Pot Stocks Plunge Despite New Jersey Marijuana Legalization

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Cannabis stocks are plummeting today even though New Jersey has just legalized recreational marijuana. New Jersey officials announced that they legalized recreational marijuana on Monday, but pot stocks are plunging for the second consecutive day.

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New Jersey Legalizes Recreational Marijuana

New Jersey Gov. Phil Murphy signed three marijuana use reform bills into law on Monday. Recreational pot is now legal and regulated for adults ages 21 and up. It has also been decriminalized. Starting right away, anyone who has been arrested for petty possession of marijuana, which previously could have kept them from getting a job or continuing their education, will be able to find relief.

The question about marijuana was entered on Election Day in November, and over 2.7 million New Jersey residents voted in favor of legalizing it. Following the election, state lawmakers debated what to do if anyone under the age of 21 is found to have marijuana. The law remains unclear on that matter.

New Jersey's Policemen's Benevolent Association told a local news outlet that there was no penalty except for a write-up or warning.

Cannabis Stocks Tumble

Pot stocks like Tilray Inc (NASDAQ:TLRY) and Canopy Growth Corp (NASDAQ:CGC) are down significantly today after falling on Monday as well. Canopy Growth was off by 8%, while Tilray plunged 10%. Aurora Cannabis Inc (NYSE:ACB) and Cronos Group Inc (NASDAQ:CRON) were each down 7%, and Green Thumb Industries Inc (OTCMKTS:GTBIG) was off by 4%. Sundial Growers Inc (NASDAQ:SNDL) tumbled 14%, while Trulieve Cannabis Corp (OTCMKTS:TCNNF) and Curaleaf Holdings Inc (OTCMKTS:CURLF) were each down 6%.

Cannabis stocks have been performing well in the new year, driven first by President Joe Biden's election after he pledged to decriminalize marijuana. Then Reddit users from the forum WallStreetBets turned their attention from GameStop (NYSE:GME), AMC Entertainment Holdings Inc (NYSE:AMC) and other names to weed stocks like Tilray.

InvestorPlace recommended eight marijuana stocks in a post today. One of those stocks was Innovative Industrial Properties Inc (NYSE:IIPR). Like the other pot stocks, it is down today, falling by about 5%. However, one thing that's unique about this company is that it is a real estate investment trust that serves the medical marijuana industry.

The other recommended stocks are Tilray, Jazz Pharmaceuticals (NASDAQ:JAZZ), Cronos, Green Gumb, GrowGeneration (NASDAQ:GRWG), Trulieve and Cresco Labs (OTCMKTS:CRLBF).