American Weed: 2021 Review, 2022 Outlook
“Everybody must get stoned.” — Bob Dylan, Rainy Day Women #12 & 35
Bob Dylan released that song in 1966, when marijuana was a pariah in mainstream society. Since then, marijuana usage has become vastly more prevalent. In 2021, nearly half of Americans reported having used pot. Dylan didn’t win a Nobel Prize for nuthin.
As of this writing, marijuana is legal for medical use in 36 states and the District of Columbia, and for recreational use in 18 states and DC.
And yet, marijuana equities as a whole turned in a weak performance in 2021, as many ballyhooed companies overpromised and underdelivered. The operating results of high-profile cannabis bellwethers missed expectations, weighing on their share prices. The entire sector got caught in the downdraft.
However, as 2022 gets underway, many inherently strong pot stocks are on the bargain shelf, and they’re poised to explode on the upside as trends favorable to the marijuana industry unfold in 2022.
Also, if you chose wisely in 2021 (e.g., pinpointing a likely acquisition target), you reaped a huge windfall in the marijuana space. More about that, below.
In the meantime, marijuana legalization continued apace in 2021, laying the groundwork for further progress in the months ahead. Here’s a state-by-state and federal re-cap of the year in weed, with an outlook for 2022.
Gov. Kay Ivey (R) signed a bill in May to legalize medical marijuana, calling the reform an “important first step” in “a sensitive and emotional issue.”
The legislation requires patients to be diagnosed with one of about 20 conditions, including depression, anxiety, sleep disorders, post-traumatic stress disorder, and chronic pain.
State lawmakers passed two bills in 2021 to expand access to medical cannabis. Senate Bill 654 permits non-resident patients to legally access medical cannabis in Arkansas for up to 90 days.
Senate Bill 703 allows telehealth certifications for patients seeking medical marijuana access. Both laws took effect January 1, 2022.
The state in June enacted a law that allows possession of up to 1.5 ounces of marijuana and permits adults to cultivate cannabis at home. People under 18 can no longer be arrested for simple marijuana possession, and those between 18 and 20 who possess small amounts of cannabis can only be punished by a $50 civil fine.
Gov. John Bel Edwards (D) signed a marijuana decriminalization bill into law in June. The change reduced penalties for possession of up to 14 grams of cannabis to a $100 fine. Louisiana also adopted a bill to let registered medical marijuana patients legally smoke whole-plant cannabis.
Voters passed a pair of initiatives legalizing the adult-use market in November 2020. Licensed retailers began providing marijuana products to adults on January 1, 2022.
Under a new law that took effect in June, adults 21 and older can possess up to two ounces of cannabis, 16 grams of cannabis concentrates and 800 milligrams of infused edibles. Adults can grow up to six mature cannabis plants at home for personal use, while licensed retail sales must begin by April 1, 2022.
After several failed attempts, New York lawmakers in March finally got a reform bill signed into law. The bill’s passage removes penalties for possession of up to three ounces of marijuana or 24 grams of cannabis concentrates. Adults are now allowed to grow cannabis at home for personal use.
The law also requires automatic expungement for marijuana-related activity made legal under the legislation.
Virginia lawmakers passed a marijuana legalization package in March that allows public possession of up to one ounce of cannabis by adults over 21; personal cultivation of up to four plants at home; and private sharing of up to an ounce of marijuana between adults.
All records of misdemeanor possession with intent to distribute marijuana arrests, charges, and convictions will be automatically sealed from public view in the Virginia State Police’s systems.
- Schumer steps in.
Senate Majority Leader Chuck Schumer (D-NY) and congressional colleagues in July unveiled a landmark marijuana legalization bill called the Cannabis Administration and Opportunity Act (CAOA). See the following tweet:
CAOA would federally deschedule cannabis, expunge prior convictions, allow people to petition for resentencing, maintain the authority of states to set their own marijuana policies, and remove collateral consequences like immigration-related penalties for people who’ve been criminalized over the plant.
The bill also would impose a federal tax on marijuana products. Schumer has promised that CAOA will be a top priority in 2022.
- MORE moves forward.
In September, the House Judiciary committee approved a comprehensive bill to federally legalize marijuana. Called the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, it stands an excellent chance of passage in 2022.
Among other things, MORE would federally deschedule cannabis and expunge the records of those with previous marijuana convictions.
2022: The Year Ahead
Efforts to dismantle the now-discredited War on Drugs are slated to continue at both the state and federal levels in 2022.
Already In more than a dozen states, activists have filed or are paving the way for ballot initiatives on cannabis.
Medical or adult-use marijuana legalization is likely to land on the 2022 ballot in Arkansas, Florida, Idaho, Missouri, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Dakota, and Wyoming.
Mergers and acquisitions (M&As) among canna-businesses reached a torrid pace in 2021, providing opportunities for proactive investors. I expect M&A activity to continue at a rapid clip in 2022.
A shrewd tactic is to unearth marijuana companies on a probable path to M&A activity and invest in them before the news becomes official, to profit from their future momentum.
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John Persinos is the editorial director of Investing Daily. To subscribe to John’s video channel, follow this link.