Canada is one of only two countries to legalize adult-use marijuana. Another country is Uruguay.

Unlike Uruguay, Canada’s legalization model allows sales to tourists.Canada is also home to booming cannabis exit market.

As the only G-7 country to legalize cannabis for adult use, Canada is closely watched by global cannabis investors.

Numerous Canadian cannabis companies offer stock, some of which were already doing so before legalization in 2018. Will legalization help these stocks?

After legalization of Canadian stocks

One research team Canada and China recently joined forces to study the impact, if any, of marijuana legalization on Canadian marijuana stock prices.

A common assumption is that state legalization has greatly boosted the price of marijuana stocks, however, this assumption has so far been largely uninvestigated.

The study explored price data for 10 Canadian cannabis stocks from 2015 to 2020.Prior to 2018, these companies focused on medical marijuana, transitioning to some extent after legalization aldult– Use industry.

“The results of the comparative analysis showed that the performance of matched pairs was largely correlated over time. In addition, cannabis companies performed better before legalization than they did after legalization,” the researchers said.

“Given that cannabis companies have not outperformed their counterparts, we can confirm that legalization of marijuana has not had a significant positive impact on the industry. We can also infer that from a stock market perspective, the legalization of recreational marijuana has so far unsuccessful so far,” the researchers concluded.

Legalization beyond measuring stock prices

As the researchers point out, the legalization of adult-use marijuana has not been successful from a stock market perspective, at least from a company participated in research.

However, this is a very limited measure when it comes to legalization in Canada.

From the perspective of consumers and patients who have previously faced severe penalties for marijuana, marijuana legalization has been a huge success.

It was also a huge success from the perspective of local governments and taxpayers who no longer needed to see public resources wasted on failed public policies.

Cannabis legalization in Canada is not perfect and still needs improvement, but it is far better than a complete ban, as will other countries that legalize cannabis in the future.