With the US election finally decided, one of the clear winners is the medical cannabis sector. While a Blue Wave would have been the best result for the sector with a potential full legalization of cannabis in the US, the industry has benefited from the election result. In five different States, ballot initiatives to legalize medical and/or recreational cannabis were passed. Most significantly, New Jersey legalized adult-use cannabis which is expected to create a domino effect in neighbouring States and the heavily populated eastern seaboard.
Nawan Butt, Portfolio Manager of The Medical Cannabis and Wellness UCITS ETF, said: “The outlook for cannabis is looking increasingly positive. The outcome of the US elections is now expected to further increase medical legal jurisdictions in the US for cannabis. There are also developments around the world that illustrate the growing demand for medical cannabis, and how it is becoming more mainstream. This is a very exciting time for the legal medical cannabis industry.”
As momentum in this sector increases in the US, the stage is set for the rest of the world to follow in the path of medical cannabis legalization. Share prices have reacted positively to these developments but there is still tremendous upside, and we believe this is one of the more exciting growth opportunities across sectors.
Other positive developments around the world for the legal medical cannabis industry:
Germany hit a symbolic milestone for medical cannabis activity in September, with over 100,000 patients applying for reimbursement from their insurers since the start of the medical cannabis program in early 2017 (1). Although this number does not include all medical cannabis prescriptions, it does provide insight into the growth of the medical cannabis programme in Germany, which has been fairly stable since its inception. In the second quarter of 2020, total reimbursements reached 36.7M Euros, setting Germany a run-rate of roughly 150M Euros in sales, and a 24% increase in year over year sales (2).