Many of the underlying trends in cannabis continue to be favorable even if this is not reflected in the stock prices, which are down sharply this month.


States continue to advance legalization of recreational use. Lawmakers remind us that federal regulatory reform in banking remains on the table, and will get taken up by key Congressional committees this year. Europe should begin to advance recreational use legalization within the next several weeks, starting with Germany. Cannabis sector insiders are stepping up to buy stock. Industry consulting firms continue to affirm robust sales growth projections of 13% a year through 2027. There are tentative signs that price compression is neutralizing.

Here are the latest developments in the cannabis sector over the past two weeks.

The bottom line: States continue to march forward with legalization, but the negative trends of price compression and higher financing costs weigh on weaker players. That will create acquisition opportunities for the stronger companies in the space.

Cannabis stocks are screaming higher this morning. Our AdvisorShares Pure US Cannabis (MSOS) ETF is up over 8%. Three of our portfolio names are up even more, 9% to 15%.