Last week was eventful for the cannabis industry, but mostly on a top-down political level. The ice that was American drug policy is continuing to melt, and in places where it would have been unthinkable only a few short years ago.

Meanwhile, there was some very encouraging news coming from Canada -- which matters, since our neighbor to the north is the largest and most important country that has fully legalized marijuana so far. 

Paper ballot under bowl of cannabis buds.

Image source: Getty Images.

Southern comfort

Last week medical cannabis legalization in Alabama and Kentucky advanced, and at virtually the same time. In both instances, bills sanctioning this form of marijuana sale and consumption moved through the legislatures of the two states.

Of the two, this movement is further along in Kentucky. On Thursday the state's House of Representatives passed House Bill 136 by a wide margin, with a ratio of more than two to one members voting in favor. The bill now crosses the legislative border to the state Senate. If it passes there, it'll be destined for the Governor's office for a final signature before it becomes law.

In Alabama, mere days after a medical marijuana proposal in that state's Senate was introduced, it cleared its first obstacle -- a vote in that body's judiciary committee. Senate Bill 165's next stop is a full vote in the Senate, and if it passes it'll start going through the legislative process in the state House of Representatives.

The South is the region of the U.S. that has been the most resistant to making cannabis legal, in any form. The fact that two of its states not only have such bills in their respective legislatures, but at the same time, is a solid indication of the rapidly changing American attitude toward marijuana in general.

We shouldn't, however, view Alabama and Kentucky as vast, untapped markets with high potential for marijuana companies. Both bills are rather restrictive, for example limiting medical cannabis use to a relatively limited set of ailments, and barring any smokable form of the drug from sale or consumption. And I should emphasize that legalization for recreational use is not being considered by either legislature now.

Still, we can expect that nearby companies that operate dispensaries and/or sell product directly will attempt to get involved in these markets. Kentucky's neighbor Illinois has a famously vibrant and fast-growing marijuana industry thanks to its recent legalization of recreational product.

Green Thumb Industries (GTBIF -0.55%) and Cresco Labs (CRLBF -1.98%) are both headquartered and operate dispensaries in that state, and have reported brisk sales. This, however, hasn't been reflected in the performances of their stock -- Green Thumb's is down by 17% since the beginning of the year, and Cresco's has declined by 25%.

Please note that Green Thumb and Cresco wedging themselves into the Kentucky market is rank speculation on my part; neither company has officially stated this to be a goal.

Canada, land of growth

Meanwhile, up north the cannabis world continues to expand. Statistics Canada, that country's official numbers cruncher, reported sales of legal marijuana for the final month of 2019.

In December, consumers in Canada purchased more than 146 million Canadian dollars' worth ($110 million) of the green stuff. That represented sturdy growth of 155% over the December 2018 figure, although to be fair the latter month was just after recreational cannabis became legal in the country.

Zooming in to a narrower time frame, though, still reveals that the industry is headed in an encouraging direction -- this past December total cannabis sales grew by 8% month-over-month.

All told, weed sales came in at CA$1.2 billion ($907 million) in 2019. Pundits are predicting continued growth in the immediate future, which stands to reason given the newness of the Cannabis 2.0 segment, and the fact that the most populous province, Ontario, finally seems to be getting its act together in terms of licensing dispensaries.