Verbal Can't

DEA Admin clams up on rescheduling.

Daily Recap

The head of the Drug Enforcement Administration told lawmakers today that it would be “inappropriate” for her to comment on the agency’s recent marijuana rescheduling determination because the rulemaking process is “ongoing.”

Notably, she did respond to a question about past precedent and said that “stepping out of marijuana,” she’s unaware of a single instance where a DEA administrator hasn’t signed a scheduling order.

What’s at Stake

The shift to Schedule III would unlock substantial financial benefits for U.S. cannabis operators, strengthening their balance sheets to increase financial flexibility.

Analysts project near-term benefits could include approximately $1.1 billion in cash flow improvements across the sector due to the removal of tax burdens under IRC 280e, which prohibits the industry from deducting normal business expenses.

“On the US market alone, we could justify valuations of >$110B… right now, the two largest companies have EVs barely above $3B and all this is without factoring in the sizeable international opportunity."

But Wait, There’s More

There is more that President Joe Biden could do beyond reclassifying marijuana to loosen restrictions on cannabis and help people who have been hurt by the war on drugs—and Rep. Earl Blumenauer (D-OR) made a list.

Blumenauer, who is retiring after this term, detailed nine executive actions that the president could take, including changing VA policies, altering THC-testing for truck drivers, reissuing the Cole Memo (cough) and updating FinCEN guidance.

What He Said 👇

The head of the IRS says cannabis industry banking access would make the agency’s job easier and given the DOJ’s decision to move marijuana to SIII, the agency needs to “understand the implications this will have on a variety of elements.”

“We shouldn’t just sit on our hands. We should be active in looking at what steps we need to take. We need to interact with this community to make sure we talk to them and understand.”

Stocks & Stuff

It was another nut-punch for U.S. canna as the sector has almost given back all of it’s gains since the news first broke of the DOJ’s rescheduling intention.

With new buyers sidelined and old buyers trapped frustrated, the space continued it’s drip back toward technical support. U.S. canna ETF MSOS finished the session -5.5% as it edged back toward technical support.

Below, we’ll chew through today’s price action, channel our inner Anne Milgram, kick off earnings season, finger the crosscurrents and take another lick at the neverending gobstopper that is our journey.

All that and more, just scroll down.

SPY 0.00%↑ QQQ 0.00%↑ IWM 0.00%↑ MSOS 0.00%↑ PT Notional: $156M/$107M

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