The U.S. cannabis industry has a powerful new ally – one of the largest and most influential tech companies ever. Not only does this tech goliath support federal cannabis legalization, but it will also invest millions lobbying Congress to make it happen.
Today I’ll explain how Amazon’s announcement could impact the cannabis industry and how to potentially profit with two cannabis stocks that just reported impressive first-quarter sales growth.
Amazon Announces Support for Legalization
Amazon (NASDAQ: AMZN) made a big splash in the cannabis industry last week after announcing its support for federal cannabis legalization.
The company wants to achieve this goal through the More Act, a cannabis bill currently in Congress that would essentially legalize cannabis at the federal level. Here are some more details from Marijuana Moment.
Amazon said on Tuesday that it will stop drug testing many of its workers for marijuana and will instead “treat it the same as alcohol use.” It is also formally joining the movement in support of cannabis legalization and will actively lobby Congress in support of legislation to end federal prohibition.
In order to achieve this goal Amazon said it will lobby Congress for legalization.
“Because we know that this issue is bigger than Amazon, our public policy team will be actively supporting The Marijuana Opportunity Reinvestment and Expungement Act of 2021 (MORE Act)—federal legislation that would legalize marijuana at the federal level, expunge criminal records, and invest in impacted communities; We hope that other employers will join us, and that policymakers will act swiftly to pass this law.”
This is good news for the U.S. cannabis industry. Amazon is one of the most powerful and influential companies in the world with a strong history of achieving its goals.
Amazon supporting legalization increases the probability that significant cannabis reform will pass in the next 12 months. If the More Act passes, I expect it to give cannabis stocks a big jolt higher.
In the meantime, U.S. cannabis stocks are on sale. The Advisor Shares US Cannabis ETF (NASDAQ: MSOS) is down 25% from the 52-week high.
Shares have developed a strong level of support around the $40 level. Looking forward, shares are in position to rebound from this key level.
Below are two early industry leaders that are in a position to benefit from the More Act. These billion-dollar companies are two of the largest in the cannabis industry and both just reported impressive quarterly results that show they are cashing in on the high-growth U.S. cannabis industry.
2 Stocks That Could Jump on More Act
Ascend Wellness (CSE: AAWH, OTC: AWWH) is a $1.7 billion cannabis industry leader that just began trading on the Canadian Stock Exchange.
Founded in 2018 and headquartered in New York, New York, Ascend is one of the largest cannabis companies in the U.S. Ascend owns an impressive portfolio of cannabis cultivation facilities and dispensaries. That includes:
- 17 dispensaries in five U.S. states, including Illinois, Massachusetts, New Jersey, Ohio, and Michigan.
- 74,000 square feet of cultivation space producing medical and recreational cannabis
With these assets in place, Ascend is cashing in on the high-growth U.S. cannabis industry. The company’s recent first-quarter results included impressive sales growth that is virtually unmatched by any other industry.
- Total revenue of $66.1 million increased 21.8% sequentially and 192.7% year-over-year.
Columbia Care (CSE: CCHW, OTC: CWBHF) is an early leader in the high-growth, U.S. cannabis industry. Headquartered in New York, New York, Columbia is one of the largest cannabis companies in the U.S. with a market cap of $1.7 billion.
Columbia Care boasts an impressive portfolio of cannabis assets. The company:
- operates in 18 U.S. states and the European Union.
- owns 76 dispensaries and 24 cultivation and manufacturing facilities.
- just reported Q3 revenue of $54 million, an increase of 64% from last quarter and 145% from last year.
Columbia Care is also delivering impressive sales growth. First-quarter sales hit $93 million, up 220% from the same period last year.
In the meantime, Columbia shares are on sale, trading 30% below the recent 52-week high. Looking forward we expect Columbia shares to recover and hit a new 52-week high by the end of 2021.
The Big Picture
The U.S. cannabis industry just landed a powerful new ally after Amazon announced its support for federal cannabis legalization through the More Act.
Amazon’s support of the More Act increases the probability the bill will pass in the next 12 months, and if that happens I expect cannabis stocks to get a big jolt.
About the Author & Cannabis Stock Trades
Michael Vodicka is an equity analyst with more than 20 years of experience trading and investing. His research has been featured in some of the industry’s most respected publications. He has been investing and leading investors in the cannabis sector since 2013.
Cannabis Stock Trades was selected by Feedspot as one of the Top 100 Marijuana Blogs.