The US legal cannabis industry is finding new legitimacy with each passing year, but cannabis is still far from federally legal in the US.
Things certainly did not go as expected for cannabis stock investors in 2019. Following a first quarter that yielded incredible returns, pot stocks spent the remaining nine months of the year retracing their steps. A combination of high tax rates on weed in the U.S., supply issues in Canada, and a persistent black market pushed most cannabis stocks into steep losses last year.
Washington’s legal cannabis industry employs over 10,000 people, yet only a small fraction of those workers are members of unions. But that could soon change if state lawmakers pass a bill that would place strict employment standards on legal pot businesses and heavily incentivize owners to sign contracts with unions.
