New Jersey is on the fast track to legalizing recreational cannabis – and once again this is creating another great investment opportunity. I see four exciting cannabis companies that are ready to capitalize.
New Jersey gave the US cannabis industry a big jolt yesterday after New Jersey Governor, Phil Murphy, and state legislators announced they had agreed on legislation that would legalize recreational cannabis.
“Legalizing adult-use marijuana is a monumental step to reducing disparities in our criminal justice system,” Murphy said in a press release. “After months of hard work and thoughtful negotiations, I’m thrilled to announce an agreement with my partners in the Legislature on the broad outlines of adult-use marijuana legislation.”
Looking forward, the bill still has a few hurdles to clear.
It is still unknown if enough votes exist to clear the Democrat-controlled legislature. Murphy will have to rally enough votes in the Senate for legalization, but a floor vote is possible as early as March 25th.
Despite these short-term speed bumps, it looks like a lock that New Jersey will become the 11th state in the US to legalize recreational cannabis. I expect cannabis to go legal pretty quickly – by the end of 2019 at the latest.
If it happens, analysts are predicting that New Jersey will blossom into one of the largest cannabis markets in the country.
Greenwave Advisors, a cannabis research and consulting business, predicts that annual cannabis sales in New Jersey would reach $850 million, or 2.4% of the total US market by 2022.
Naturally, this has investors asking an important question – which cannabis companies are in position to capitalize on New Jersey’s green future?
I think these four promising cannabis companies that could thrive as a result of their early and growing presence in New Jersey.
Curaleaf Holdings (CSE: CURA, OTC: CURLF)
Caraleaf is headquartered in Canada but primarily operates in the US. In total, they own 42 local dispensaries, a dozen cultivation facilities, and 10 processing facilities. In New Jersey, Curaleaf owns one dispensary and one cultivation facility. They don’t have a super strong presence yet, but I expect Curaleaf to rapidly expand in New Jersey now that the recreational vote is on the table.
Terrascent (CNSX: TER, OTC: TRSSF)
Terrascent is Canadian cannabis company. In December, one of its subsidiaries, TENA, was awarded a permit to apply for a license to become a vertically integrated cannabis operator, which means to grow cannabis and sell cannabis at the retail level. From a group of 146 applicants, TENA received the highest score – a strong indicator that the company is highly likely to secure a permit.
Acreage Holdings (CSE: ACR, OTC: ACRGF)
Acreage is one of the largest US cannabis companies, growing and selling cannabis in 19 states. Acreage recently announced a cannabis supply deal with Compassionate Care Foundation, one of six licensed cannabis providers in New Jersey.
Choom Holdings (CSE: CHOO, OTC: CHOOM)
Choom is a Canadian cannabis company that just announced it has signed a letter of intent to purchase an unnamed New Jersey-based medical cannabis facility. I know that sounds a little vague, but it shows that Choom has its eye on New Jersey and I expect that to pay off in the long run.
The Big Picture
New Jersey is on the fast track to legalizing recreational cannabis. Analysts estimate annual sales could climb to $850 million by 2020. This is creating a huge opportunity for the small group of cannabis companies operating in the state and you may want to put CURLF, TRSSF, ACRGF, and CHOOM on your radar.
About the Author
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.