If New Jersey voters approve legal marijuana Nov. 3, it will be a "tremendous move" for the cannabis market, said Emily Paxhia, co-founder and managing partner at Poseidon Asset Management.
The Garden State is well-populated and well-positioned to apply pressure to other markets, Paxhia said during a panel discussion on the election at Thursday's Benzinga Cannabis Capital Conference moderated by CNBC's Tim Seymour.
Cannabis On The Ballot: If the referendum passes, Anderson Economic Group's Andrew Miller said "one out of every three Americans would live in a state where they can legally purchase recreational cannabis."
While New York and Pennsylvania are expected to follow suit, some less obvious candidates to legalize medical marijuana in the future are "states that are demographically similar [and] a little more conservative-leaning," he said.
Mississippi is also poised to legalize medical cannabis in November.
Yoni Meyer, partner at Casa Verde Capital, said that seeing cannabis legislation in more conservative states "speaks volumes for where the national conversation goes."
Attracting Institutional Investors: Conservatives "completely recognize the need to tax and regulate" the cannabis industry, said Matt Hawkins, founder and managing partner at Entourage Effect Capital
The designation of marijuana as essential following the onset of the coronavirus pandemic has "brightened the spotlight," he said.
Institutional investment is what the cannabis industry lacks the most, said Scott Greiper, president and founder at Vridian Capital Advisors.
SPACs are "the first significant Institutional investor participation in this industry," he said, adding that the solution to the problem is a legislative one.
Poseidon's Paxhia said institutional capital is incoming and will flow to multistate operators.
These businesses prove that the industry is growing, as they continue to be attractive for institutional investors, she said.
"We can't just wait for legalization, or rescheduling or de-scheduling," she said, adding that the cannabis industry has to be "prepared to accept institutional capital and make it interesting enough for them to want to take the step to invest into space."
Casa Verde's Meyer said tech companies are also showing an interest in the cannabis sector, as the opportunities are greater than in any other industry.
Still, they are "sitting on the sidelines," he said, adding that the industry's growth should cause more states to legalize tax revenue, inevitably giving "more comfort" to large investors.
COVID-19 And Cannabis: The coronavirus crisis and economic recession "suck a lot of oxygen out of the room, [and] they inject even more uncertainty into how high priority cannabis legislation might be regardless of who wins this fall," said the Anderson Economic Group's Miller.
Entourage Effect's Hawkins said the pandemic has "been a blessing in disguise for the industry," since companies are now valued according to their profitability and "additional metrics other than next year's revenue."
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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