Apple Opens the Door for Cannabis Mobile Apps

With investors focused on short-term losses in the cannabis space this week, it’s no surprise that this bit of news may have been overlooked. The Apple Store, a platform that was previously opposed to cannabis apps, has changed its policy.

Apple’s (AAPL) previous policy banned marijuana with controlled substances and tobacco. In the midst of that clause was an exception for licensed pharmacies. That exception now says, “except for licensed pharmacies and licensed or otherwise legal cannabis dispensaries.”

This policy change follows on the heels of last month’s Amazon (AMZN) endorsement of the MORE Act and the addition of three new states into the “legal weed” club. Effective July 1st, New Mexico, Connecticut, and Virginia bring the total number in that group to eighteen.

Will Federal Legalization Happen in 2021?

With 36% of the nation’s states and Washington, DC already on board with cannabis, the pressure on Congress is mounting to pass the MORE Act. The backing of two major tech companies might be just what’s needed to push them over the edge.

Getting the bill through House shouldn’t be an issue. The margin of error in the Senate is tight. Though a simple majority is doable, the bill needs sixty votes to pass. The only hope is for Republican legislators to break from the party line. This is an issue where that could happen.

Apple’s move may create the unstoppable force to push the immovable object out of the way. The App Store has half a billion users worldwide. Cannabis apps won’t just boost sales for their originators. They’ll significantly increase tax revenue. Congress can’t ignore that.

Here’s a thought. If Google (GOOG) and Facebook (FB) engage, the fight could be over. Both still have bans in place for cannabis and CBD advertising. Lifting those, like Apple did in the App Store, would provide a huge lift to the cannabis legalization movement.

Downtrend in Cannabis Stocks is a Buying Opportunity

I love it when good stocks go down in price. Tilray (TLRY) and Aurora Cannabis (ACB) are in that category this week. Both of them dropped between 6% and 7%, opening up yet another opportunity for me to buy low. Tilray is still up 78% this year.

Another intriguing play in the cannabis space is Hexo (HEXO). They’re trading today at $5.01 a share, down from their 2021 peak of $10.28 in February. Prior to the pandemic, they were over $30. Some see this as a warning sign. I look at it as an opportunity.

Hexo is the largest cannabis distributor in Canada, but they are based in Quebec, where Covid restrictions are just lifting. They have a number of acquisitions in the works that could increase their 50% market share. I’m betting on a resurgence, so I bought in big this morning.

Another company to watch is High Tide Inc (HITI). They are down 10% this month, but up 133% YTD. They just acquired Daily High Club, an ecommerce platform with 15,000 subscribers and 800K Instagram followers. High Tide might be the first to launch an app on the App Store.

Monitoring the SAFE Banking Act

The Secure and Fair Enforcement Banking Act (SAFE) gets less press than the MORE Act, but it’s an important piece of the puzzle for the cannabis industry. It passed in the House back in April. Senate approval is still uncertain, but discussions are in progress.

The SAFE Act will prohibit regulators from penalizing financial institutions for doing business with cannabis companies. Passing it will open up new lending and revenue sources that will push cannabis share prices through the roof. Buying in to the space now could pay off big.

With the Biden administration pushing for new regulation on tech companies, FAANG stocks may be facing some increased volatility in the coming months. Cannabis will fluctuate this year also, but the long-term upside is larger. Prices are low right now. It’s time to buy.

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About the Author

Apple Opens the Door for Cannabis Mobile Apps

Kevin Flynn

A former financial professional and founder of AdvisorScale Financial Writing, Kevin lives in Leominster, Massachusetts with his wife Evelyn, two cats, and nine wonderful grandchildren.