Investors React Optimistically As Cuomo Promises to Legalize Recreational Marijuana in New York

andrew cuomo

Several cannabis stocks saw share prices increase in today’s trading session as a number of developments in the United States came to light.

The release of the final 2018 Farm Bill legalizing Hemp on a federal level was one of the two major news announcements, with the other being that New York’s Governor Andrew Cuomo is supposedly planning to introduce legislation that would legalize recreational cannabis in 2019 across the state.

The governor’s aides have said that they will likely be introducing a legislative framework to legalize recreational marijuana during the next executive budget, a decision that comes after Cuomo created a 20-man team to begin drafting what a potential cannabis regulation would look like.

The goal of this administration is to create a model program for regulated adult-use cannabis – and the best way to do that is to ensure our final proposal captures the views of everyday New Yorkers,” said spokesman Tyrone Stevens according to The New York Post. “That’s why Governor Cuomo launched 17 listening sessions in cities across the state to give every community in every corner of New York the opportunity to be heard. Now that the listening sessions have concluded, the working group has begun accessing and reviewing the feedback we received and we expect to introduce a formal comprehensive proposal early in the 2019 legislation session.”

Many in the state have expressed optimism for legalizing recreational cannabis, with many communities across the state getting surveyed regarding their opinions on a potential legalization proposal. These new regulations could also potential expunge the records of New Yorkers that were arrested for possessing marijuana in the past.

The law ought to allow smoking of cannabis, with rules similar to limits on where you can smoke tobacco – but not necessarily the same,” added Assemblyman Richard Gottfried. “We probably wouldn’t allow smoking cannabis out in public, but might allow it in some establishments. The health questions about smoking cannabis are nothing like problems with tobacco, in part because no one would smoke a comparable quantity.”

The Democrat-controlled state Senate, which largely supports a potential legalization, would still need to contend with a variety of issues and detractors. Conservative Party Chairman Mike Long said that “legalization is going to ruin a lot of lives. People will become addicted and become involved in other drugs. Others will become impaired and end up in car accidents.” He added that he suspects cannabis would end up getting sold illegally to minors in a similar way alcohol is currently, adding sarcastically that “I guess it’s not a gateway drug anymore.”

The significance for investors is self-evident with the current market for medical marijuana (which was legalized in the state back in 2014) seeing a 128 percent growth in patients last year from 37,000 to 65,446. The potential for recreational use would be exponentially bigger, with some studies arguing that New York could be a $3.1 billion cannabis market in the future while also bringing in $436 million and $336 million respectively in state and city taxes.

The largest winners from today’s news announcements were Canopy Growth Corp (TSE: WEED) and Aurora Cannabis Inc (TSE: ACB)(NYSE: ACB), which closed the day up 7 and 3 percent respectively. While legalization still remains a distant possibility for now, it’s one that many in the industry are anticipating eagerly.