Why Curaleaf Stock Was Smoking the Market Today

Key Points

• Research out of Germany indicates that pot legalization reduces consumption among young people.

• This contradicts a classic talking point against legalizing the drug.

• 10 stocks we like better than Curaleaf ›

Whenever there's news about potential marijuana legalization anywhere in the world -- or at least some measure of decriminalization -- the few publicly traded pot companies tend to benefit. This was the case on Tuesday with big multistate operator Curaleaf (OTC: CURLF), as a new study undertaken on the other side of the world illustrated the benefits of making the drug legal.

The company's share price was up by nearly 6% in midafternoon trading as a result, putting it far ahead of the S&P 500 index (which, at that time, was down by 0.6%).

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Pot preferences among the young

That study, conducted by German government agency the Federal Institute for Public Health, found that marijuana use by young people in that country fell after the legalization of recreational pot in April 2024.

Image source: Getty Images.

Specifically, the Institute's Drug Affinity Study found that marijuana consumption among people aged 12 to 17 fell from 6.7% to 6.1% of that population over the past year. And people in that cohort who consume the drug regularly (over 10 times in the past year, per the study's benchmark) fell to 1.1% from 1.3%.

On the flip side, older cannabis users saw an increase in marijuana use across a slightly longer stretch. The researchers found that consumption among young adults (those aged 18 to 25) increased to 25.6% from 23.3% within the years 2023 and 2025.

Bolstering the case for reform

In Germany and elsewhere, one of the cornerstones of anti-legalization arguments is that making pot legal will not only increase use among vulnerable young people but increase it sharply. The fact that a government agency in one of the world's leading democracies found exactly the opposite is yet another piece of evidence that marijuana law reform is sensible -- in Germany and the rest the world.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.