There’s a lot of information available about the advantages of using cannabis. As a result, more people and governments across the world are warming up to cannabis. Legalization has become a hot topic among presidential nominees before the 2020 US presidential election. Currently, cannabis isn’t legal at the federal level in the US. While 33 states have legalized medical marijuana, 11 states have legalized recreational or adult-use cannabis. Will New Mexico become the 12th state to legalize recreational cannabis?
Cannabis legalization in New Mexico
In 2007, New Mexico was the 12th state to legalize medical cannabis in the US. The state also decriminalized the possession of a small quantity of marijuana for personal use from July 1. However, New Mexico hasn’t legalized cannabis for recreational use.
New Mexico’s House of Representatives passed the bill to legalize recreational cannabis in March. However, the Senate stalled the bill. New Mexico Governor Michelle Lujan Grisham formed a group to work on marijuana legalization in June. On Wednesday, the working group presented its recommendations for state lawmakers to develop a roadmap for legalizing cannabis during the next legislative sessions, according to a report from the Albuquerque Journal.
According to the report, the recommendations covered broad topics like the tax rate, licensing authority, testing requirement, using tax revenues, and local governments’ role. The working group recommended an average tax rate of 17%. Meanwhile, the group proposed state-level licensing, while the local government will determine dispensaries’ locations. The group proposed using the revenues collected from taxes to subsidize the state’s medical cannabis program.
Nora Meyers, the governor’s spokeswoman, said, “The governor will be reviewing the recommendations, and the next steps will be to incorporate the recommendations of this working group into balanced legislation and working to win the support of legislators and stakeholders ahead of the session.”
However, the report said that the bill could face challenges. Recently, senators struck down similar proposals.
Weakness in the cannabis sector
So far, 2019 has been tough for the cannabis sector. The ETFMG Alternative Harvest ETF (MJ) and the Horizons Marijuana Life Sciences Index ETF (HMMJ) have fallen 22.4% and 26.0%, respectively. During the same period, the S&P 500 Index has increased 19.3%. Wider-than-expected operating losses, regulatory scandals, vaping-related deaths, and the expectation of slower revenue growth in the second half of 2019 led to a fall in marijuana companies’ stock prices.
Aphria beat analysts’ estimates in the fourth quarter of fiscal 2019 and the first quarter of fiscal 2020. Despite the impressive performance, the company delivered negative returns. Weakness in the sector appears to have brought Aphria stock down.
The lower-than-expected fourth-quarter revenues and analysts’ downgrades dragged Aurora Cannabis stock down. However, the company is getting ready for Cannabis 2.0 to drive its growth. To learn more, read Cannabis 2.0: Aurora’s Focus on Edibles.
Canopy Growth stock fell due to its dismal first-quarter performance and subsequent downgrades from Jefferies and Bank of America. However, the company continues to expand its CBD business. Recently, Canopy Growth acquired a majority stake in BioSteel Sports Nutrition.
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