The gradual regulation of recreational marijuana across North America continues to open opportunities for CannaRoyalty, as the firm’s stock spiked on 2018’s first day of trading.
Shares of CannaRoyalty (CSE:CRZ), an Ottawa-based holding firm that gives investors exposure to legalized cannabis markets, skyrocketed to all-time highs as California officially legalized adult use of recreational marijuana with the turn of the new year. The firm’s stock price was up as much as 37 per cent on the Canadian Securities Exchange on Tuesday, hitting a high of $5.10. It ended the day at $4.72, up 25.6 per cent
CannaRoyalty owns or invests in numerous California-based cannabis companies, including distributors, device manufacturers and producers of edibles. The firm cites analysts that say California already has the world’s biggest cannabis market, valued at $2.8 billion in 2016. With recreational legalization, some expect that number to rise to $5.2 billion later this year.
CannaRoyalty occupies a strategic position in North America’s emerging legal cannabis market. Since marijuana remains federally illegal in the U.S., banks generally won’t touch companies that work with the substance, making CannaRoyalty one of the few options for investors to get involved in the growing market.
“January 1st marked the transition of the largest and most sophisticated cannabis market globally into a recreational adult-use market and CannaRoyalty is strongly positioned to benefit as this market grows over the next five years,” said Marc Lustig, CEO of CannaRoyalty, in a statement about California’s move to legalization.
He continued, saying that “2018 is an exciting year for California and because CannaRoyalty is one of the best avenues for public market investors to gain exposure to the state, we expect it to be an exciting year for shareholders as well.”
Impending legalization north of the border has been a boon for Canadian cannabis firms. Smith Falls-based Canopy Growth (TSX:WEED) saw its shares soar towards the end of 2017, finishing December just below $30 after starting the month at $18. Other Canadian firms such as Aphria (TSX:APH) and Gatineau’s Hydropothecary (TSX:THCX) saw similar jumps.
Though the exact date has been a bit hazy, the federal government has maintained its July, 2018 goal for recreational cannabis legalization in Canada.