Victory Slap

Cannaland digests the news.

Daily Recap

The DEA has indeed made a historic decision to concur with the top federal health agency in proposing that cannabis move from Schedule I to Schedule III under the Controlled Substances Act (CSA), a spokesman confirmed late Tuesday.

“Today, the Attorney General circulated a proposal to reclassify marijuana from Schedule I to Schedule III. Once published by the Federal Register, it will initiate a formal rulemaking process as prescribed by Congress in the Controlled Substances Act.” —Justice Dept. Director of Public Affairs Xochitl Hinojosa

Of course, now the real work begins. The Office of Management and Budget (OMB) is reviewing the DEA’s decision ahead of publication in the Federal Register, a notice and comment period and a bevy of potential opposition lawsuits.

What to Expect

This was the first time that the DEA recognized the medical value and relatively low abuse potential of cannabis since prohibition was codified more than 50 years ago.

The move would eliminate research barriers and allow state-legal cannabis businesses take federal tax deductions. No changes are anticipated to state MMJ programs that are now licensed in 38 states or the legal adult-use markets operating in 24 states.

Industry stakeholders will now shift their attention to AG Merrick Garland and his long-awaited memo as this process continues to evolve.

Vice and Virtue Signaling

Senate Majority Leader Chuck Schumer (D-NY), Senate Finance Committee Chairman Ron Wyden (D-OR), Sen. Cory Booker (D-NJ) and a coalition of other Dem senators have officially reintroduced their bill to federally legalize marijuana.

While time is running out on the 118th Congress, they maintained they’re continuing their push to enact narrower legislation focused on allowing the cannabis companies access to banking services, which is an absurb conversation to be having at this point.

“Congress must do everything we can to end the federal prohibition on cannabis and address the longstanding harms of the War on Drugs.” (←not laying down is a start)

Stocks & Stuff

Turnaround was fair play in Cannaland today as concerns around the time horizon for rescheduling, coupled with the structural and technical conditions, reminded everyone why this space earned it’s reputation. U.S. cannbis ETF MSOS lost 15% on the session, albeit on half the volume we saw yesterdfay when it gained 25%.

Below, we’ll chew through the price action, take a comprehensive look at the Street’s reaction to the DEA news, finger five reasons why the space may have sold off today, look around the corner for the next catalyst and otherwise breathe after a wild ride.

All that and more, just scroll down.

SPY 0.00%↑ QQQ 0.00%↑ IWM 0.00%↑ MSOS 0.00%↑PT Notional: $445M/$290M

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