On July 1, 2017, Nevada will legalize the use and sale of recreational marijuana, which could be a catalyst for long-term gains for three marijuana stocks.
We'll get to those three cannabis stocks in just a bit. But first, we wanted to make sure Money Morning readers know all the important details of Nevada's new marijuana laws. You see, these new laws could inject hundreds of millions of dollars into the Nevada marijuana industry...
What to Know About Nevada's New Marijuana Laws
Nevada isn't just legalizing pot, it's also changing three laws surrounding marijuana.
First, according to the Reno Gazette Journal, there will be a 15% tax on cultivation (for marijuana producers) for both medical and recreational marijuana starting July 1. Additionally, there will be a 10% retail tax on recreational marijuana only.
The cultivation taxes collected by the state will go towards schools, while the revenue from recreational marijuana sales taxes will be put in the state's rainy day fund.
From just this tax on recreational cannabis, Nevada is expected to generate more than $60 million in revenue over the next two years.
Second, new medical marijuana patients will also receive a break on the cost of medical marijuana cards. Currently, cards cost roughly $100 and expire after a year. Now, the cards will cost roughly $50 and be good for two years.
Reducing the cost of medicinal marijuana cards will make them more affordable for Nevadans.
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Third, the other change in the Nevada cannabis laws deals with past convictions from when marijuana was still illegal.
Anyone who was previously convicted of possessing up to an ounce of marijuana can file for their judgement to be erased and all the related records to be sealed.
According to RGJ, Democrat Assemblyman William McCurdy, II, hopes the bill will help people with marijuana possession convictions find new opportunities for employment now that pot is legal in the state.
The other positive side effect from legalization will be an economic boom in Nevada. By 2020, data solutions provider New Frontier Data projects marijuana sales in Nevada will reach $630 million.
And you can profit from the potential $630 million revenue windfall coming to Nevada with these three marijuana stocks...
The Three Most Important Pot Stocks to Know About Before July 1
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Terra Tech Corp. (OTCMKTS: TRTC) is a California-based company that cultivates and sells medical-grade marijuana.
The company has been called the "Starbucks of weed" as it tries to provide the same look, feel, and experience as the coffee shop in all five of its Blum dispensaries.
And through Terra Tech's strategic Nevada dispensary locations, it's primed to take full advantage of legalization. Three Blum dispensaries are located in Las Vegas, and the company also has one in Reno.
Drone Delivery of Marijuana Demonstration
TRTC has been volatile. It's traded between $0.14 and $0.56 in the past 52 weeks.
It's also down 49.7% so far in 2017, but it's still on our watch list as Nevada prepares to legalize recreational and medical marijuana.
The second marijuana stock on our watch list is The Canadian Bioceutical Corp. (OTCMKTS: CBICF).
CBICF is based in Canada. But according to New Cannabis Ventures, the Canadian company made a strategic investment to enter the Las Vegas market on May 30, 2017.
It acquired a 100% stake in GreenMart of Nevada LLC, an award-winning and licensed cultivation, production, and wholesale marijuana company. GreenMart produces concentrates, edibles, and other high-margin infused products in the medical marijuana sector.
It also applied for a dispensary license to enter the recreational market.
Over the last 52 weeks, the CBICF stock price has traded between $0.25 and $1.15 per share. So far in 2017, the CBICF stock price has climbed 169.02%, and it could continue to climb as the company generates new revenue from the Las Vegas market.
The final marijuana stock to watch as Nevada legalizes recreational and medical marijuana is Digipath Inc. (OTCMKTS: DIGP), a cannabis lab testing service based in Las Vegas.
You see, once recreational marijuana is legal, drug testing could drastically increase in U.S. workplaces.
On May 12, DIGP announced operating results for the three months leading up to March 31, 2017. The firm recorded $497,049 in net sales, which is a year-over-year increase of 252%.
And the sales could continue to increase after July 1, 2017, when Nevada legalizes marijuana.
Because Digipath is based in Las Vegas, it's already operating in the next state to legalize marijuana. On top of that, DIGP is also seeking to enter the California marijuana market for lab testing.
However, Digipath is one of the most speculative marijuana investments on this list right now. Over the last 52 weeks, the DIGP stock price has traded between $0.09 and $0.35 per share. So far in 2017, the DIGP stock price is down 94.21%.
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