When Legalization Comes, This Cannabis Leader Will Soar Even Further

The "green wave" of cannabis legalization could soon get a boost from the federal government...

Last week, Democrats Jon Ossoff and Raphael Warnock won a pair of runoff races to represent Georgia in the U.S. Senate. These two races mean that the Senate will be split right down the middle (50 Democrats and 50 Republicans).

The vice president will be the decider in any tied vote. And since Democrats control the White House – and therefore the vice presidency – they essentially have control of the Senate. They also have control of the House of Representatives.

With the control of Congress and the White House, Democrats hold great power to advance policy initiatives. One likely effect is increased government spending. But this new political reality has also been benefiting a specific group of stocks in the past few days...

Cannabis stocks.

Companies that sell marijuana have soared as Democrats prepare to take control of the Senate. The reasoning is simple – Democrats are more in favor of relaxing or removing federal restrictions on cannabis.

Our colleague and Cannabis Capitalist editor Thomas Carroll said that the Georgia runoff results were the "best-case scenario for cannabis policy." And the House already voted on a bill to federally decriminalize marijuana last month.

Many states aren't waiting for federal blessing to authorize, regulate, or reduce penalties for marijuana use. Already, 36 states and Washington, D.C. have legalized medical marijuana. And 15 states plus Washington, D.C. have legalized marijuana for adult recreational use.

On Election Day, voters in several more states took steps toward joining their ranks. And New York Governor Andrew Cuomo recently said he would add legalized cannabis to his policy proposals, meaning one of the most populous U.S. states could soon join the "green wave."

Increased legalization will only continue from here. And today's company is leading the way...

Curaleaf (OTC: CURL.F) is the largest pure-play cannabis company in the U.S.

It operates 96 dispensaries and 23 cultivating sites in 23 states across the country. The company says that it specifically focuses on highly populated states that only give out a limited number of cannabis licenses.

These 23 states account for $14 billion in annual retail cannabis revenue. That's about 85% of the total U.S. market. While Curaleaf has operations all over the country, its strongest presence is on the East Coast.

Since going public in 2018, Curaleaf has bought 14 different competitors. Just this past year, the company has expanded its massive footprint through three acquisitions. And its acquisition of Alternative Therapies, a cannabis growing and processing firm, in November made it the only company in Massachusetts that's been approved for two cultivation facilities, two processing facilities, and three adult recreational-use dispensaries (the most allowed under state law).

Now, Curaleaf is the leading cannabis company in the U.S. It has the greatest or second-greatest market share in 11 of the states where it operates, and the third-greatest in four more states – California, Florida, Nevada, and Illinois.

As a result, its revenue dwarfs the competition. And it's on its way to becoming the first U.S. cannabis company with more than $1 billion in annual revenue.

Curaleaf's footprint is only going to grow from here. The company has licenses to open another 41 stores, which would increase its store count by 43%. As these stores open their doors, sales will soar.

And Curaleaf has a strong management team. It consists of senior leaders from the world of finance, consumer products, pharmaceuticals, and retail. These industries have direct parallels with the cannabis sector.

Curaleaf's shares are traded over-the-counter ("OTC") in the U.S. because its primary listing is on the Canadian Securities Exchange. That's common among American cannabis companies because the substance is already legal in Canada.

Not to mention, U.S. cannabis companies are operating in legal limbo. While federal officials haven't acted against legitimate companies for selling marijuana in compliance with state law, there's nothing preventing such action.

But these complications haven't stopped investors from buying in. Since the November elections, Curaleaf shares have surged more than 40%. And since the Senate makeup became clear last week, the stock is up another 7%.

But the gains should only continue from here...

Curaleaf is perfectly positioned to capitalize on the wave of legalized cannabis legislation sweeping its way across the U.S. And legalization will bring incredible growth to the sector. Curaleaf projects the U.S. market to grow to $33 billion by 2025, doubling from 2020. This should continue to support the company's growth, pushing shares higher.

Sometimes investing is simple.