The Bird Bath

Pathogens, price target cuts and broken deals greet Monday.

Daily Recap

As the senate leaves for vacation without SAFE banking progress and the need for near-term reform was amplified by the Master Card news, Senate Majority Leader Chuck Schumer provided an update late Friday, touting “good progress,” reiterating it has “always been a priority for me,” saying “we’re close,” and that he expects a “very, very productive Fall in the senate.”

Those assurances helped US cannabis ETF MSOS hold an important technical toggle on Friday despite the almost universal view that the path of least resistance was lower. The ETF squeezed 5% higher on $31M notional volume into the weekend, which sadly wasn’t half-bad volume for a sector sans custodians on a summer Friday session.

We walked in this morning to find potency pathogens and a pair of price target cuts, as analysts Andrew “The Greek Freak” Partheniou (Stifel) and Aaron “touch of” Grey (AGP) took scissors to US cannabis estimates ahead of earnings season. Stifel also cut Curaleaf from a “buy” to “hold” on a “valuation mismatch” and “spotty track record.”

We also got word that, despite best efforts, extended deadlines and a year and a half to figure it out, Cresco Labs and Columbia Care called off their pending nuptials, citing the “evolving landscape” in the cannabis industry. There will be no penalties or fees, just another real-time example of how difficult it status quo operating climate is.

Yet, as the dust settles for July—and despite a 22% intramonth decline, ten straight days of losses and a new all-time closing low of $5.12 on July 27th—US Cannabis ETF MSOS somehow finished the month 1.4% higher (-21% YTD). Take that, Karl Marx.

In other sector news, there continues to be bipartisan and bicameral demand for the FDA to establish CBD guidance; the senate voted to let people who’ve used cannabis work at intelligence agencies like the CIA and NSA as part of the defense bill; the top Alabama cannabis regulator is facing a lawsuit seeking his removal; Minnesota will become the 23rd state to legalize adult-use cannabis tomorrow; global canna sales are expected to exceed $103.8B by 20230; a tech billionaire was accused of fraud in a pot start-up lawsuit, and we do a quick sentiment check, map upcoming earnings dates, review current price/sales multiples, and dig a bit deeper into street expectations.

All that and more, just scroll down…

SPY 0.00%↑ QQQ 0.00%↑ IWM 0.00%↑ MSOS 0.00%↑ PT Notional: $31.7M

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