(NEW YORK)—Research firm sees opportunities as cannabis stocks take hit as White House hints at stricter policy attitude towards marijuana legalization.
Cannabis stocks saw a sharp pullback last week when online news site BuzzFeed reported that the Trump Administration is engaged in a “secret war on weed.” The reported stated that the Marijuana Policy Coordination Committee told multiple federal agencies to submit data demonstrating the most significant negative trends about marijuana use.
The goal appeared to be to try to prevent further support for relaxing federal anti-marijuana laws, but this move may already be producing blow-back from even the strongest supporters of the President.
This sudden change in marijuana policy is coming from the Office of National Drug Control Policy (ONDCP), and not actually from Trump himself. No matter your opinion of the current President it is very clear that a vast majority of his supporters, even in the reddest of states, have changed their attitude when it comes to legalization of marijuana, and CBD products.
In note to subscribers Ludlow Research highlighted, “It would be political suicide for the President, and his Administration, to come out against marijuana legalization as this would alienate a large segment of his political base. For that reason we don’t see this change in marijuana policy going much further as political backlash is already growing from the mere suggestion of it.”
Change in Congress
Another bullish factor that could make this an opportunity to buy into the cannabis sector is possible change of leadership in the House of Representatives in this upcoming November election.
Over the past few years a large number of Republicans have changed their stance on legalization, and together with Democrats they could easily votes to pass through protections for current state marijuana policies, and open to the door for even further protections on Federal level.
The one issue that’s been stopping this has been having bills coming up to the floor for votes. If Democrats can take control of the House they will have stronger footing to introduce bills, with bipartisan Republican support, to get in front of the President to sign into law.
Are there risks currently in cannabis stocks to this sudden policy change? Yes, absolutely! But the political backlash from his base could prove to be something the President just can’t take on going into 2020 election season, and for this reason cannabis stocks may be looking like good entry point after their recent pull-back.
Cannabis Stocks to Watch
Ludlow Research has placed these particular cannabis plays on their watch list for possible strong rebounds after selling off sharply on the policy shift news.
– India Globalization Capital (NYSE:IGC)
– Cronos Group (NASDAQ:CRON)
– CV Sciences (OTCQB:CVSI)
– ChineseInvestors.com (OTCQB:CIIX).
Ludlow Research has also highlighted some smaller plays that could also benefit from any cannabis rally such as SinglePoint (OTCQB:SING), and AppSwarm (OTCMKTS:SWRM), which are both developing a joint venture Last Mile delivery platform for the cannabis industry.
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Ludlow Research is a New York based equity research firm that focuses on providing research coverage and investor awareness services to emerging small-cap companies. For over 12 years we have worked to provide our readers with a simple way of evaluating the current and potential value of small-cap companies, while garnering these clients greater market awareness to new investors. For more information please visit www.ludlowresearch.com
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