MMJ NAV generated a negative return of 14% which compared to a negative 17% for the benchmark return for the same period.
It is a different story for the cannabis industry following the US elections with a potential Joe Biden win causing a major rally in cannabis stocks.
Most US states have passed some form of medical or recreational cannabis legalisation and MMJ believes federal legalisation of cannabis is now a question of when and not if.
The following is an update from Embark Ventures, the asset manager of MMJ’s cannabis investment portfolio:
Election news from the United States appears very promising with Joe Biden poised to win the presidency.
This has caused a major rally in cannabis stocks. As of this writing, many of the major bellwether stocks have been up almost 50% or more in some cases over the past several days.
Further good news came in the form of voters in individual states choosing cannabis legalisation via ballot proposition measures including New Jersey, Arizona, South Dakota, Montana and Mississippi.
Oregon even chose the dramatic step of voting to have all recreational drugs be decriminalized.
These additional US states represent several billion dollars in potential tax revenue that can be collected by state governments in these COVID-hit hard times.
These five states alone could add $2.5bln a year in annual top line sales for the industry.
New Jersey in particular is fascinating due to its proximity to New York state – if cannabis legalisation is a success there then we imagine New York state can’t be too far behind.
They would be highly incented to collect those tax dollars directly instead of having their residents line the tax coffers of a neighbouring state.
Factoring in these latest changes and looking top down, we can see that a majority of US states have passed some form of medical or recreational cannabis legalisation.
Some of these states have been historically quite conservative in their attitude towards cannabis so the cultural change is quite real.
In our view, it’s a fait accompli that we will see federal legalisation in the US. It’s now a question of when and not if.