When you pair a political issue with a presidential election, you get a stock sector to watch.
In a recent breakdown of how investors should approach the rapidly approaching 2020 election, Action Alerts PLUS senior analyst Jeff Marks suggested Wall Street keep a close eye on cannabis stocks heading into the globally anticipated result.
The cannabis sector has been a subject of love, hate and volatility as investors question the potential of state and federal legalization of recreational marijuana. Legal marijuana usage, whether recreational or medical, is on the ballot in Arizona, New Jersey, South Dakota, Montana and Mississippi.
Marks said a Democratic sweep and a Biden win could have huge implications for cannabis stocks.
“If we do see a Democratic sweep, you could have an easier regulatory environment, and that could set the stage up for, in the years to come, for a potential legalization at the federal level. And that's really what would need to happen to really see this sector light up, so to speak. So I think if you're on the lookout for a cannabis stock, and again, these are probably more so good for high-risk tolerance retail investors. One would be Canopy Growth Corporation as a consumer goods play. They have the tie-in with Constellation Brands or GrowGeneration Corp which is essentially the Home Depot of growing cannabis,” Marks said.
While Marks didn’t suggest adding a cannabis stock to your portfolio, a blue wave could leave the opportunity to make a little green in the cannabis sector in the years ahead.
