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Cannabis Legalization Decreases The Stock Market Value Of Major Pharmaceutical Firms

University of New Mexico News Room

September 01, 2022

Researchers from California Polytechnic State University and The University of New Mexico find that stock market investors predict cannabis legalization will reduce conventional pharmaceutical sales by billions of dollars.

In their recent study... They found that stock market returns were 1.5-2% lower at 10 days following a cannabis legalization event and that the implications of the annual sale from this reduction were in the billions.

Other studies have determined that cannabis access reduces the consumption of specific types of medications, such as opioids, or in certain patient populations like Medicaid patients, but this is the first study to analyze the overall effect of cannabis on pharmaceutical firms across all products and types of patients....

The study concludes... The magnitude of the negative effect of cannabis legalization on the stock market returns from investing in conventional pharmaceutical firms suggests that cannabis is likely to be a permanent and growing player in pharmaceutical markets worldwide.

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