US Cannabis Active Period Arrives

Heavy winds are expected to pass, along with SAFE Banking.

Bloomberg reported this morning that Senate leadership will release a modified version of their cannabis legislation next week…

…and while we already know comprehensive reform doesn’t have the necessary votes, we’ll reserve judgment until we see what’s actually in the bill. Still, our sense is this is more about politics than passable policy at this point.

It is a view shared by Isaac Boltansky @ BTIG, who today offered,

“From our seat, the release of the CAOA is performative theater that should allow Senate Democrats to uniformly pivot to consideration of narrower measures, including cannabis banking legislation.

We remain bullish on cannabis banking legislation during this Congress and continue to believe that the annual defense bill is the best legislative vehicle to carry the measure to the president's desk.”

Even the self-proclaimed “nattering nabob of negativism,” Cowen’s colleague, Jaret Seiberg, picked up the potentially positive signals…

…while Piper noted a critical point before they toe-tagged Chuckie’s cheese.

“The US opportunity is significant and existing operators are best positioned, and their head start in the US will remain a competitive advantage.”

Importantly if not unsurprisingly, Congressional Cannabis MVP Perlmutter stepped up once again, providing what we believe could be the backdoor to banking…

…and while the natural inclination after six false starts is to not start the engine again, we think our boy Isaac nailed it with his last graph:

Road Trip

Due dilly is one of the best perks of this industry and that was super-evident over the last 24 hours in Boston, where I joined AYR for the Grand Opening of Back Bay…

…which per Axios, looks more like a spaceship than a dispensary. Como se dice mint?

^ $AYRWF is trading @ .77x 2022 sales; .5x 2023 sales; .44x 2024 sales; it’s silly sauce.

I also spent QT with my good pal Andrew Thut, CIO @ 4Front, including dinner last night with a few Boston-based PMs (interest is real) / a visit to their very impressive NECC facility to meet their super-knowledgeable / engaged / passionate team.

^ We spoke about 4Front in February; they’re gonna own the sexiest slice of the canna CPG supply chain in CA / IL and have some of the better growing Mott’s we’ve seen.

It was good to get away from the screens and be reminded of why we do what we do with the people that we do it with; to share their successes, meet some of their peeps and yes, sample delicious flower along the way. (← what, it’s legal!)

I know it’s been a brutal sixteen month stretch for the sector—the second drawdown of 80%+ for cannabis proxies in four years—and while it might be too soon to know if the Light at the End of the Tunnel is real, it may have gotten a bit brighter today.

Good luck out there.

positions / advisor $AYRWF $FFNTF and U.S Cannabis ETF MSOS