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There was a distinct whiff of marijuana floating above the stock exchange on Thursday as a clutch of pot stocks rose notably in price. This was an anticipatory reaction to the launch of an important new market.
Green Thumb Industries (GTBIF 12.04%) rocketed more than 12% higher, and Curaleaf (CURLF 4.62%) increased by nearly 5%. Over the border, Canadian companies Aurora Cannabis (ACB 6.55%) advanced by almost 7%, and SNDL (SNDL 3.02%) closed up 3%.
New York state is now open for recreational marijuana business. Appropriately enough, at 4:20 PM local time, a dispensary called Housing Works Cannabis Co. in Manhattan was to be the first retail outlet in the state to go live with such sales. This marks the launch of that all-important segment of the retail pot business in New York.
The knock-on effect for Curaleaf and Green Thumb is obvious, as both companies also have New York dispensaries — three for the former and two for the latter’s Rise brand — that will expand from selling only medical product. Investors are clearly pleased that the pair will barrel into the new year selling recreational goods in the huge and populous state.
While neither Aurora nor SNDL will benefit directly from the opening of the New York market, it’s a juicy and irresistible target for them when and if the U.S. government gets around to rescheduling (read: decriminalizing) cannabis. As foreign entities, they are currently barred from selling directly to American customers.
Like most states that have turned on the green light for recreational sales, New York is being cautious and incremental in these early days.
Although their dispensary counts seem low, Curaleaf and Green Thumb are actually prominent retailers due to the low number of total licenses. At any rate, the opening of this market is a good development for the broader weed industry, and investors were fully justified in their bullish reaction to the news.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Green Thumb Industries. The Motley Fool has a disclosure policy.
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