Here's why ASX cannabis shares are lighting up today

ASX cannabis shares are rising today after New York state in the US legalised recreational marijuana use. Let's take a look.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The S&P/ASX 200 Index (ASX: JXO) is having a pretty decent day today. A the time of writing, the ASX 200 is up a healthy pre-Easter 0.21%. But one group that is doing a quarter-ounce better are ASX cannabis shares.

Take Creso Pharma Ltd (ASX: CPH). It's up 1% to 20 cents a share. Or Cann Group Ltd (ASX: CAN), up 0.54% to 54 cents a share. Elixinol Global Ltd (ASX: EXL)? It's up 5.56% to 19 cents a share. Althea Group Holdings Ltd (ASX: AGH) is up 1% at 50 cents.

What gives?

Well, there's a piece of news out today that might be getting investors keen to light up on cannabis shares.

According to the Governor of the US state of New York's office, Governor Andrew Cuomo has just signed a bill into law that has legalised recreational use of cannabis in the state of New York.

As we flagged a few days ago, New York now joins 14 other US states that have already legalised recreational use. The new New York law will allow the state to issue licenses for dispensary businesses to sell marijuana to adults aged 21 and over legally.

Further, outside-of-home possession of marijuana is now legal to a limit of 3 ounces. It will also allow adults aged over 21 to grow 3 mature and 3 immature plants each (with a limit of 6 mature and 6 immature plants per household).

The governor expects that the new law will raise approximately US$350 million in new taxes annually, as well as create between 30,000 and 60,000 new jobs across the state.

How will this affect ASX cannabis shares?

Well, this is something of a hollow victory for the ASX cannabis sector. What happens in the United States, of course, has no direct implications for Australia's cannabis industry. Recreational cannabis remains illegal in every Australian state and territory, although laws differ when it comes to decriminalisation. Medicinal use is more prevalent, but again, it's still early stages.

Even so, proponents of wider cannabis legality would no doubt still be heartened. Over in the US, we have seen a 'domino effect' with legalised cannabis. 15 states now allow recreational marijuana, but it was only back in 2012 that the first two US states (Colorado and Washington) legalised recreational use. A further 36 US states allow medicinal use as of today.

Arguably the more states and countries follow in New York's path, the better the prospects here for ASX cannabis shares.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Cannabis Shares

Man in a cannabis greenhouse looks unhappy and puts his thumb down.
Cannabis Shares

Why are these 2 ASX cannabis stocks sputtering today?

Up 174% in 2023, this ASX cannabis share is giving back some more of its gains today.

Read more »

A young male investor wearing a white business shirt screams in frustration with his hands grasping his hair after ASX 200 shares fell rapidly today and appear to be heading into a stock market crash
Cannabis Shares

Guess which ASX cannabis share is crashing 36% following an FDA blow

Rookie mistake: This cannabis share just missed out on FDA approval for a simple reason.

Read more »

A Cronos Australia farmer and ASX cannabis shares investor stands in a field of cannabis plants and smiles at the camera
Cannabis Shares

Could ASX cannabis shares be set for a resurgence?

The world's legal and medical fraternities are taking small steps forward in the medicinal cannabis movement.

Read more »

A young woman holding her phone smiles broadly and looks excited, after receiving good news.
Cannabis Shares

This ASX cannabis stock is up 160% since June, and it has an FDA ruling coming up!

Investors are very excited about this cannabis stock.

Read more »

two men in formal business clothing closely inspect a bud from a cannabis crop.
Cannabis Shares

Why ASX cannabis shares just jumped back into the spotlight

ASX cannabis shares operate in a nation where medical marijuana is legal but recreational use remains broadly forbidden.

Read more »

A hip young man with a beard and manbun sits thoughtfully at his laptop computer in a darkened room, staring at the screen with his chin resting on his hand in thought.
Cannabis Shares

Should I buy Incannex shares while they're at multi-year lows, or steer clear?

Is the cannabis-based pharma company a bargain buy right now?

Read more »

Man in the green house growing medical cannabis
Cannabis Shares

A $3k investment in ASX cannabis stock Incannex 5 years ago is now worth $15,000. Here's why

This medicinal cannabis company has been a rare winner in its field.

Read more »

a man wearing old fashioned aviator cap and goggles emerges from the top of a cannon pointed towards the sky. He is holding a phone and taking a selfie.
Cannabis Shares

Which ASX cannabis share is surging 27% on record quarterly results?

Althea CEO Josh Fegan has declared "a landmark turning point" for the company.

Read more »