Another day, another downdraft for marijuana investors.
As of 2 p.m. EDT Thursday, shares of marijuana stocks Hexo (NASDAQ:HEXO), OrganiGram Holdings (NASDAQ:OGI), Tilray (NASDAQ:TLRY), and Sundial Growers (NASDAQ:SNDL) are all sliding, down 4.7%, 2.6%, 2.4%, and 1.6%, respectively -- and the reason appears to be marijuana legalization.
Or rather, the lack of it.
In a column this morning, the Los Angeles Times laid out the facts about the marijuana legalization bill soon to be introduced for consideration by the U.S. Senate. As the paper reports, the draft Cannabis Administration and Opportunity Act promises to decriminalize marijuana sale, possession, and use, clear the criminal records of "nonviolent offenders of federal cannabis laws," and "formally" recognize that states can decide for themselves whether or not to legalize pot.
Thirty-seven states across the nation have already approved using marijuana for medicinal purposes, while 18 have legalized it for recreational use as well, and 60% of voters are said to support the measures contained in the Senate bill. Regardless, opines the paper: "most experts believe the bill will not pass," and even Senate Majority Leader Chuck Schumer, who backs the bill, admits he "does not currently have the votes to pass the legislation."
For marijuana fans (and marijuana investors) who had hoped that this would be the year that the federal government finally legalizes marijuana, that has to be a disappointing prognosis.
Nevertheless, as Brookings Institution senior fellow John Hudak pointed out in the piece, at the very least the draft Cannabis Administration and Opportunity Act is "a good conversation starter."
Whether it passes this year or next, or the year after that, I remain convinced that with marijuana already effectively legalized in nearly 3 out of 4 U.S. states, the writing is on the wall. Sooner or later, those states' representatives in Congress will get the message, and vote to legalize marijuana at the federal level. At this point, it's only a question of timing.