Despite nearly eight months of declining value, cannabis stocks have a lot to look forward to. For one thing, the long-awaited “Cannabis 2.0” is about to come into affect, which could start positively affecting revenues around Q2 2020.
Perhaps even more exciting, legislators in the US have begun taking tangible steps towards legalizing recreational cannabis nationwide. The SAFE Banking Act—which would allow banks to engage in financial transactions with cannabis companies—recently passed the House of Representatives. Next step: the Senate.
On top of that, last week, the House Judiciary Committee approved the MORE Act. The Marijuana Opportunity, Reinvestment, and Expungement Act is now the first marijuana legalization bill to ever pass a House committee.
While there’s still a long road ahead, this is a serious milestone towards federal legislation. More than that, both MORE and SAFE speak to a normalization of cannabis enterprise. The industry has gone from an illegal market to a niche market and now is entering the mainstream. And that’s great news for cannabis stocks.
Nowhere is this normalization of cannabis enterprise more visible than in the growing popularity of cannabis cafes and lounges.
Cannabis Cafes: Where Everybody Knows Your Strain
Forbes contributor Nick Kovacevich writes that “as cannabis becomes more widely used, consumers are going to want public places to consume it.”
Many consumers turn to cannabis—particularly THC-based products—for social experiences. That’s why, across the US and Canada, dozens of spots have opened up where people can buy and consume cannabis the way they would with coffee or alcohol.
San Francisco and Las Angeles have been leading the way for cannabis lounges, but plenty of other places are following suit. Massachusetts, Oregon, and New Mexico are all exploring public cannabis consumption laws, while several Canadian cities already have them. A city councilor in Edmonton, Alberta, recently told Global News:
“If it’s a legitimate product, then we have to see it consumed responsibly. Cannabis lounges are going to come. This is an opportunity to talk about how we can grow some business in town.”
Mark Goliger, CEO of Canadian cannabis stock National Access Cannabis, now doing business as Meta Growth (TSXV:META), called lounges “the logical next step of how people will want to socialize around cannabis.”
LA alone has granted 16 licenses for cannabis cafes, half of which are solely for edibles. West Hollywood alone will soon have more than double the number of cafes and lounges of any other city, and chefs there will be allowed to infuse cannabis into menu items for onsite customers at new restaurants.
For investors who’ve been looking for the payoff of the cannabis revolution: this is it.
Cannabis Stocks Investing in Cafes and Lounges
Right now, Planet 13 Holdings Inc. (CSE:PLTH) (OTCQX:PLNHF) is making the most exciting moves by creating a “cannabis themed complex” in Las Vegas. On top of this, last month, it received all the necessary licenses to open up Rickety Cricket Café (a cafe/pizzeria) and Purc Coffee Shop.
According to Larry Scheffler, Co-CEO of Planet 13:
“Planet 13 gives Las Vegas visitors the ability to shop, eat, and recreate all in one luxurious cannabis-themed complex. The 3,000-plus visitors that walk into the Planet 13 Cannabis Entertainment Complex every day will now have the option to enjoy a coffee, delicious food, and walk across the hall to experience the best cannabis dispensary in the world.”
Another cannabis stock making a serious play in cafes is Green Thumb Industries (CSE:GTII) (OTCQX:GTBIF). It was one of the companies to receive a license for a cannabis lounge in West Hollywood.
This lounge represents a partial fruition from its $290 million acquisition of Essence Cannabis Dispensary. Through Essance, Green Thumb now holds a property in each of the 13 billion-dollar-plus cannabis markets in the US. What’s more, Essence Founder and CEO Armen Yemenidjian says he hopes to expand cannabis lounges to more markets.
While there are some detractors for cannabis cafes, the need for public spaces where people can socially (and responsibly) consume cannabis is apparent. These cafes have the potential to seriously drive revenue for cannabis stocks.
Even better, they will contribute to pot becoming a mainstream, widely-enjoyed commodity.
Featured image: DepositPhotos © AChubykin