A recent poll in Florida found that 70% of voters favor the legalization recreational cannabis use.
The poll found they support legalization regardless of party affiliation. It shows that 75% of Democrats, 57% of Republicans and 78% of independents favor legalization. The survey, conducted by the University of North Florida’s Public Opinion Research Lab, also found that residents support legalization regardless of age.
In a tough bear market for cannabis stocks that stretches back more than two years it’s refreshing to see that broader trends in favor of legalization remain.
These findings are bullish for cannabis investors for two reasons.
First, the results confirm many polls that consistently find a majority of voters favor legalization, regardless of political party. This suggests that sooner or later, Congress will follow the legalization tide rolling through dozens of states and enact federal regulatory reform that favors cannabis.
Cannabis stocks got hammered last year when federal lawmakers failed to come through on promised reform. The SAFE Banking Act would have given marijuana companies access to banking services that are currently out of reach and which forces dispensaries (both medical and recreational) to deal with large amounts of cash.
The Florida poll results tell us politicians in Congress will revisit reform and get it done, to stay in tune with voters.
“With increasing mainstream support and meaningful regulatory reform on the horizon, tremendous growth opportunities lie ahead for U.S. legal cannabis,” says Kim Rivers, the CEO of the cannabis company Trulieve (TCNNF). “Overall, cannabis continues to become increasingly mainstream, gaining popularity across all demographics. Greater acceptance among Millennials and Gen Z consumers on top of expanding usage to displace alcohol and pharmaceutical products bodes well for long-term adoption.”
She notes that research groups project U.S. legal cannabis sales will nearly triple by 2030, surpassing $70 billion in annual sales by that year. A research group called New Frontier, for example, just predicted legal sales could reach $71 billion by 2030. She expects industry growth will resume this year “as cyclical trends inevitably reverse and numerous catalysts come to fruition.”
By the way, the Florida poll results confirm other bullish signals in the space, like stock buying by insiders at cannabis companies in the past few months. This is why, personally, I continue to add to my cannabis positions on any significant weakness.
Here’s the second reason why the Florida poll results caught the attention of cannabis investors. Cannabis proponents want legalization put to Florida voters via referendum in the 2024 elections. The poll tells us voters would give reform a thumbs up.
This matters, because Florida would be a big win for the cannabis industry given the state’s large population and tourist business. “With 22 million residents and 138 million annual tourist visits, we believe Florida will be a top legal cannabis market reaching $6 billion in annual revenue,” says Trulieve’s Rivers. Trulieve has a big presence in Florida and it is the primary funder of the ballot drive.
Zooming back out to the big picture, here’s how Cresco Labs (CRLBF) CEO and co-founder Charles Bachtell sums it all up. “We all have to realize that the tough year of 2022 does nothing to change the long-term thesis and the opportunity that gives cannabis,” he says. “This industry is going to be one of the largest consumer products categories in the United States and in the world. None of the challenges of 2022 change the long-term thesis and opportunity that is cannabis.”
Canaccord Genuity Group analyst Matt Bottomley agreed in a recent interview, suggesting the cannabis group is a buy in the current weakness because ongoing legalization and sales growth remain in place, and regulatory overhangs will get resolved eventually.
Look, it’s never easy being a contrarian. You have to know an investment thesis well, and you must have the strength to think independently. But as successful investors like Warren Buffett have taught us, contrarian bets can make you the most money in the markets.
To find out more reasons why a contrarian bet on cannabis makes sense now, consider subscribing to Cabot Cannabis Investor today.