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Five states legalized recreational marijuana this year. But a top Wall Street analyst predicted that it would be a long time before cannabis dispensaries opened in these states — years, in some cases.
Cantor Fitzgerald's Pablo Zuanic said in a Monday note that just three of those states — New Mexico, Connecticut, and New Jersey — would have recreational-cannabis sales before the end of next year.
New York, which passed cannabis legalization in March, likely won't open dispensaries until the first quarter of 2023, Zuanic said.
Gov. Andrew Cuomo has yet to make nominations for the state's Office of Cannabis Management. Once that body is set up, it will need to create rules and host a public-comment period, iterate, and then launch the program.
"We model a rec start by 1Q23, but even that may be optimistic," Zuanic said. Still, he said he expected New York to sell $2.2 billion worth of legal cannabis in the first year of sales.
With New York and other large states open, Zuanic expects marijuana sales in the US to double, from about $17 billion in 2020 to $36 billion in 2023, even without federal legalization, he said.
"Even without changes at the federal level, we think that the US MSO group should benefit from continued sales growth at the state level," Zuanic said, referring to multistate operators.
His top US cannabis stock picks include Curaleaf, Green Thumb Industries, Trulieve, andCresco Labs.
In terms of the other states that have recently legalized cannabis, Zuanic expects:
- New Jersey sales to begin in the third quarter of 2022.
- Connecticut sales to begin in the third quarter of 2022.
- New Mexico sales to begin in the third quarter of 2022.
- Virginia sales to begin in the first quarter of 2024. (Gov. Ralph Northam is pushing for an earlier start.)
Zuanic said he expected Maryland to pass legalization and begin recreational sales in the first quarter of 2024 and Pennsylvania to pass legalization and start sales in 2025.
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