Connecticut just became the 19th U.S. state to legalize recreational cannabis. While it’s not exactly a game-changer for the U.S. cannabis industry, Connecticut has a shot at growing into a $1 billion cannabis market within the next five years.
This is creating another great investment opportunity in the cannabis sector, and there are two leading cannabis companies that are best positioned to capitalize.
Connecticut just gave the U.S. cannabis industry some great news after Governor Ned Lamont signed a bill to legalize recreational cannabis. Here are some more details from Marijuana Moment.
The governor of Connecticut on Tuesday signed a bill to legalize marijuana—making it the 19th state to enact the reform. Noting that nearby states are also moving to legalize marijuana, the governor said the new law helps to keep Connecticut “economically competitive.”
Connecticut is the fourth state to legalize cannabis for adult use this year alone, following New York, Virginia and New Mexico. Under the Connecticut measure, possession of marijuana by adults 21 and older will become legal on July 1. Commercial cannabis sales could begin as soon as next May, but the bill does not specify an exact start date.
This is another win for the U.S. cannabis industry. Connecticut is the fourth U.S. state to go legal this year and the state is expected to generate more than $1 billion in annual cannabis sales (medical and recreational) within the next five years.
The Marijuana Fact Book is predicting annual medical and recreational cannabis sales will hit $950 million by 2024. Check out the chart below from mjbizdaily.com.
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2 Industry Leaders Ready to Cash in on Connecticut
Connecticut going legal is creating an investment opportunity that cannabis investors need to know about.
#1 – Curaleaf Holdings (CSE: CURL, OTC: CURLF)
Curaleaf is the largest cannabis company in the U.S. with a market cap of $9 billion. Headquartered in Massachusetts, Curaleaf has one of the best national footprints in the industry. It operates in 23 states, owns 101 local dispensaries, 22 cultivation centers, 30 processing sites, and has a patient list of more than 350,000.
While Curaleaf is a broad play on the U.S. cannabis industry, it’s also one of the best stocks to play Connecticut going legal.
Connecticut has issued four cultivation permits and Curaleaf owns one of them. Connecticut has issued 18 medical cannabis permits, and Curaleaf owns four of them.
Looking forward, in September Curaleaf will be eligible to apply for licenses to sell recreational cannabis. We expect Curaleaf to land these permits and that would enable the company to transform its dispensaries into medical and recreational outlets.
Curaleaf shares delivered huge gains in 2020 but they are currently down 25% from the 52-week high.
#2 – Green Thumb Industries (CSE: GTII, OTC: GTBIF)
Green Thumb is also one of the largest cannabis companies in the U.S. with a market cap of $6.5 billion. Green Thumb operates in 12 states, has permits for 97 retail locations and 13 manufacturing facilities.
Headquartered in Chicago, Illinois, Green Thumb is another broad play on the U.S. cannabis industry.
However, similar to Curaleaf, Green Thumb is an early leader in Connecticut’s medical cannabis market. Green Thumb owns one of the four cultivation permits that Connecticut has issued and two of the 18 retail permits. The retail permits make Green Thumb eligible to apply for recreational permits in September and we expect Green Thumb to land those permits.
Green Thumb shares were up big in 2020, but shares are currently trading 25% below the 52-week high.
The Big Picture on Connecticut Going Legal
Connecticut just became the fourth state in 2021 to legalize recreational cannabis and the 19th U.S. state to do so. This is creating another opportunity for cannabis investors.
Curaleaf and Green Thumb are two early industry leaders with early leadership in Connecticut’s medical cannabis market. That puts both companies in a position to cash in on recreational sales in the next few years and that should be good for shares.
Author Michael Vodicka owns shares of Curaleaf Holdings (CURLF) and Green Thumb Industries (GTBIF).
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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.
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