Pot stocks soar as U.S. House committee clears bill on federal weed legalization

Pot stocks soar as U.S. House committee clears bill on federal weed legalization
(Reuters) – Shares of marijuana companies rose on Thursday after a U.S. congressional committee passed a legislation to decriminalize cannabis, taking it a step closer to being approved by the Democratic-controlled House of Representatives.

The bill, which was passed 24 to 10 in the House Judiciary Committee on Wednesday, sent shares of Canopy Growth, Aurora Cannabis, Aphria Inc  and Tilray Inc  up between 8% and 15%.

“We think federal legalization would be a big positive for investor sentiment surrounding cannabis equities, which have been battered by oversupply and a steep price decline for the underlying commodity since becoming legal in Canada,” said Garrett Nelson, senior equity analyst at CFRA Research.

The approval comes two months after the House passed a bill to advance legislation that would allow banks to provide services to cannabis companies in states where it is legal.

The latest bill, which has more than 50 co-sponsors, enables states to set their own policies while allowing to expunge federal marijuana convictions and arrests.

Additionally, the bill will authorize a 5% federal sales tax on marijuana products that are manufactured in or imported into the United States.

However, analysts were skeptical about the future of the bill.

“It’s such an early step in a long process that there are no near-term implications for cannabis stocks. The Senate isn’t likely to approve it, even if the House were to do so,” said Alan Brochstein, managing partner at New Cannabis Ventures.

Shares in the sector are down more than 25% this year, according to the alternative harvest ETF <MJ.P>, which tracks cannabis-related stocks, taking a blow from a slow roll out of retail stores and oversupply in Canada, as well as uncertainties related to U.S. regulations.

Weed companies have been spending heavily to expand and strike partnerships in the United States, banking on more states legalizing cannabis for both recreational and medical use.

Currently, 11 U.S. states have legalized marijuana for recreational use, while 33 states have approved it for medical purposes.

(Reporting by Shanti S Nair in Bengaluru; Editing by Sweta Singh and Sriraj Kalluvila)

Gang-ravaged Mexico stuck in marijuana ban as U.S. opens up

FILE PHOTO: Marijuana plants for sale are displayed at the medical marijuana farmers market at the California Heritage Market in Los Angeles, California,

By Joanna Zuckerman Bernstein

MEXICO CITY (Reuters) – Mexican advocates for drug reform are voicing alarm about the country’s widening gap with the United States on marijuana legislation, as criminal violence surges again south of the border.

Tens of thousands have been killed over the years in Mexico, on the front line of a U.S.-led war on drugs. The country’s prohibitionist approach to marijuana is increasingly at odds with the United States, where liberalization is advancing.

California in November became the first state on the U.S.-Mexico border to vote for comprehensive cannabis legalization, further pressuring Mexican legislators to change policy.

Earlier this month Mexico’s Senate duly passed a limited medical marijuana bill. But it has yet to be approved by the lower house and critics say it is still far too little.

“It’s a teeny, tiny reform for an enormous problem in the country,” opposition leftist senator Mario Delgado said during the discussion of the medical marijuana bill.

“It’s absurd that on this side of the border we continue with the violence, the deaths; and on the other side … this same drug is considered legal for recreational use.”

Driven by widespread gang violence, murders are on track to breach the 20,000 mark in 2016 for the first time in four years, adding to more than 100,000 gang-related deaths in the decade since the government began a military-led crackdown on drug cartels.

Many thousands more have disappeared.

Pena Nieto said in 2014 that Mexico could not pursue diverging paths with the United States on marijuana. Earlier this year, he submitted a bill to close the gap on U.S. legislation. But his own lawmakers have been reluctant to follow his lead.

Starting with Washington and Colorado in 2012, U.S. states have begun to legalize recreational use of marijuana, and many more now permit medicinal use, as does Canada.

California, which has an economy roughly twice the size of Mexico’s, was widely seen as a bellwether for a shift in policy.

Mexico’s Supreme Court last year set the ball rolling in a landmark case, granting four people the right to grow and consume weed, and inspiring hope for change.

