Pot stocks soar as Colorado opens for business

Other states are closely watching the impact of new marijuana law, and some may follow suit if all goes well.

By InvestorPlace Jan 2, 2014 1:24PM

Credit: © ideeone/E+/Getty Images
Caption: Hemp plantsBy Burke Speaker


Colorado's new law allowing the recreational use and sale of marijuana began Wednesday and amid the anticipation has come a boom in marijuana stocks.


Medical Marijuana (MJNA) is up 91% in the past five days, and Cannabis Science (CBIS) has more than doubled -- a pretty clear sign that marijuana stocks are feeling the love from Colorado's new law.


From The Washington Post:

"The first-in-the-nation law was greeted with long lines at retailers and a lot of 'Rocky Mountain High' jokes. But beyond the buzz, the measure represented the institution of a major new public policy in America -- one that opponents fear will turn the state into a dangerous land of debauchery and that backers hope sets a nationwide precedent.


If Colorado is able to successfully legalize marijuana without causing a social backlash, the tourism, tax and other considerations are likely to compel several other states to quickly follow suit."

Already, Alaska will likely put the issue in front of voters within the year, and supporters say they expect Oregon to see a vote after that. By 2016, advocates hope to see measures on the ballot in Arizona, California, Maine, Massachusetts, Montana and Nevada, according to The Post. After that there are rumblings of similar ballot measures in six other states.

The big winner -- states collecting taxes. Colorado is expected to reap some $200 million this year in marijuana taxes, with much of that going to education.


If other states put up similar ballots for voters who hear that Colorado didn't fall into ruin -- and instead making a windfall -- the measures may even force a federal review of marijuana laws.


For now, marijuana stocks are hoping to ride the wave of popularity all the way to the bank.


CBIS, for instance, was up more than 40% as of this writing. As HotStocked noted earlier:

"Traded volume exploded and 28 million share changed hands throughout the session which is seven times more than the average for the company. This drastic change in investors sentiment came just days after CBIS dropped to a new 52-week low of just $0.028 per share."

Of note, MJNA and CBIS are primarily involved on the medical side of marijuana, not recreational; still, traders and investors seem to believe in a larger potential out of what's happening in Colorado.


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69Comments
Jan 2, 2014 2:09PM
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- $200M in taxes

- time and money savings for police, courts, and jails to house smokers and dealers

- get the stuff off the streets and into shops owned/operated by law abiding Americans rather than going to gangs and cartels

 

I've never smoked a thing in my life. I saw what smoking cigs did to my grandma so it never was something that looked appealing to me. Frankly that was her choice though no matter how stupid it may have been. It is not the government's job to protect us from ourselves. And seriously drug laws work about as well as gun laws do which is not at all. Like I said, never smoked anything in my life (cigs or drugs), but ever since high school I could relatively quickly get pot if I wanted it. It is like any other vice (drinking, gambling, etc). You shouldn't legislate your idea of ethics because it doesn't work. Better to be legal and managed in the open responsibly than illegal where the thugs of the world (gangs, mobs, etc) can get rich.

Jan 2, 2014 1:37PM
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Good for Colorado and good for business. Now if we can just get the federal laws against hemp repealed we can really help grow the economy.
Jan 2, 2014 2:03PM
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They are penny stocks, go ahead, have a toke and buy 100,000 shares

Jan 2, 2014 3:17PM
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Recreational use is just the flashing light on the tip of the iceberg. The industrial and environmental hemp market is what will really take off if the plant is de-criminalized by the Federal Government. There are entire industries just waiting to utilize this hearty crop; textiles, bio-fuel, paper, building materials, plastics, cosmetics, insulation, foodstuffs and medicine (studies have shown it to have anti-cancer properties), just to name a few. 
Jan 2, 2014 2:32PM
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I wonder if Chong can sell his bongs in Colorado now. I smoked a lot of weed in my time and I can say it is better than alcohol. When I smoke, I'm mellow and tend to not drive like a fool. When I drink, I think I am Fast & Furious! Which now makes me wonder if you can smoke & drive legally in Colorado.
Jan 2, 2014 3:18PM
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Hmm... most people obviously miss the irony here.  Legalizing pot sales in order to make it taxable, THEN use the tax revenues generated to fund schools.

