From Texas to Indiana, the United States (US) cannabis industry is gaining traction in conservative states and we are bullish on the direction the industry is heading.

Earlier this month, Beto O’Rourke said he would legalize cannabis in Texas after clinching the Democratic nomination to run for governor in the Fall. We are favorable on the stance he is taking towards cannabis and expect the topic to be a core pillar of his campaign strategy.

According to a study conducted at the University of Texas at Austin, there has been an increasing number of voters in Texas that support the legalization of cannabis since 2010. The study said that more people in Texas favor legalization which represents a major change since 2010 (when there was 60/40 split against legalization).

Indiana is another conservative state that is warming up to legalizing medical cannabis and this is a market that we are closely watching. The state is surrounded by legal cannabis markets that are generating $100+ million of taxes from cannabis sales and we believe this played a role in the advancement of the conversation.

After recreational cannabis was legalized in Illinois and Michigan, the Midwest became an emerging cannabis region of the US. These two states have been steadily reporting impressive monthly sales revenue from recreational cannabis and we are bullish on the long-term outlook that is associated with the region.

Indiana seems to be behind the curve with legal cannabis and we expect this to change before year-end. Currently, there are a handful of companies that have leverage to multiple states in the Midwest and we are bullish on the potential value that can be generated in the region in the near and long-term.

Two US Operators with Leverage to the Midwest

Body and Mind Inc. (CSE: BAMM) (OTC: BMMJ) is a US multi-state operator that has leverage to two burgeoning cannabis markets in the Midwest (Michigan and Ohio) as well as high-profile markets on the West coast (California and Nevada). We expected Body and Mind to be a major beneficiary of the growth of the cannabis market in the Midwest and are bullish on the direction the management team is taking the business.

Red White & Bloom (CSE: RWB) (OTC: RWBYF) is another US cannabis company with leverage to Michigan and we will monitor how the business is able to penetrate other states in the Midwest. The company recently completed the acquisition of PharmaCo which we expect to be immediately accretive to the business and consider this to be an important development for the business.

We believe the two US cannabis operators are executing on differentiated growth strategies and expect to see both businesses capture market share in major Midwest markets. Going forward, we expect these types of operators to expand into Indiana once cannabis is legalized and will monitor how the Midwest region continues to evolve.

If you are interested in learning about companies that are levered to the Midwest, please send an email to support@technical420.com with the subject “Midwest Cannabis Companies” to be added to our distribution list.

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Authored By

Michael Berger

Michael Berger is Managing Partner of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.