Marijuana stocks bounced higher on big news out of Mexico Wednesday.
News that the country has finished drafting rules to permit medical marijuana sent shares of cannabis industry giant Canopy Growth (NASDAQ:CGC) up 5.4% by 1:05 p.m. EST on Wednesday. Doing even better today were smaller marijuana companies Aurora Cannabis (NYSE:ACB), Aphria (NASDAQ:APHA), and especially Tilray (NASDAQ:TLRY), which were up 6.2%, 7%, and 14.6%, respectively.
As NBC News reports today, the Mexican Health Ministry has published, and Mexican President Andres Manuel Lopez Obrador has signed, new regulations permitting pharmaceutical companies to research medicinal marijuana. Companies that wish to perform such research must first obtain permission from the Mexican health regulator.
The new rules also permit companies to grow and harvest cannabis for medical purposes in Mexico -- and to import it from abroad. Marijuana companies from Canada and the United States have been looking at Mexico with interest, NBC News says, but many had delayed investment decisions while waiting for the final regulation to be published. And that probably explains the immediate and dramatic reaction among marijuana stocks to the news today.
And this is only the beginning. As reported last year, Mexico's Congress is also in the process of legalizing marijuana for recreational use. This latter package of legislation has already passed the Mexican Senate and is working its way through the lower house of Congress. It could be approved as early as this month.
If and when that happens, says The Wall Street Journal, Mexico will in an instant become the world's largest legal cannabis market. And even that may not be the end of this trend.
Once the United States is bracketed by two large nations, both of which permit recreational use of marijuana, the pressure for federal legalization in the U.S. will naturally increase.
Nationwide legalization of marijuana: It looks like it's coming to America, folks.