Mr. Market is not getting high after Election Day, but marijuana stocks are certainly feeling good about themselves.
On Tuesday, voters in Colorado passed Amendment 64, making Colorado the first state in the nation to end marijuana prohibition. The ballot measure passed with 55 percent of voters favoring the historic change, compared to 45 percent voting against it, according to CNN. Washington also passed measures to legalize marijuana recreational use by the same margins. Massachusetts voted to allow medical marijuana.
Colorado’s amendment allows possession of an ounce, and permits growing as many as six plants in private and secure areas. Adults in both Colorado and Washington will need to be 21 years old to buy from licensed retailers.
The process will still take some time to implement, especially since federal law prohibits marijuana, but Colorado is voicing some support for its citizens. “The voters have spoken and we have to respect their will,” Colorado Governor John Hickenlooper said in a statement. “This will be a complicated process, but we intend to follow through.” He also cautious, “That said, federal law still says marijuana is an illegal drug so don’t break out the Cheetos or Goldfish too quickly.”
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While the increase in personal freedom is an obvious win for tax revenue and creates a regulated structure that will likely reduce related crime issues, marijuana-related stocks were among the few winners in the market on Wednesday. Despite the Dow Jones Industrial Average and the S&P 500 trading sharply lower, the approved marijuana reform sent some stocks surging. Medical Marijuana (MJNA), the first publicly held company vested in the medical marijuana and industrial hemp markets, jumped more than 20 percent in afternoon trading to hit a new 52-week high.
Other companies such as GreenGro Technologies (GRNH) and Hemp (HEMP) also gained 16 percent and 10 percent, respectively. GreenGro provides new farming solutions from small backyard vertical gardens to rooftop agricultural projects. Meanwhile, Hemp is a company with a self-proclaimed vision that foresees the potential worldwide benefits that may be derived from the myriad of uses for industrial hemp.
Pfizer (NYSE:PFE), which developed a synthetic form of marijuana years ago, still traded lower, but was one of the stronger performers in the Dow Jones Industrial Average. Coincidentally or not, McDonald’s (NYSE:MCD) also held up better than most blue-chip members. Munchies anyone?
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