With cannabis legalization poised to happen on a federal level sooner than later and continued growth of the cannabis industry, marijuana stocks are making an impact within the sin-stock market.
In the first three months of 2021, Illinois cannabis taxes exceeded liquor taxes for the first time, hitting $86,537,000 million. March cannabis sales amounted to $109,149,355, representing a month-over-month jump of more than $28 million.
Other sin-stock peers also recognized the opportunity within the cannabis sector. Tobacco giant British American Tobacco PLC (NYSE: BTI) recently invested CA$221 million ($175.7 million) in OrganiGram Holdings Inc (NASDAQ: OGI), acquiring a 19.9% equity interest in the cannabis company.
Apart from money, tobacco companies like BAT are bringing the knowledge and experience of being a part of the sin-stock market to the cannabis space.
"What we've learned from alcohol and tobacco is that distribution channels are more important than anything," said Josh Kincaid, portfolio risk analyst at C3 Fund.
Partnerships with distributors should be about figuring out "how to reduce your shrinkage or your waste," as opposed to just looking at "how to get your product from point A to point B,” Kincaid explained.
Even though a number of companies within the sector have set themselves as "buyout targets for big pharma big tobacco, and big alcohol," it "all boils down to is that distribution …