After reports that New York Gov. Andrew Cuomo plans to make the Empire State the 21st state to allow use of medical marijuana, the passage of a new law in Illinois and a petition in Florida to legalize medical cannabis, a variety of marijuana-linked stocks have been on the rise.
Colorado and Washington also recently passed laws making recreational use of marijuana legal.
Shares of Mesquite, Nev.-based Cannabis Sativa Inc. almost tripled on Tuesday, Jan. 7, rising $7.40 to $11.25. A week earlier, the company announced plans to purchase a patent pending on a strain of medical marijuana called CTA from Kush Inc. for $1 million. Cannabis Sativa expects CTA to be the first patented strain of medical marijuana, president David Tobias said in a statement.
Cannabis Sativa said that it's also pursuing an acquisition of Kush, which has said that it plans to produce a line of a cannabis-based cosmetics. Kush's board of directors includes former New Mexico Gov. Gary Johnson; Mike Gravel, a former U.S. senator from Alaska; and Ed Rosenthal, author of "Ed Rosenthal's Marijuana Grower's Handbook."
Medbox Inc. produces vending machines for dispensing medical and recreational pot. Its shares almost doubled on Tuesday, rising $33.95 to $73.90, after the company announced it was adding electronic and biometric locks to its equipment.
The new features were added to meet the standards of the Canadian medical marijuana market, West Hollywood, Calif.-based Medbox said. The company also said it has orders for dispenser products for customers in Colorado, Illinois, Massachusetts, Nevada, Oregon and Washington, contingent on licensing approvals.
Shares of GreenGro Technologies Inc., which provides products and services to marijuana nurseries and clinics, almost tripled, rising 33.6 cents to 52 cents, giving the Anaheim, Calif.-based company a market capitalization of $61.8 million.
Terra Tech Corp., an Irvine, Calif.-based maker of equipment for marijuana growers, rose 5.36 cents, or 29.1% , to 23.8 cents.
In August, the Financial Industry Regulatory Authority urged investors to approach investing in marijuana stock cautiously.
"The con artists behind marijuana stock scams may try to entice investors with optimistic and potentially false and misleading information that in turn creates unwarranted demand for shares of small, thinly traded companies that often have little or no history of financial success," Finra warned in its investor alert.
Twenty states and Washington, D.C., allow the use of medical pot and 11 states allow marijuana dispensaries, according to ProCon.org, a website that tracks marijuana legislation. Minnesota, Ohio and Pennsylvania are expected to tackle the issue of medical marijuana this year.
Forbes has reported that the medical marijuana industry may be worth $9 billion a year by 2016.
Under federal law however, it is still unlawful to use marijuana for any purpose.