With federal cannabis reform possibly looming, getting into cannabis stocks could be a smart move
The year 2022 does not have long to go. And it is precisely in these final stages that many investors redouble their efforts to achieve some extra profitability before the end of the year. Especially because in this final stretch, there is what is known as the ‘year-end rally,’ which is nothing more than a generalized upward trend that usually occurs in most of the world’s stock markets. It is possible that the cannabis industry may see some upward movement before the year comes to an end, so experts in this sector believe it may be a good time to place your bets.
The good thing about the cannabis industry is that there are obvious long-term price catalysts, which look pretty good for 2023. One of them is legalization, and while it has been years since states have made their own decisions, the country has never been closer to federal reform.
Oregon was the first state to decriminalize cannabis in 1973. Ten other states began to follow in the same footsteps later that decade. Since then, both medicinal and recreational markets have spread to several jurisdictions, so much so that adult use is now legal in 21 states and has been decriminalized in ten others. While it is not yet clear when the changes are coming at the federal level, policy reform could support the US cannabis industry in other ways.
Another important factor to consider is the SAFE Banking Act. Recent polls continue to show that two out of three Americans support cannabis banking. Currently, financial institutions are still unable to provide their services to US cannabis companies as the drug continues to be banned at the federal level.
However, the passage of the SAFE Banking Act could change the landscape. The legislation seeks to allow banks to share in obtaining collateral to work hand-in-hand with the industry. This would unlock new and cheaper sources of financing for the US cannabis industry. As a result, the market could increase its profitability while reducing its cost of capital.