All eyes are on New Jersey’s legislature today.
New Jersey is on the verge of becoming the latest state to legalize marijuana.
In the Seed Investor’s view, it’s both a big deal and a not so big deal.
New Jersey: Still A Long Road To Legalization
Finance committees for the state’s Assembly (lower house) and Senate (upper house) are holding a joint committee session to review up to four separate marijuana legalization bills.
The bills cover every aspect of a legalizing marijuana including tax rates, regulatory structure, and the treatment of past marijuana-related criminal convictions.
There will surely be tweaks around the edges of the bills, but the key will be the complete legalization of recreational use marijuana.
After these sessions, the bills go to the full Assembly and Senate to be approved.
Then the governor must sign them into law.
All of that is highly probably.
The legislature is overwhelmingly supportive of legalization and the newly elected governor promised during his campaign he would approve legalization.
Basically, New Jersey is going to legalize marijuana, they’re just working out the details.
Based on previous history of other states, New Jersey’s legalization would likely go into effect in early 2020.
So what’s that mean for marijuana investors?
Is it time to get excited and plow into marijuana stocks with a New Jersey footprint?
The Seed Investor’s answer is both yes and no.
Trickles And Waterfalls
New Jersey is just a small player in the grand scheme of the U.S. marijuana legalization.
Yes, the state and its nine million residents will have access to legal marijuana and will eventually grow to generate $2 to $3 billion in sales per year.
That’s nothing overwhelming. But it sure doesn’t hurt.
The important part of this story is actually in New York.
New York politicians have cited New Jersey’s legalization as a reason to go ahead and legalize marijuana in New York as well.
It makes sense.
New York is going to legalize recreational use marijuana at some point and, with New Jersey legalizing it, the costs of waiting are only going to rise.
And in the big picture, New York marijuana legalization is one of the next major milestones for getting marijuana bull market raging again.
In the end, it’s good to have trickles like New Jersey. But we’re going to have to see action in New York, Florida, or at the federal level to create a big enough waterfall to ignite one more major industry-wide run in marijuana stocks.
Image Source: WHYY