Political winds are blowing in favor of cannabis companies.
New York Governor Andrew Cuomo plans to urge state lawmakers during his budget address to legalize recreational marijuana. A spokesman for the governor told NBC News that “we’re drafting legislation” when asked about decriminalization.
READ: Crop says farm bill legalizing industrial hemp is within 'hair’s breadth' of becoming law after US Senate passage
Marijuana companies are also getting help on the federal level. US senators voted 87-13 on Tuesday to approve an $867 billion farm bill that includes a provision legalizing industrial hemp. A House of Representatives vote is expected this week.
Hemp is a source of cannabidiol, which is used as an alternative treatment of epilepsy, Alzheimer’s and other neurological disorders. Beverages made with cannabidiol are promoted as pain relievers while lacking psychoactive properties.
Currently, 40 states oversee hemp cultivation “pilot programs” for industrial and commercial purposes.
The legalization of hemp … will blow off the political barn doors that have been restricting our industry,” Crop Infrastructure Corp (CNSX:CROP) (OTCMKTS:CRXPF) CEO Michael Yorke said in a statement Wednesday.
The Vancouver-based company provides financing for land expansion and greenhouses as well as help with branding. Its shares climbed C$0.41, or 9.3%, to C$0.41 in Canadian trading and 9.5%, or US$0.03, to US$0.31 on the OTC Markets.
Cannabidiol outlook
York expects cannabidiol to grow into a C$22 billion industry by 2022.
The expected push in New York follows a Nov. 6 Election Day bonanza in which Michigan became the 10th state to allow recreational use of marijuana while measures to allow medical use of cannabis were passed in Missouri and Utah. A provision allowing recreational pot in North Dakota failed.
Canada beat Michigan to the punch several weeks earlier, legalizing recreational marijuana use by adults on Oct. 17.
Medical cannabis financier Redfund Capital Corp (CSE:LOAN) (OTCMKTS: PNNRF) said a couple of days after the US votes that the legalization of marijuana in three additional states was a milestone for the industry and its clients.
“The midterm elections are a positive sign to all of us that the United States will mainstream medical cannabis in the very near future,” CEO Meris Kott said in a statement. “We look forward to expanding into markets supporting these initiatives."
Silicon Valley client
Vancouver-based Redfund’s clients include Biolog Inc, a Silicon Valley company that is advancing a technology to add cannabis to food and beverages, and RxMM Health Care, a company in Irvine, California, whose products including a treatment for Alzheimer’s.
Redfund gained 1.8%, or C$0.01, to C$0.29 in Wednesday’s Canadian trading.
Meanwhile, Smiths Falls, Ontario-based Canopy Growth Corp (TSX:WEED) (NYSE:CGC) is the “best way” to play the Canadian cannabis market, said Jim Cramer, the CNBC stock picker. he prefers the company to Toronto-based Cronos Group Inc (NYSE:CGC) (NASDAQ:CRON), which recently attracted a US$1.8 billion investment from the tobacco giant Altria Group (NYSE:MO).
Canopy Growth fell 2.7%, or US$0.91, to US$32.23 in Wednesday’s New York Stock Exchange trading. Cronos was down 4.3%, or US$0.56, to US$12.26.
--Ellen Kelleher and Katie Lewis contributed to this report--