What Will Cannabis Stocks Do If U.S. Legalizes Pot? See Canada

What Will Cannabis Stocks Do If U.S. Legalizes Pot? See Canada

The cannabis space is once again alight with excitement about legalization efforts in a major North American country. Back in 2018, it was optimism about impending federal legalization in Canada, which sent local pot stocks such as Canopy Growth Corporation  (CGC) - Get Report and Tilray  (TLRY) - Get Report soaring as hopes of a booming industry buoyed valuations that, in hindsight, were well beyond reason.

Now, recent optimism about growing state legalizations and the possibility of federal legalization in the U.S. has helped cause U.S. cannabis leaders Curaleaf CURLF and Trulieve  (TCNNF) - Get Report, as well as Canadian pot stock stalwarts such as Canopy, Tilray and Hexo Corp.  (HEXO) - Get Report, to each increase by triple-digit percentages in the past year, despite a recent pullback.

While the stellar performance of cannabis stocks since their nadir in 2020 has multiple contributing catalysts, including an expected emergence from COVID-19 lockdowns, optimism on U.S. legalization has certainly been a major contributing factor.

High Times Ahead?

In just the past few months, New Jersey, New York, Virginia and New Mexico have legalized cannabis consumption, bringing the total to 16 states and Washington D.C. More than double that number allow for medical marijuana, further suggesting broad societal acceptance