The Cannabis Stocks Could Win If New Jersey Legalizes Adult Use

© Provided by Benzinga

On Election Day, Nov. 3, voters in New Jersey — where there’s already an existing medical cannabis market — will consider legalizing adult use.

The Garden State will likely vote “yes,” according to Cantor Fitzgerald analyst Pablo Zuanic. As a result, several big-name cannabis companies stand to benefit.

“We think NJ voters are likely to approve rec legalization this [November],” Zuanic said in a note this week. Polls indicate 65% approval among voters.

Who Benefits From Legal Cannabis In New Jersey?

A vote for cannabis bodes well for a company like Curaleaf Holdings Inc. (OTCQX: CURLF), and they should “trade up on the news given market share and sales exposure,” the analyst said. 

Acreage Holdings Inc. (OTCQX: ACRDF), which has two stores in the state, will also benefit from New Jersey “going rec,” he said.

Green Thumb Industries Inc. (OTCQX: GTBIF) would likely add two more stores and “add capacity once there is clarity on the state’s path to rec,” Zuanic said.

Cantor doesn’t cover TerrAscend Corp. (OTCQX: TRSSF) or Columbia Care Inc. (OTCQX: CCHWF), but both companies have said they plan to operate three stores plus cultivation, the analyst said.

“But of these two, we understand NJ would be a larger % of company sales at TerrAscend.”

How Long Would Adult Use Take To Launch?

Today, 11 states allow legal recreational use: Colorado, Washington, Alaska, Oregon, California, Maine, Massachusetts, Nevada, Vermont, Michigan and Illinois.

In each market, it has taken a year or longer for state legislatures to actually get a rec program up and running.

New Jersey “will be slow,” Zuanic said, citing red tape, pending lawsuits and “no clear plan post ballot.”

Pennsylvania’s legislature, which is Republican-controlled, may enact a rec program by mid-2021 versus a New Jersey start date in mid-2022. 

© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.