Lawmakers in Illinois have finally agreed to legalize the recreational use of marijuana in the state. After discussing the pros and cons of recreational usage of cannabis, the Illinois House and Senate voted in favor of legalizing marijuana on May 31, 2019. Illinois Governor, J.B. Pritzker lauded the move and promised to sign the bill.
Once the bill is signed into law, Illinois will become the 11th state in the United States to legalize the adult use of CBD products. Legal use of cannabis in Illinois is set to begin from Jan 1, 2020.
On the other hand, Delaware got a step closer toward establishing itself as one among the few weed-liberal states in the country. The House Revenue and Finance Committee voted in favor of a bill to legalize marijuana on Jun 4, 2019.
This development in Delaware is also being seen as a source of revenues for the state’s government. In the government-run arrangement, the state would collect 15% tax on marijuana sales. Licensing fees for cultivation and manufacturing of cannabis products will be another major source of income for the government.
Meanwhile, some experts are speculating that given the current trend, come 2022 and the whole of the United States would be free to toke recreationally.
Weed Sales to Go Through the Roof
The marijuana legislation in Illinois would allow any resident of the state above the age of 21 to possess the novelty item. Age-eligible Illinoisans would be able to possess about 30 grams of cannabis flower as well as 5 grams of cannabis concentrates, the likes of which include hash oil. Moreover, every individual would also be allowed to carry about half a gram of edible weed-infused products.
Now, why would merely one state in America boost overall weed sales in the country? To answer that question, we must take into consideration the fact that Illinois is the sixth-biggest state in the country in terms of population, home to 13 million people, which accounts for major chunk of America’s population.
Availability to such a huge market would make Illinois second only to California in the weed space. Furthermore, major players in the space will be looking forward to grabbing a piece of this market.
It is estimated that, Illinois will add $1.6 billion every year in revenues from sales of recreational weed. Factoring in Illinois’ medicinal marijuana industry, one could see sales figures exceeding $3 billion a year. Governor Pritzker estimates that overall this move would rake in $170 million for Illinois in the first year itself.
Current players in the marijuana industry like Cronos Group CRON, Aurora Cannabis Inc. ACB, Innovative Industrial Properties, Inc. IIPR and Canopy Growth CGC have posted excellent year-to-date returns of 51.4%, 51.5%, 99.6% and 53.9%, respectively. Aurora, Innovative Industrial and Canopy possess a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The United States is witnessing a “weed-revolution” of sorts lately. A series of legal pot shops have opened on the east coast. Numerous marijuana IPOs and retailing of weed through pharmacies like the Walgreens WBA and CVS CVS are other encouraging signs for the sector. Now, state governments have stepped up the weed game. The latest to join the ranks of weed-tolerant states is Illinois.
The cannabis legislation bill in Illinois is touted to be a major source of income for the state governments. Furthermore, the likes of Cresco Labs, headquartered in Illinois have been continuously expanding and looking to increase its workforce. This being just one of the many cannabis companies in the state, we are looking at significant job creation in the near term.
Further, demand for novelty CBD products has been on the rise over the past few years. Cowen COWN estimates that the cannabis market in the United States will grow to $16 billion by 2025. Investors looking for strong gains should look no further than America’s weed industry.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Cowen Group, Inc. (COWN) : Free Stock Analysis Report
Walgreens Boots Alliance, Inc. (WBA) : Free Stock Analysis Report
CVS Health Corporation (CVS) : Free Stock Analysis Report
Innovative Industrial Properties, Inc. (IIPR) : Free Stock Analysis Report
Canopy Growth Corporation (CGC) : Free Stock Analysis Report
Cronos Group Inc. (CRON) : Free Stock Analysis Report
Aurora Cannabis Inc. (ACB) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research