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Pot stocks take a hit as Trump gets tough on legal cannabis industry

The move came just days after Californians were celebrating the introduction of the sale of recreational pot.
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The White House crackdown comes days after Californians saw the introduction of the sale of recreational pot

Cannabis stocks have seen share prices hit as President Trump's Republican government got tough on the North American pot industry.

Yesterday, it emerged that US Attorney General Jeff Sessions had said he was rescinding policy brought in by former President Obama, which offered protection to states that have legalized marijuana as long as they follow guidelines.

Put simply, it allows US prosecutors to target legal marijuana operations

READ - High times for cannabis stocks as California becomes sixth state to sell drug for recreational use

It came just days after Californians were celebrating the introduction of the sale of recreational pot, which was made legal in the most populous state in the USA. It became the sixth US state to do so.

Experts reckon it is now the largest market for the herbal drug in the world.

"There should be no doubt that President Trump has officially declared war on California," quoted UK newspaper The Guardian on Thursday, quoting the state's senate leader Kevin de León.

New research out this week suggests the legal cannabis industry in the USA is expected to generate nearly US$40bn in economic impact by 2021.

That would be around a 150% increase in economic output from the US$16bn of cannabis generated in 2017.

But the latest Trump move could put those sort of numbers in doubt, and was felt strongly among cannabis-focused companies.

California-based Terra Tech Corp (OTCQ:TRTC), the largest US pot company with a US$407mln market cap, was down over 31% to US$0.28 on Thursday.

Denver-based GrowGeneration Corp (OTC:GRWG) shed over 21% to US$3.35 and fell 0.60% after hours.

Canada set to fully legalise marijuana 

Cannabis Sativa Inc (OTC:CBDS), based in Nevada, where recreational cannabis got the go-ahead last July, shed around 24% to US$7.40.

Meanwhile, many of the listed cannabis companies in North America are based in Canada, which is gearing up to fully legalize marijuana later this year.

Supreme Cannabis Company Inc (CVE:FIRE), shed 7.46% to C$3.04, while Ontario-based rival Canopy Growth Corp (TSE:WEED) shed almost 10% to C$32.32.

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