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Stock in marijuana companies skyrocket after Colorado sells $1 mil on first day

The long lines stretching around Colorado marijuana shops have apparently not gone unnoticed by investors, with the price of shares for cannabis-related companies skyrocketing since the drug became legal throughout the state on January 1.

One of the claims most often cited by marijuana legalization  advocates is how profitable the policy would be both for state  governments and the local economy. While a sample size of just a  few days is small, the initial success indicates the claims may  prove to be true.

A study cited by AFP estimated that the Colorado state government  could reap an annual $10 billion by 2018, but private companies  already have reason to celebrate. MediaSwipe Inc, which has built  a business on selling transaction processing systems to the  medical industry and now works with cannabis stores, has seen its  shares jump 88 percent over the past month of trading and 69.4  percent on Thursday alone.

Sharing the sudden success is GreenGro Technologies, a growing  equipment dealer, with share prices rising 52.3 percent to 6.7000_459964191  cents. Medical Marijuana Inc, a California grower of medical  marijuana, also saw an increase, up 22 percent to 18.9 cents.Most of the companies have yet to make an impact, perhaps because  legalization is so new or because it is still limited to  Colorado. But researchers with ArcView Market, the same study  cited by AFP, said they expect the national legal marijuana  market to grow in size from $1.44 billion to $2.34 billion this  year. That forecast will likely rise again soon as Washington  state is scheduled to legalize cannabis later this year and a  number of other states are considering similar legislation.

Gains will come in the form of increased demand in existing  state markets, as well as from new state markets coming online  within the five-year horizon,” the ArcView study noted.

Most of the cannabis stores are located in an around the Denver  area, where shop owners estimated they collectively sold $1  million within the first 24 hours. Retail buyers are charged a 10  percent tax for every sale and a 15 percent excise tax which  varies based on the average market rate. The first $40 million in  taxes will be put toward the school system with any tax dollars  after that dedicated to regulations.

Yet, because marijuana is still illegal under federal law,  business owners are prohibited from putting their profits in the  bank – making it difficult for many to know exactly how much  they’ve earned.

We all know this needs to be fixed because there is not one  good reason why these businesses are not allowed to have banking  accounts – only bad reasons: security concerns and accountability  concerns,” Mike Elliott, executive director of the Medical  Marijuana Industry Group trade association, told Denver’s  KDVR-TV.

State regulators have said they have been in contact with federal  officials and expect the discrepancy to be resolved soon, yet  none of the remaining hurdles have been enough to dampen  customers’ spirits.

This feels like freedom at last,” said Amy Reynolds,  who owns two medical marijuana shops in Colorado Springs.   “It’s a plant, it’s harmless, and now anyone over 21 can buy  it if they want to. Beautiful.”

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Source: rt.com

Comment (1)

  1. Julio Hendricks

    Where do I obtain investment information for it?

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