Many U.S. states are heading toward legalizing the sale of recreational cannabis. Last month, New Jersey took steps toward its legalization of cannabis, and it is expected that other states, including New York, Maryland, and Pennsylvania, would follow suit. However, some states that legalized recreational marijuana 10 years ago are now researching the public health implications of various new high-potency products amid questions about a potential connection to psychosis. According to the National Institute on Drug Abuse director, Dr. Nora Volkow, “We are seeing a very significant rise in psychosis associated with the consumption of marijuana.”
According to BTIG analyst Camilo Lyon, “Cannabis, with its many federal and state regulatory restrictions still in place, has been driven into a recession by slow-moving policy changes.” Even though the perspective toward cannabis is becoming more permissive and appealing across the country due to the product’s effective remedies and therapeutic and wellness applications, partisan gridlock in Congress has virtually ensured that legislation to decriminalize marijuana will die in the U.S. Senate.
Given this backdrop, we think it could be wise to avoid cannabis stocks HEXO Corp. (HEXO – Get Rating), Neptune Wellness Solutions Inc. (NEPT – Get Rating), and Clever Leaves Holdings Inc. (CLVR – Get Rating), which are down more than 55% in price year-to-date.
