Pot stocks dive as Florida rejects legalization of recreational marijuana

Canopy Growth

06/11/2024 10:44

Nov 6 (Reuters) - A ballot measure to legalize the
recreational sale and use of marijuana in Florida failed to pass
late Tuesday, sending shares of pot companies into freefall and
dealing a blow to cannabis firms that had invested millions in
the legalization campaign.
    The passage of Amendment 3 would have legalized the sale of
marijuana for recreational use to adults 21 years of age and
older from medical marijuana treatment centers and other
state-licensed entities.
    The initiative received more than 55% of the votes in favor
but fell short of the 60% majority it needed to pass.
    Tilray Brands  TLRY.O  shares slid over 10% premarket, and
U.S.-listed shares of SNDL  SNDL.O  and Cronos Group  CRON.O 
fell 13% and 4%, respectively.
    Canopy Growth  CGC.O  was down over 20% and Aurora Cannabis
 ACB.O  dropped 9%. ETF AdvisorShares Pure US Cannabis  MSOS.P 
plunged 14.2%.
    Florida was touted as a very lucrative market, with
projections from cannabis analytics company Headset indicating
the Sunshine State could have seen $4.9 billion to $6.1 billion
in sales during the first year of implementation of adult-use
sales.
    Twenty-four U.S. states have so far legalized the
recreational use of cannabis, though it continues to be illegal
at the federal level. In 2016, Florida voters passed a
constitutional amendment allowing medical marijuana in the
state.
    Cannabis companies had a lot riding on the vote, with major
pot firms having made substantial contributions to Smart & Safe
Florida, the group advocating for the passage of Amendment 3. 
    Trulieve, which operates 156 stores in Florida and is the
largest player in the state, has made nearly $144.6 million in
contributions to the group since 2022.
    ATB Capital Markets analyst Frederico Gomes said if
marijuana use is reclassified as a less serious federal crime,
it could more than offset any effects of the failure to pass the
amendment. 

 (Reporting by Mrinalika Roy and Sourasis Bose in Bengaluru;
Editing by Abinaya Vijayaraghavan)
 ((mrinalika.roy@thomsonreuters.com;))