Legalized marijuana

Welcome to Marijuana 2.0

Illustration of scissors cutting a ribbon around marijuana
Illustration: Aïda Amer/Axios

The cannabis industry is poised to undergo another major change as Colorado's House Bill 1090 takes effect next month, providing investment opportunities for publicly traded companies, venture capitalists and private equity firms, which were previously barred.

Why it matters: The law will push cannabis into a new phase of development and foster considerable consolidation in the industry, creating new businesses and driving out others.

The high times may have passed for marijuana stocks

A marijuana growth facility in Maryland.
A marijuana growth facility in Maryland. Photo: Michael Robinson Chavez/The Washington Post/Getty Images

Marijuana stocks have fallen hard in 2019 and short sellers have been increasing their positions, betting the sector is overvalued and primed for further losses. Despite the passage of the SAFE Act through the House last week, Wall Street remains bearish on companies dealing in the drug.

The latest: Bank of America Merrill Lynch analysts Christopher Carey and Lisa Lewandowski downgraded Canada's Canopy Growth, the world's largest marijuana company, to neutral from buy, saying Wall Street expectations are "far too high."