REDRUM

Financial markets slice lower.

Daily Recap

70% of Americans, including most Democratic and Republican voters, say cannabis should be legal for adults—yet lawmakers on both sides of the aisle are putting cannabis consumers in their crosshairs during this legislative session.

In Republican-led states like Montana, Nebraska, Ohio and South Dakota, lawmakers are seeking to either repeal or roll back voter-approved legalization laws, while Dem states like California, Maryland, Michigan and New Jersey are seeking to undermine existing legalization markets by drastically hiking cannabis-related taxes.

In sum, elected officials are treating cannabis consumers as targets, not constituents.

Northern Lights 🔦

The Canadian government earned $15.7B from the control and sale of alcohol ($13.5B, -0.5%) and adult-use cannabis ($2.2B, +12.6%) in the last fiscal year.

Sales of alcohol fell 3.8% in ‘23-’24, or the largest volume decline ever recorded since Canada began tracking alcohol sales in 1949. The decrease in alcohol sales occurred despite a 2.5% increase in the price of alcoholic beverages.

Sales of adult-use cannabis increased 11.6% or $0.5B from one year earlier, reaching $5.2B in ‘23-’24. The cannabis sales growth occurred despite a 2.8% decrease in the price of adult-use cannabis.

Separately, as Canadian PM Justin Trudeau readies to vacate his office, Canadians are giving him an exit review—and he’s evidently earned the highest marks for his role in legalizing cannabis nationwide. Out of 10 policy items that respondents were asked about, legalization was the only one with majority support.

Texas Two-Step

When the 2018 farm bill legalized hemp, they differentiated it from illegal forms of cannabis by defining it as having 0.3% delta-9 THC or less. The laws didn't explicitly cap other forms of THC, like delta-8 and delta-10.

Operators jumped through that loophole and retailers are selling products containing those THC compounds. Over the last decade, thousands of shops have opened across Texas, selling cannabis products with varying levels of delta-8 and delta-10 THC.

"We've got to get the genie back in the bottle," said Sen. Charles Perry, who authored bill SB3 that would ban THC. The committee will meet to vote on the bill, which the full Senate is expected to approve—but the path through the House is less certain.

Buckeye Bullseye

A pair of Ohio Republican state senators want intoxicating hemp products to be sold only at adult-use dispensaries—not convenience stores, smoke shops or gas stations.

“Intoxicating hemp products are untested, unregulated psychoactive products that can be just as intoxicating, if not more intoxicating, than cannabis. Given the lack of regulations, hemp has been able to confuse Ohio consumers and law enforcement.”

Stocks & Stuff

Risk ran from Wall Street as growth concerns from a possible trade war, coupled with the specter of a government shutdown on Friday, was enough to chase the bulls, with both the S&P and NASDAQ closing well below their respective 200-day MAs.

U.S. canna wasn’t immune, as MSOS lost 4% to register a new all-time closing low.

Below, we’ll top-line the week, review capital investments across the industry, preview this week’s earnings, touch base with the Texas attorney general and share the results from an impromptu tailgate taste test this weekend.

All that and more, just scroll down.

SPY 0.00%↑ QQQ 0.00%↑ IWM 0.00%↑ MSOS 0.00%↑ ETF Notional: $12M

Top Stories