Pot stocks dive as Florida rejects legalization of recreational marijuana (updated)

Canopy Growth

06/11/2024 15:55

(Updates shares, recasts)
       Nov 6 (Reuters) - Shares of pot companies slid on
Wednesday after a ballot measure to legalize the recreational
use of marijuana in Florida failed to get the required majority
to pass, even as the firms invested millions in a campaign to
tap the lucrative market.
    Toronto-listed shares of Canopy Growth  WEED.TO  and
Trulieve Cannabis  TRUL.CD  tumbled 20.4% and 44.2%,
respectively.
    Tilray Brands'  TLRY.O  shares declined more than 11%, while
the U.S.-listed shares of SNDL  SNDL.O  and Cronos Group
 CRON.O  fell 13.8% and 7.2%, respectively.
    ETF AdvisorShares Pure US Cannabis  MSOS.P  plunged 24.1%.
    Florida was touted as a very attractive market. An estimate
from cannabis analytics company Headset had indicated $4.9
billion to $6.1 billion in adult-use sales during the first year
of implementation.
    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 needed to pass.
    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.
    Major pot firms had made substantial contributions to Smart
& Safe Florida, the group advocating for the passage of
Amendment 3. 
    The focus now shifts to efforts to reclassify marijuana use
as a less serious federal offence. President-elect Donald Trump
has also publicly supported marijuana reforms and legislations
in the months leading up to the election.
    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 and Sriraj Kalluvila)
 ((mrinalika.roy@thomsonreuters.com;))