In April, Pena Nieto proposed decriminalizing possession of up to 28 grams of marijuana for personal use, and said it would allow people jailed for holding up to that amount to go free.

But senators in his Institutional Revolutionary Party (PRI) put the initiative on ice, saying it “requires a greater analysis,” and only backed medical marijuana use.

The PRI blamed heavy losses in state elections in June on Pena Nieto pushing a liberal agenda, notably his bid to legalize gay marriage, said Lisa Sanchez, drug policy director at the organization Mexico Unido Contra la Delincuencia.

“They immediately transferred that discussion into the drugs issue by saying, ‘If we go too liberal, we might lose more elections,'” Sanchez said.

Opinion polls show that while there is public support for medical marijuana use, Mexicans are still resistant to the idea of an outright liberalization of the drug for recreational ends.

While Congress procrastinates, some people are even taking advantage of the U.S. opening, said Jaime Andres Vinasco, a doctoral student at university Colef in Tijuana, a border city synonymous with Mexican drug traffickers selling to U.S. buyers.

In Tijuana, moneyed consumers enjoy medical marijuana brought over from California dispensaries that is more potent and of higher quality than local weed, said Vinasco, who has spoken to users and dealers for his research on the reverse flow.

“The cannabis from California, for the Tijuanenses, or residents of Tijuana, has become, for the great majority, a luxury item,” he said. “Quite a paradoxical phenomenon.”

(Reporting by Joanna Zuckerman Bernstein; Editing by Dave Graham and David Gregorio)

Voters could legalize marijuana for quarter of all Americans

Pedestrians pass by a DC Cannabis Campaign sign in Washington

By Sharon Bernstein

SACRAMENTO, Calif. (Reuters) – Nearly a quarter of Americans will live in areas where recreational marijuana use is legal if voters approve initiatives on Tuesday permitting the recreational use of cannabis in California, Massachusetts and three other states.

With pot already legal for use by adults in four states and the District of Columbia, a win for legalized marijuana in California alone would make the entire West Coast a cannabis-friendly zone, completing a geographical march begun in Washington state and Oregon.

Potential victories in Arizona, Nevada, Massachusetts and Maine would fill in much of the rest of the West and extend recreational use to the Northeast. Opinion polls show voters favoring the initiative in all five states.

In addition, measures to legalize medical marijuana or expand its use are on the ballot in North Dakota, Montana, Arkansas and Florida.

An unnamed worker waters cannabis plants on Steve Dillon's farm in Humboldt County, California,

An unnamed worker waters cannabis plants on Steve Dillon’s farm in Humboldt County, California, U.S. August 28, 2016. REUTERS/Rory Carroll/File Photo

Twenty-five states already have legalized cannabis in some form, whether medical or recreational, or both.
In California, where medical marijuana has been legal since 1996, a recent poll by the Public Policy Institute of California showed 55 percent of likely voters supported a ballot initiative that would authorize the state to tax and regulate retail cannabis sales much like it does alcoholic beverages.

That was similar to the numbers favoring legalization from opinion polls in Massachusetts and Maine. Slimmer majorities or pluralities also point to legalization in Arizona and Nevada.

Approval by California alone, America’s most populous state with 39 million people, would put nearly a fifth of all Americans living in states where recreational marijuana is legal, according to U.S. Census figures. That number grows to more than 23 percent if all five state measures pass.

Backers of legalized marijuana sales have tried for decades to win support at the ballot box, with little success until the past few years, starting with victories in Colorado and Washington state in 2012.

Experts say the latest initiatives include more sophisticated regulatory mechanisms aimed at keeping cannabis away from children and banning the involvement of criminal gangs and drug cartels. Public opinion has rapidly swung toward favoring legalization.

“It’s changed in the minds of these voters from being like cocaine to being like beer,” said University of Southern California political scientist John Matsusaka.

Legalization by even a few of the states where measures are on the ballot could prod the federal government, which still classifies marijuana in the same category as heroin, to begin rethinking its laws and policies, Matsusaka said.

(Reporting by Sharon Bernstein; Editing by Daniel Trotta and Peter Cooney)