There was big news out of Germany this week. The country announced that it’s officially legalizing recreational cannabis use.
It’s now the largest European Union country in history to legalize weed.
According to the BBC, “The German parliament has backed a new law to allow the recreational use of cannabis. Under the law, over-18s in Germany will be allowed to possess substantial amounts of cannabis, but strict rules will make it difficult to buy the drug.”
Starting April 1, “Smoking cannabis in many public spaces will become legal… Possession of up to 25 g, equivalent to dozens of strong joints, is to be allowed in public spaces. In private homes the legal limit will be 50 g. Already police in some parts of Germany, such as Berlin, often turn a blind eye to smoking in public, although possession of the drug for recreational use is illegal and can be prosecuted.”
The article continues, “Use of the drug among young people has been soaring for years despite the existing law, says Health Minister Karl Lauterbach, who is instigating the reforms. He wants to undermine the black market, protect smokers from contaminated cannabis, and cut revenue streams for organised crime gangs.”
This is a big move that’s largely gone unnoticed here in the states, but in Europe, people are taking note.
Paris newspaper Le Monde detailed how the pot will be sold…
The changes leave Germany with some of the most liberal cannabis laws in Europe, alongside Malta and Luxembourg, which legalized recreational use in 2021 and 2023, respectively. The Netherlands, known for its permissive attitude to the drug, has in recent years taken a stricter approach to counter cannabis tourism…
As the next step in the legal reform, from July 1 it will be possible to legally obtain weed through “cannabis clubs” in the country. These regulated associations will be allowed to have up to 500 members each, and will be able to distribute up to 50 grams of cannabis per person per month.
That’s starkly different from how other European countries like the Netherlands distribute weed, and clearly different from how the U.S. cannabis industry operates.
Cannabis clubs that have a membership limit sound like they can be manipulated, but what do I know?
Regardless, all the news is causing pot stocks to wake up, including my favorite legal marijuana real estate investment trust, Innovative Industrial Properties (NYSE: IIPR), which shot up to $106 last week.
The company just distributed its $1.82 dividend, so anyone holding the stock is very happy this week.
Personally, I think the stock is cheap and has more room to run. I’m predicting this will double in the coming years.
Remember at the beginning of the year when I said that it was your last chance to buy pot stocks?
Well, time is definitely running out…
Here’s what I said about the Feds possibly rescheduling the drug…
And the federal agency is now “reviewing” weed. Gee, I wonder what they have to do to review it. We all know it’s all a joke. One giant game to maintain arbitrary control of something they don’t understand and profit at the same time. The DEA responded in a letter by saying, “DEA has the final authority to schedule, reschedule, or deschedule a drug under the Controlled Substances Act, after considering the relevant statutory and regulatory criteria and HHS’s scientific and medical evaluation. DEA is now conducting its review.” The DEA is flexing a bit here, saying, “Don’t you forget that we have the final say in whether weed is harmful or not.” Well, they better hurry up, because time is running out for Biden and his agenda.
Now, unless you’ve been living under a rock for the last century, this is massive news. One of the main reasons that marijuana companies can’t formally bank is because of this Schedule I classification. It also hinders medical research and transportation across state lines. So it’s odd that this isn’t getting a lot of the media coverage it deserves.
But maybe that’s a good thing for us as investors because it gives us an opportunity to exploit the media’s ignorance. Again, this might be the last chance to get into some of the pot companies before the top blows.
Rescheduling is all but a formality at this point.
What’s my advice?
I continue to believe that pot stocks are undervalued, although they are starting to reach their fair price after Germany’s legalization. In just one month, the top stocks in the industry have gone ballistic.
But they remain penny stocks with room to run.
Once the U.S. stops restricting our freedoms and reschedules the drug, there will be a massive frenzy of buying.
That’s what you want to wait for.