While teaching kids:  'Don't Do DRUGS'.

Jan 2, 2014 3:22PM
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So in Colorado you go and buy some legal pot for 4 times what the black market pot is selling for then you just keep the receipt and buy black market pot from now on. How is this going to be big business? ........ legal that is. 
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Haha, taxes going to schools! That's what they said about the lottery in Florida. It's all a joke just for the state to get more from you.

I can't wait to see what types of people you collect up there. This will be awesome.

Jan 3, 2014 5:30PM
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So, anyone over 18 can buy a version of an assault rifle and all the amo they want to enable them to go out and kill a bunch of people if they get mad and it is a constitutional right, yet the same people complain about selling an ounce of pot to people over 18. What a strange country.
Jan 2, 2014 5:44PM
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If we step back and observe, there is no aspect of our current structure geared to actually support an economy, it supports takers. The Federal Reserve and US Treasury work to create debt, the banks and Wall Street support markets. The markets support non-enterprise business platforms that support degrees administrative and executive personnel, none of whom actually "do" anything (paper & button pressing are not jobs, they are functions), at best they just delegate. They support deadbeats, lawyers, accountants, politicians, administrators and psychopaths.

The encouraging part is-- we are beginning to define the problem and the problem people. It will be a much easier task once they are the only ones in this stupid loop and the remaining majority can wipe them off the face of the Earth.

Terrorists deserve nothing better. 

Jan 4, 2014 11:03AM
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Great article! For more Marijuana Stock News, Updates, Charts, Videos, and Coverage check out http://marketmonitors.wordpress.com

This is a very hot industry right now. Poised to make billions and billions in the years to come. 
Jan 2, 2014 4:12PM
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When fundamental Christian conservative businessmen find out how much money is in weed and how much tax it will generate, look for those born hypocrits to jump in with both feet.

"I have had an epiphany from God that weed is God's true gift to mankind", or something like that to make it OK now, but before they saw the profit in it, it was a bad, bad devil's curse..

Typical BS of that FU group.

Jan 2, 2014 3:09PM
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It's a crying shame....THAT John Denver isn't still ALIVE; Peace JD.   V:)V:)V:)
Jan 2, 2014 3:17PM
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So stocks are legit, why do banks have a problem with monetary exchanges from marijuana sales . seems that both are federal entities .....


Jan 2, 2014 3:16PM
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Figured I would find all you over here at the Pot Shop.
Jan 2, 2014 6:31PM
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I doubt that anyone can control someone else's behavior in society when it come to what they want to smoke, pills, prescription pills, alcohol, etc. People can still buy cigarettes and booze to smoke at home or private area. 
Jan 2, 2014 5:22PM
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The stock MSN should have had in this story (since it's about recreational use) is Latteno Foods, (ticker: LATF). Up 100% at point today, when the DJIA is off 130 points. Flying High! (Yes, pun intended)
Jan 2, 2014 5:37PM
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A Texas Tweeker likes Latenno Foods.

That's a clear sign to stay away from that stock!

Everything in Texas and about Texas is repugnant!
Jan 2, 2014 6:39PM
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Lets get all private owned jails like the Republican want and then they can pick up these people and run them through, billing the tax payer, nice little cash flow for them.  Stop throwing people in jail for smoking it, we should be after the ones that sell it illegally.
Jan 2, 2014 5:03PM
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I totally in favor of legalizing pot, but the g-men saying the taxes are going to go to schools is BS:  I've heard that about casinos for years and my school taxes increase 4 time the rate of inflation every year.
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