Did Cannabis Legalization Help Canadian Stocks?

October 21, 2021

TESTSTSARDSAR

Did Cannabis Legalization Help Canadian Stocks? by Johnny Green

Canada is one of just two countries that have legalized cannabis for adult use. The other country is Uruguay.

Unlike Uruguay, Canada’s legalization model allows for sales to tourists. Canada is also home to a thriving cannabis export market.

As the only G-7 country to have legalized cannabis for adult-use, Canada was looked at very closely by cannabis investors all over the globe.

Many Canadian cannabis companies offer stocks, with some having done so prior to legalization in 2018. Did legalization help those stocks?

Canadian Stocks Post-Legalization

A team of researchers in Canada and China recently teamed up to examine the effect of, if any, cannabis legalization on cannabis stock prices in Canada.

It is a common assumption that national legalization provided a huge boost to cannabis stock prices, however, it’s an assumption that had gone largely uninvestigated until now.

The study explored price data for ten cannabis stocks in Canada from 2015 to 2020. Prior to 2018 the companies focused on medical cannabis and after legalization transitioned to some degree towards the adult-use industry.

“The results of the comparative analysis indicate that the performance of the matched pairs is largely correlated over time. Additionally, the pre-legalization performance of cannabis companies was better than their post-legalization performance.” the researchers stated.

“Given that cannabis companies did not outperform their matched pair, we can confirm that legalization did not have a significantly positive effect on the industry. We can also infer that, from a stock market perspective, the legalization of recreational cannabis has been unsuccessful thus far. ” the researchers concluded.

Measuring Legalization Beyond Stock Prices

As the researchers indicated, legalization of adult-use cannabis has not been successful from a stock market perspective, at least from the perspective of the companies involved in the study.

However, that is a very limited measurement regarding the success or lack thereof when it comes to legalization in Canada.

Cannabis legalization has been a tremendous success from the standpoint of consumers and patients that were previously facing harsh penalties because of cannabis.

It’s also a tremendous success from the perspective of local governments and taxpayers that no longer have to see public resources wasted on a failed public policy.

Cannabis legalization in Canada is not perfect, and is still in need of improvement, however, it’s far better than complete prohibition, and that will also be the case in other countries that legalize cannabis in the future.

A link to your site, with your site's name and description as anchor text.





Also in Education

Owning Guns is a Constitutional Right, Unless You’re a Cannabis User

September 28, 2022

Take two of the most hot-button, tendentious issues of our time – cannabis use and gun rights – combine them, and now we really have a debate. As the law currently stands, medical cannabis patients are not afforded their 2nd amendment right to bear arms. Technically, all cannabis consumers are banned from buying guns, but only medical […]

The post Owning Guns is a Constitutional Right, Unless You’re a Cannabis User appeared first on Cannadelics.

Continue Reading

Cannabis policy changes in Africa are welcome. But small producers are the losers

September 28, 2022

TESTSTSARDSAR

Cannabis policy changes in Africa are welcome. But small producers are the losers by Clemence Rusenga

Cannabis is a drug crop with a long history in Africa. Alongside coca and opium poppy, it has been subjected to international control for nearly a century. The International Opium Convention of 1925 institutionalised the international control system and extended the scope of control to cannabis. In 1961 a new international convention was adopted to […]

A link to your site, with your site's name and description as anchor text.

Continue Reading

University of Sydney to Offer Free Cannabis Testing

September 27, 2022

TESTSTSARDSAR

University of Sydney to Offer Free Cannabis Testing by Johnny Green

The University of Sydney is launching a fairly robust study in an attempt to, as the university describes it, “investigate cannabis consumption, behaviours, and attitudes among users.” Part of the study involves offering free, anonymous cannabis testing for people that cultivate their own cannabis in the Australian Capital Territory (ACT). Cannabis was decriminalized in 2020 in the […]

A link to your site, with your site's name and description as anchor text.

Continue Reading