In this week’s Marijuana Market Update, I want to focus on the election and cannabis stocks.
Not candidates or their platforms — you can find that anywhere.
Instead, I want to look at the future of the cannabis industry in the fourth quarter of 2020 and into 2021.
(If you didn’t catch my post-election stock forecast video, you can watch it here.)
While I don’t see a big drop or gain in the overall market because of the election — unless the results drag out or are contested, as in 2000 — some specific ballot measures could provide the boost the cannabis market needs.
Election and Cannabis Stocks: Legalization on the Ballots
Five states will decide whether to legalize cannabis in some form. That means this election could have a huge impact on cannabis stocks.
If all five measures pass in November, more than 70% of the U.S. population will live in a state where cannabis is legal in some form.
New Frontier Data, a cannabis research firm, found that if all of those measures pass, it would collectively add $9.3 billion in revenue to the legal cannabis market through 2025:
That’s a 100% growth in revenue in just five years.
One other stat I found interesting: If all five measures pass in November, more than 70% of the U.S. population will live in a state where cannabis is legal in some form.
Can you imagine if I told you that could be the case 15 years ago?
Those revenue numbers have to have cannabis companies salivating. It shows what kind of impact the election will have on cannabis stocks.
Now, in terms of the state’s elections, there are two I would keep a close eye on. Be sure to watch my video to find out which two — and why.
Hint: The map below shows, geographically, why some states will see massive financial benefits from legalization.
The bottom line here is that next Tuesday is notable, not just for being a contentious presidential election … but for the massive effect it will have on the cannabis industry.
Update: Cannabis Watchlist
Enough about the election and cannabis stocks.
Now, I want to check in on our Cannabis Watchlist.
If you remember, two weeks ago, I added a tobacco company that transitioned into the cannabis field to the list.
And it hasn’t disappointed.
Turning Point Brands Inc. (NYSE: TPB) recently entered into an agreement to acquire Wild Hempettes LLC — a manufacturer of hemp cigarettes.
It also invested $3 million in ReCreation Marketing — a Canadian distribution company that supports various cannabis and CBD products.
At the time, Turning Point rated an 82 on Adam O’Dell’s six-factor Green Zone Ratings system, scoring high in size, quality and growth.
In just two weeks’ time, Turning Point’s shares have jumped more than 6%.
As far as our other watchlist stocks go:
- Schweitzer-Mauduit International Inc. (NYSE: SWM) is the best performer, gaining nearly 12% since we put it on the list on September 1.
- PerkinElmer Inc. (NYSE: PKI) — a cannabis testing company — is up 3.5%.
- Weather has hit Scotts Miracle-Gro Co. (NYSE: SMG). It’s starting to snow in parts of the Plains and Texas! But I’m confident that this stock will rebound.
As always, my team and I love the feedback we’re getting on our YouTube channel and through email!
Feel free to send comments, questions and stocks you want us to examine to feedback@moneyandmarkets.com — or leave a comment on YouTube!
Where to Find Us
To watch the Marijuana Market Update before anyone else, just subscribe to our YouTube channel, and get an alert when we release a new update. We cover a wide range of topics from the election and cannabis stocks to various other sectors within the stock market.
Coming up this week, we’ll have more on The Bull & The Bear podcast and our Money & Markets Week Ahead, so stay tuned.
Until next time…
Safe trading,
Matt Clark
Research Analyst, Money & Markets
Matt Clark is the research analyst for Money & Markets. He’s the host of our podcast, The Bull & The Bear, as well as the Marijuana Market Update. Before joining the team, he spent 25 years as an investigative journalist and editor — covering everything from politics to business.