With the state of Washington approving rules for the legal sale of marijuana to anyone over 21 late last year, and Colorado's legalization of the sale of marijuana effective Jan. 1, the prices of many pot penny stocks have soared.
For example, in the past month, GreenGro Technologies Inc. (OTC: GRNH) is up 1,210% (after having risen as much as 2,100%), Cannibis Science Inc. (OTC: CBIS) is up 183%, and Hemp Inc. (OTC: HEMP) is up 359%.
Hemp Chief Executive Officer Bruce Perlowin told Bloomberg News investors in pot penny stocks are looking for "the next Microsoft."
"The demand for marijuana is insatiable," said Perlowin. "You have a feeding frenzy for the birth of a new industry."
Why Pot Penny Stocks Are Smoking
But it's not just what's happening in Colorado and Washington state that has investors gobbling up pot penny stocks.
The legalization of marijuana for medical purposes is much more widespread, with 18 other states and the District of Columbia already on board, and more states are considering it.
And recent polls have shown that the public is increasingly in favor of legalizing marijuana. In a CNN poll released a week ago, 55% of the respondents said marijuana should be legalized.
Just 27 years ago, in 1987, only 16% were in favor of legalization. Even a little more than a decade ago, in 2002, only 34% favored making marijuana legal. That means it's likely more states will follow the examples of Colorado and Washington in the years ahead.
"This is unquestionably a tremendous growth industry," Betty Aldworth, deputy director of the National Cannabis Industry Association, told CNN. "There hasn't been an opportunity like this in American history in quite some time. The tech boom had an impact on the American economy, but I think this could rival it. We're not creating a market out of nothing. We are just shifting it from the underground market."
Well, the legalization of marijuana might not quite rival the tech boom. But there is plenty of money to be made…