Marijuana shares rose higher on Thursday after lawmakers in Mexico a day earlier enacted a bill that would legalize cannabis for recreation, while a subsidiary of British American tobacco (BTI) plans to take a major stake in Canadian pot maker Organization chart (OGI).
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In Mexico, the House of Representatives, the lower house of the country, approved a broad version of the bill in a vote 316-129 and, according to various media reports, subsequently began debating the details. Nevertheless, the bill is expected to clean up the Senate and become law.
The bill would allow adults to buy and consume marijuana and grow a handful of plants. The law would also create a licensing system for businesses and farmers to produce and sell cannabis products.
Marijuana shares rose higher earlier this year as U.S. legalization gained momentum. Those shares have since dropped their profits.
Even if the US and Mexico were legal, it is unclear how much international trade law would allow cross-border sales. And every pot producer entering a new country will face challenges in building infrastructure to grow and sell cannabis.
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Other nations legal
Canada and Uruguay have already legalized recreational marijuana. But Mexico would be the largest legal cannabis market to date, with its population of about 130 million.
More countries worldwide have also started legalizing medical use. In the US, Virginia became the 16th state to pass legislation for recreation last month. Sales in the state are expected to begin in 2024.
The legalization of Mexico would take place after years of drug cartel violence in the country. As the New York Times noted, legalization is unlikely to limit violence in a significant way, as cartels move toward the sale of other drugs. In the US, some law enforcers said the illegal stock originated in much of California.
The bill aims to prioritize smaller farmers in the licensing process, the Times said. But it is said that the benefit to them is also uncertain.
When Colombia legalized medical cannabis several years ago – in part to keep smallholder farmers and indigenous communities out of the illegal drug trade, observers expressed concern about the ability of farmers to fully participate in an industry at risk of growing operators to be managed.
Most marijuana stocks rise
Among Canadian marijuana stocks, Roof growth (CGC) rose 7.4% in the stock market today. Tilray (TLRY) jumped 17%. Africa (APHA) achieved 12%. Tilray and Aphria plan to merge.
Cronos Group (CRON) achieved 7.7%. Aurora Cannabis (ACB) increased by 7.5%.
Among U.S. marijuana stocks traded over the counter and in Canada, Curaleaf (OTC: CURLF) decreased 0.1%. Cresco Labs (OTC: CRLBF) increased by 4.4%. Acreage Holdings (OTC: ACRHF) increased by 0.8%.
Organigram Lands Tobacco Investment
Meanwhile, Organigram said a British American Tobacco subsidiary would invest $ 175.6 million in the company for a 19.9% stake.
Under the agreement, the companies will establish a ‘Center of Excellence’, stationed in an Organigram indoor facility in New Brunswick, Canada, which focuses on the development of cannabis products. The initial focus of the effort will be on the downtown, the non-psychoactive compound found in cannabis plants.
Tabakreus Altria (MO) announced plans at the end of 2018 to take a major stake in Cronos Group. However, some analysts said the results of the deal could be sluggish.
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