In today’s Marijuana Market Update, I:
- Discuss a new bill that House Republicans proposed and look at what state legislatures are doing to legalize cannabis.
- Share answers to a mailbag question on where to trade over-the-counter (OTC) stocks.
- Cover High Tide Inc.’s (OTC: HITID) stock consolidation.
Let’s start with legalization.
Federal Cannabis Legalization Efforts
Reps. David Joyce of Ohio and Don Young of Alaska filed a bill to remove marijuana from the Controlled Substances Act. This gives banking protections to the industry. Plus, all military veterans can access state-legal marijuana programs.
The House voted to pass the Marijuana Opportunity, Reinvestment and Expungement Act in December, but with a new Congress seated, it’s restarted the legalization process.
The House already passed cannabis banking reform in January. This new bill from Joyce and Young is another piece of that puzzle, alongside a reform bill in the Senate.
A bill like Joyce and Young’s goes a long way toward legalizing marijuana, but some advocates are concerned it doesn’t contain any social justice reform (expunging marijuana offenses from criminal records, for instance).
Now, the news of this latest federal effort prompted me to look at how states are moving forward with cannabis legalization.
Nationwide Cannabis Legalization Progress
The above chart shows where recreational marijuana usage is legal. South Dakota is still a question mark as the state’s Supreme Court recently heard arguments challenging voters’ approval of adult-use back in November.
Other states have been proactive:
- Alabama — The state House and Senate passed legalizing non-smokable medical cannabis in May.
- Connecticut — A House bill to allow home cultivation and establish a state Cannabis Control Commission advanced out of a committee in March. The Senate filed a bill to legalize cannabis use in February and introduced it to a committee, but it’s taken no further action.
- Delaware — The Delaware House introduced a bill to legalize cannabis in March, but we have no updates since.
- Florida — The House and Senate introduced bipartisan bills to legalize adult-use cannabis in January, but it hasn’t taken further action.
- Georgia — The governor signed the legalization of medical cannabis use into law in February.
- Hawaii — The state Senate passed a bill to legalize adult-use cannabis and raise possession limits to decriminalize it. The Senate passed the measure in March.
- Idaho — The Secretary of State in Idaho approved an initiative to legalize medical marijuana for signature collection. If it collects enough signatures, the measure will be on the ballot.
- Iowa — The Senate introduced a bill in February to legalize cannabis for ages 21 and older.
- Kansas — A bill cleared the House in May to establish a medical cannabis agency with the state’s Department of Health and Environment. That bill now goes to the Senate.
- Kentucky — The House filed two bills to legalize medical and adult use. Neither has advanced to a committee.
- Louisiana — A bill to remove jail time and limit fines for possession passed the state House in May. A bill to legalize recreational marijuana cleared a House committee and moved to the House floor in late April.
- Maryland — Both the House and Senate filed legalization bills, but they’ve taken no further action.
- Minnesota — The House passed a measure to legalize adult-use cannabis last week.
- Nebraska — A state senator proposed a constitutional amendment to legalize adult-use cannabis. A bill to legalize medical marijuana stalled in the Senate.
- North Dakota — A House bill to legalize adult-use marijuana passed the House on February 23. The Secretary of State also approved signature gathering on a constitutional amendment to legalize, which could be on the November 2022 ballot.
- North Carolina — The state introduced several bills to legalize medical and adult-use cannabis.
- Pennsylvania — A February bill in the Senate legalizes adult-use marijuana and expunges it.
- Rhode Island — A Senate bill allows adult-use sales in the state by April 2022.
- South Carolina — A House and Senate bill filed in early January allows for medical use.
- Tennessee — The state has filed bills to decriminalize cannabis and legalize medical use.
- Texas — The House passed a pair of bills: one to decriminalize cannabis and one to approve raising THC limits on medical cannabis.
- Wisconsin —Governor Tony Evers’ proposed budget included cannabis legalization.
- Wyoming — A House bill to legalize cannabis advanced out of a committee, but it missed the deadline for full House consideration. The House filed another bill to legalize medical marijuana.
These bills have a long way to go before they become law.
However, states seem to be moving faster to legalize medical and adult-use cannabis than the federal government is.
Answers From You
Last week, I asked you all a question that Robert sent in.
He said he had five brokerage accounts but couldn’t buy OTC stocks.
Thanks for all your responses!
Damon said, on YouTube:
JPMorgan offers almost all of the pot stocks, including the ETFs. I own Planet 13, GRAMF and all the U.S. pot stocks. Check there.
Carol emailed firstname.lastname@example.org and said:
I can buy OTC stocks from Fidelity and Charles Schwab. Have had no problem. Schwab has the ability to buy from other markets like Taiwan, as they have a foreign exchange.
Finally, Craig commented on YouTube:
TD Ameritrade allows OTC purchases, but they charge $6.95 and only purchase as a limit and not on market price.
So, Robert, I hope that answers your question. Please make sure you research all these suggestions to make the best decision for you.
High Tide Inc. Update
Now, I want to talk about some news surrounding a Money & Markets Cannabis Watchlist stock.
David emailed my team and me to ask:
I have a question about HITIF and its stock consolidation. I believe it is something that has to be done so it can list on a stock exchange, but I’m not exactly sure how this works and how it might affect the stock price. Can you explain how this works?
First, thank you for the question! I recommended High Tide Inc. (OTC: HITID) for our Cannabis Watchlist in March.
At the time, I knew that the Canadian company was pursuing a listing on the Nasdaq.
On May 12, the company announced a 15:1 share consolidation, meaning, every 15 shares of High Tide stock you owned would be consolidated into a single new share.
This is because major stock exchanges have share price requirements. Before the consolidation, High Tide traded around $0.60 per share — well below the Nasdaq requirement.
The new share price is around $9 (15 shares x $0.60).
If you owned High Tide stock before the consolidation, nothing changed except the number of shares you own. For every 15 you owned before, you own one.
You might also notice that the OTC ticker symbol changed from HITIF to HITID.
After the consolidation, the price dropped, but it’s already started to rebound.
On a side note: High Tide was recently added to the Cannabis ETF (NYSE: THCX).
The exchange-traded fund invests in the stocks of companies operating across legal cannabis-based pharmaceutical and consumer wellness sectors.
Formed in 2019, it tracks the Innovation Labs Cannabis index, and 33 stocks comprise the ETF.
High Tide hopes to list on the Nasdaq later this month under the ticker HITI. I’ll keep you updated.
Coming up this week, we’ll have more on The Bull & The Bear podcast and our Money & Markets Week Ahead, so stay tuned.
Don’t forget to check out our Ask Adam Anything video series, where we ask your questions to Chief Investment Strategist Adam O’Dell.
Green Zone Fortunes co-editor Charles Sizemore also has a weekly series called Investing With Charles, where he breaks down dividend investing each week.
Remember, you can email my team and me at email@example.com — or leave a comment on YouTube. We love to hear from you!
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.