Pot stocks dive as Florida rejects legalization of recreational marijuana
Nov 6 (Reuters) -A ballot measure to legalize the recreational sale and use of marijuana in Florida failed to pass late Tuesday, sending shares of pot companies into freefall and dealing a blow to cannabis firms that had invested millions in the legalization campaign.
The passage of Amendment 3 would have legalized the sale of marijuana for recreational use to adults 21 years of age and older from medical marijuana treatment centers and other state-licensed entities.
The initiative received more than 55% of the votes in favor but fell short of the 60% majority it needed to pass.
Tilray Brands TLRY.O shares slid over 10% premarket, and U.S.-listed shares of SNDL SNDL.O and Cronos Group CRON.O fell 13% and 4%, respectively.
Canopy Growth CGC.O was down over 20% and Aurora Cannabis ACB.O dropped 9%. ETF AdvisorShares Pure US Cannabis MSOS.P plunged 14.2%.
Florida was touted as a very lucrative market, with projections from cannabis analytics company Headset indicating the Sunshine State could have seen $4.9 billion to $6.1 billion in sales during the first year of implementation of adult-use sales.
Twenty-four U.S. states have so far legalized the recreational use of cannabis, though it continues to be illegal at the federal level. In 2016, Florida voters passed a constitutional amendment allowing medical marijuana in the state.
Cannabis companies had a lot riding on the vote, with major pot firms having made substantial contributions to Smart & Safe Florida, the group advocating for the passage of Amendment 3.
Trulieve, which operates 156 stores in Florida and is the largest player in the state, has made nearly $144.6 million in contributions to the group since 2022.
ATB Capital Markets analyst Frederico Gomes said if marijuana use is reclassified as a less serious federal crime, it could more than offset any effects of the failure to pass the amendment.
Reporting by Mrinalika Roy and Sourasis Bose in Bengaluru; Editing by Abinaya Vijayaraghavan
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
