The MORE Act — and More
Sometime between today and Friday, the U.S. House of Representatives will vote on the Marijuana Opportunity, Reinvestment and Expungement Act, otherwise known as the MORE Act.
Sponsored by Kamala Harris, the MORE Act, as currently written, would remove marijuana from the Controlled Substances Act‘s list of harmful narcotics; eliminate criminal penalties for manufacturing, distribution, and possession; expunge low-level marijuana convictions; and impose a 5% federal sales tax.
According to the pundits, passage is likely. However, it’s also extremely unlikely that the act will be approved by the Senate in its current form. In any event, the trend is clear (as I’ve written many times), and there’s no doubt that we will eventually get there.
In the meantime, we remain in a strong bull market, and leading marijuana stocks remain very strong.
Last week our portfolio became fully invested, adding one new stock (Village Farms (VFF)), and there are no changes today; all our stocks are acting well—in fact, eight have seen new closing highs in the past three trading days. Those eight (CGC, CRLBF, CURLF, GTBIF, JUSHF, TRSSF, TCNNF and VFF) can still be bought, but only if you’re an experienced momentum investor and know how to manage risk. Translation: by year-end, they could double—but they could also lose 50%. There’s a lot of greed and optimism out there, not just in marijuana stocks but in the broad market, and someday someone’s going to get hurt.
As for the other stocks, TPB is my best low-risk buy idea; the company doesn’t even sell marijuana, but the stock is trending slowly higher. And IIPR continues to trade in a tight base centered on 155, presumably gathering energy for its next leg higher, so it can be bought here if your portfolio would benefit from a REIT. As for GRWG, we pared back our holding last week because we were so overweight in it, but it looks quite healthy—and of course the company still has a great growth story.
FYI, our portfolio is now up 66.8% YTD, while the Marijuana Index is up 29.8%.