US Cannabis: Stairway to Earnings

The stage is set: the news must deliver

Last week New Jersey became the 15th state to fully legalize cannabis…

A few days later, Virginia joined them…

As the other 34 states lined up.

Why not? Billions in tax revs, a million new jobs, long-overdue criminal justice reform and research that’ll unleash the efficacious agility of this marvelous plant. Who’s in?

And it wasn’t just state-level adoption in the news; the incoming attorney general, ahead of his updated Cole Memo, signaled state-legal programs will be kosher.

While Senate Majority Leader Chuck Schumer is thinkin’ of a master plan.

This is NUCKING FUTZ, right? U.S canna RIPPED, right? Right? RIGHT?

(no)

U.S cannabis ETF $MSOS lost 17% from Feb 10 into last Friday, although there wasn’t much volume to speak of. In fact, it was quieter than a mouse fart the last few weeks.

But yesterday, as U.S canna began to lift and all those flags began to flank, buyers bum-rushed the space. And this wasn’t Johnny Retail, See? There was some beef on those bones, see? You know what I’m sayin’, see? 

The last page yesterday > all the prints last week.

Why the sudden interest, beyond the obvious generational opportunity and the fact that most U.S retail and all U.S institutions are still stuck in customs? (<-huge)

Curaleaf / $CURLF reports Tuesday…

$AYRWF reports Thursday (still growth @ value IF they execute).

And well, who knows what else we’ll see next week…chirp chirp chirp.

I don’t know if SAFE will be introduced next week but we hear there will be two phases to federal legislation: the first, SAFE banking will be a standalone bill that could be introduced as early as next week; and a more comprehensive bill will follow later this year that addresses social justice at scale and more complex issues such as the FDA and interstate commerce.

Or that’s the word on the street; don’t shoot the messenger if I’m wrong.

Now the risk-reward has shifted a bit; as recently discussed, we’ve lost some of those fundamental shock absorbers, at least when measured against the current footprint / 2022 numbers (again, 16 states vs. 50 total; we’re only one-third done).

But I still think we’re in the sweet spot into / through earnings and maybe all the way to 4/20… the truth is, I don’t know. How can I? How can anyone? But U.S canna remains the best risk-reward in this universe and maybe others.

I was gonna post a ton of charts but I’ve run out of room; plus, they all sorta look the same; poised, ready and in need of some news, or at least the expectation of news, to take the next step.

Risk wise, there’s the matter of the market, which is FUBAR through most free market lenses but makes perfect sense when viewed as a matter of national security.

But U.S canna should run into earnings, U.S canna should make new ATH’s, and depending on the news flow and narrative, Canada could tag along (we bought some front-month upsides across the north lest SAFE slips out prior to March expiration).

It’s gonna be bumpy for sure but just remember: perspective is everything.

Good luck out there.

/positions in everything mentioned + we advise the $MSOS US ETF.