In 11 a.m. EDT trading, we're seeing shares of marijuana meme stock Sundial Grower (NASDAQ:SNDL) surge 9.1%, followed in quick succession by cannabis companies OrganiGram (NASDAQ:OGI), up 4.6%, and Tilray (NASDAQ:TLRY), up 2.7%.
Today's gains probably shouldn't be too surprising, however, coming as they do on the back of positive comments from the CEO of MJBiz, a cannabis industry news site, yesterday evening. Speaking at MJBizCon 2021 in Las Vegas, company CEO Chris Walsh predicted that whatever happens in Congress, 2022 will see at least four more states flip to recreational marijuana legalization -- and perhaps as many as seven.
The contenders, in Walsh's view, are Arkansas, Maryland, Missouri, North and South Dakota, Ohio, and Oklahoma. Additionally, Walsh points out that Idaho and Nebraska are in line to legalize marijuana for medicinal purposes. And as marijuana sales become legal in more and more places, Walsh predicts that U.S. sales of the drug will roughly double (or more) by 2025, running anywhere from $38.4 billion to $45.9 billion.
"This train is rolling, the momentum is continuing, despite the inaction of the federal government," summed up the CEO.
And even then, the good news wasn't over. Of particular interest to investors will be Walsh's prediction that 2022 will see an acceleration in marijuana mergers and acquisitions as bigger cannabis companies snap up their smaller peers to consolidate sales -- and profits.
"That's going to accelerate," said Walsh. "You're going to see some of the biggest companies coming together" in 2022. And combined with the fact that "many cannabis companies have been rightsized ... during the COVID-19 pandemic," there's even a chance that the industry as a whole might move closer to profitability. (Neither Tilray, OrganiGram, nor Sundial is profitable presently.)
If that's to happen, however, companies had better act fast. As Walsh observed, cannabis prices are still falling, making it a race to see who can consolidate markets and cut costs fastest to reach profitability soonest.