US Canna Cometh

Earnings on the main stage.

Daily Recap

The summer Friday session was what one would expect from a sector that’s been gated from capital markets. Between Apple and Amazon earnings, interest rate jitters, credit downgrades, political indictments and the NFL kicking off the preseason, it’s become clear people would rather smoke cannabis than invest in, or talk about, it.

$15M notional volume traded on the day for the US plant-touching public companies we track, which sport an aggregate market cap of ~$8B and should put up ~$8B in top-line revs this year. Of course, there’s the whole 280E tax thing to contend with.

US cannabis earnings will arrive in force next week: Verano and GTI will bookend Tuesday, Trulieve and Curaleaf will hug the Hump and TerrAscend tops off Thursday.

We expect Q223 top-lines to be muted and muddled but their relative abilities to navigate the status quo through this enduring war of attrition will be on full display.

[note: we continue to believe 1H23 will likely be the fundamental trough as prices firm and new states onboard, but those numbers won’t hit the tape until coming quarters]

In other news, shots fired in the Florida’s AG-Trulieve Supreme Court battle, Germany’s scaled-back cannabis law still faces EU hurdles; the top Alabama MMJ regulator resigned amid controversy, NY canna keeps getting sued, Australia, which is a country and a continent, is reportedly edging toward legalization (Sydney also took silver in the world’s most 420-friendly cities); a NJ cop who was fired over cannabis use was reinstated with full backpay; the illicit market is reportedly tied to organized crime; Maine is the latest state that believes 280E is bullshit; Illinois set a new 2023 monthly sales record with $140M in adult-use purchases; we sniff a potential US up-listing by a US plant-touching operator, review state level trends, and remind our community to watch WEED 7: A Senior Moment this Sunday 8:00 PM on CNN.

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