Cannabis stocks experienced a surge on Tuesday as Pennsylvania Governor Josh Shapiro expressed support for the legalization of adult-use cannabis in the state. Governor Shapiro believes that this move could potentially generate $250 million in tax revenue. As part of the upcoming budget set to begin on July 1, he has proposed the establishment of legal cannabis businesses by the state legislature.
If Pennsylvania proceeds with this plan, it will become the 25th state in the US to allow adults aged 21 and above to purchase cannabis legally. Governor Shapiro emphasized the need for Pennsylvania to keep up with neighboring states like New York, New Jersey, and Ohio, which already have legal cannabis programs. According to him, Pennsylvania is missing out on crucial revenue and opportunities by not embracing the industry.
The news of Governor Shapiro's proposal has resulted in a positive market response, reflected in the performance of various cannabis stocks. The AdvisorShares U.S. Cannabis ETF MSOS surged by 5.9%, Curaleaf Holdings Inc. rose by 6.1%, Tilray Brands Inc. increased by 7.7%, Green Thumb Industries moved up by 5.3%, Trulieve Cannabis Corp. rose by 6.1%, Verano Holdings Corp. experienced a 3.08% increase, and TerrAscend saw a 4.63% rise.
Governor Shapiro estimates that once the adult-use cannabis industry is fully operational, it will contribute an additional $250 million in revenue for Pennsylvania. However, it remains uncertain whether the state legislature will proceed with the proposal.
In other positive news for the cannabis sector, Germany's Traffic Light Coalition has reached an agreement on cannabis legalization. A vote on this matter is expected later this month, and if approved, Germany may legalize cannabis as early as April. This development would be beneficial for several North American cannabis companies that have operations in Germany.