What is a Marijuana Stock?
It’s almost certain that the cannabis referendum will likely lead to some form of legalization of the drug. As such, the country is currently witnessing the emergence of trends found in other countries that have legalized either the medicinal or recreational use. Marijuana stocks are one of those trends.
In these countries, the government issues cultivation licenses of sort to companies to grow cannabis for research and consumption. Many of these companies have chosen to use public offerings to raise money for their cannabis R&D and distribution projects.
Currently in New Zealand, over 10 top cannabis companies have put out marijuana stocks, offering shares of their profits to members of the public who invest in them.
These companies are confident that cannabis trade will be legalized in some form after the referendum, and they’re already putting facilities on ground to gear up for legalization. Some of them have already secured state-issued licenses, but none yet will be given the legal green light to go full-swing until the laws are passed.
Marijuana stocks are currently hot cakes for investors at the moment, if we’re to go by what we’ve seen in the moments leading up to legalization in other parts of world. Cannabis stocks in North America were on a meteoric rise a few years prior to legalization in Canada and various states in the U.S, although the frenzy seems to have waned in recent times.
How Can Marijuana Stocks be Traded When They are Illegal in NZ?
First of all, let’s look into the background of the matter. The Misuse of Drugs Act of 1975 still subsists, and it stipulates a three-month imprisonment or a $500 fine as penalty for anyone caught with possession of any amount, up to seven years for growers, and eight years for sellers. Even worse, the Act classifies cannabis oil and hashish as class-B controlled drugs, together with opium, MDMA, and morphine, with punishment for dealers and growers as high as a 14-year imprisonment.
Now, in the wake of mounting evidence that refutes the rationale behind punitive cannabis regulations, public opinion has increasingly shifted grounds in favor of the drug use. Policymakers have been struggling to maintain the status quo, and have had to reconsider their policy stance. These trends, which will soon culminate in a referendum where everyone has a say on legalization, have continually paved the way for people to engage in the cultivation and trade of the drug.
Recently, the Medicinal Cannabis Amendment Act was passed, followed shortly by the announcement of a cannabis referendum in 2020. The new law gives the legal green light for patients with terminal and chronic diseases to consume the drug.
As noted earlier, some companies have already secured state-issued licenses to cultivate and produce the drug in NZ, though they don’t have the full backing of the law. Many of these licensed companies have chosen to raise money for their projects from the public by listing marijuana stocks on New Zealand’s stock exchange.
However, if the referendum does not lead to legalization of medical or recreational use, these companies may soon run out of luck.
The Biggest Marijuana Stocks in New Zealand
The Waikato-based company was the first to secure a listing on the NZX in 2019. Run by a team of seasoned pharmacists and businessmen in affiliation with the University of Waikato, the company has been licensed since 2002 to cultivate, process, extract, manufacture cannabis for research purposes.
- Hikurangi Cannabis:
With a license from the Ministry of Health to cultivate and research strains, Hikurangi is currently running cannabis operations in Gisborne on a massive scale. So far, the company has raised over $5 million through crowd-funded shares, with more public offerings in the pipeline.
- Helius Therapeutics:
Helius is younger than Hikurangi and Cannasouth. But with Rich-lister Guy Haddleton on board, the company has managed to secure more funding than the other two. The company has so far raised over $15 million from local investors, and has secured a license from the Ministry of Health to cultivate medicinal strains.
- Setek Therapeutics:
This Taupo-based company is run by an all-star board which includes former associate minister of health and statesman Peter Dunne. However, the company is yet to receive a license, but is hoping to do so in the next few months.