Cannabis stocks have started to heat up once again as the buzz about potential legalization at the Federal level in the US kicks back into gear.
That Buzz has been sparked by plans in the U.S. House of Representatives to vote on a bill this week to federally legalize marijuana for the second time in history.
The Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, a bill sponsored by House Judiciary Committee Chairman Jerrold Nadler (D-NY), is the key focus. The MORE Act cleared the House in its last session but got stymied in the Senate, which was controlled by the GOP last time around.
However, as the power structure in Washington DC evolves, doors open. And this has cannabis investors getting genuinely excited once again.
The MORE Act essentially removes cannabis from the list of federally controlled substances, which opens the door for true federal legalization.
Stocks in the cannabis space – such as Village Farms International Inc. (Nasdaq:VFF), Canopy Growth Corp. (Nasdaq:CGC), Cronos Group Inc. (Nasdaq:CRON), NewAge Inc. (Nasdaq:NBEV), Cresco Labs Inc. (OTC US:CRLBF), and Trulieve Cannabis Corp. (OTC US:TCNNF) – have been on the move higher over recent days and could be lined up for more aggressive inflows if the legislative ball around the MORE Act keeps rolling past obstacles.
However, one stock that stands to potentially benefit disproportionately from buzz in the market around federal cannabis legalization is Cannabis Global Inc. (OTC US:CBGL), an emerging force in the marketplace with a growing product and proprietary intellectual property portfolio.
CBGL produces and markets the Comply Bag, an innovative solution for cannabis storage, transport, and tracking. It also has an interesting subsidiary, Natural Plant Extract (NPE), licensed in Southern California as a cannabis manufacturer and distributor. NPE licenses its tech to partners for the production of edibles for the cannabis marketplace. CBGL has also filed three non-provisional and multiple provisional patents for cannabis infusion and nanoparticle technologies and continues an active research & development program.
Cannabis Global Inc. (OTC US:CBGL) most recently put out a shareholder letter that outlines the company’s growth opportunity that’s worth a read.
On new revenue momentum, the company’s CEO, Arman Tabatabaei, notes in the release, “As we have recently announced, our company is beginning to gain traction, which is clearly being seen in the growth of our revenues across multiple sectors. While we have not yet reported results for our most recently closed fiscal quarter, which ended on February 28, we expect the growth patterns we experienced late last year to continue. This revenue growth is being driven by new products entering the market, an increase in our distribution efforts, and the acquisition of numerous new retail dispensary customers throughout California. We expect these trends to not only continue, but to likely accelerate.”
Tabatabaei also credits the company’s successful revamping of its product mix as a key factor driving CBGL’s future success:
“As the cannabis consumption in the primary metropolitan areas of California has matured, cannabis customers are demanding a variety of new products. We have followed one of the major growth trends in the industry and revamped our product offerings accordingly. Our Live Rosin products, which are produced without any solvents, continue to gain strong traction with multiple orders coming into the company. As a result, we have significantly geared up our manufacturing capability in this area. We are expecting the solventless trend to accelerate as we move throughout 2022.”
Cannabis Global Inc. (OTC US:CBGL) has been a development-stage company for most of the past few years as it lines up its IP with its market reach. As a result, the stock has largely missed out on big gains in the cannabis sector during that period.
However, there are signs that CBGL is now emerging as a growing commercial-stage name, which could mean it has a lot of ground to make up. Given that backdrop, investor enthusiasm returning to the cannabis space could be a key spark for CBGL shares, which currently sit on a market cap of just $3.2 million and a small float of just 86 million shares.