Weekend Update
Snippets from the week that was.
Following a two-week trip through Chicago, Ohio, Vancouver, Delta (with Village Farms/ Rubicon Organics)—and Baltimore for a quick-and-delicious Curio Wellness taste-test, I climbed back on the hamster wheel for a fresh five-session set.
The following is a sampling of Cannabis Confidential and if any of it speaks to you, please join us for a free trial when you’re done reading.
State Farms
U.S. cannabis is growing inside-out.
October 9th, 2023
States have made more than $5.7 billion in marijuana tax revenue over an 18-month period, per new Federal Census Bureau data.
The California Gov signed a bill that will block employers from asking about past cannabis use during interviews and vetoed legislation that would have allowed for cannabis cafes.
The Pennsylvania House approved a 280E tax cut for cannabis businesses.
While U.S. canna has retraced more than half of the post-HHS triple-digit two-week ripper, it’s worth remembering that the biggest domino already fell, the pullback has worked off overbought technical conditions and negativity is again good and thick
Riders on the Storm
Cannabis looks for a path in the global tumult.
October 10th, 2023
Connecticut set another marijuana sales record in September as monthly purchases exceeded $25 million for the first time.
Curaleaf, following TerrAscend’s move on the 4th of July, applied to list on the TSX (Toronto Stock Exchange)
[TSX, TSXV, NASDAQ and NYSE are carved out of MRB-custody restrictions, which is why Curaleaf did that small cap-raise a few weeks ago]
There’s the still-unresolved situation in the House re: the Speaker and whether he would be open to such a thing. We can speculate about potential backroom dealings—remember, SAFE is Dave Joyce’s baby—but the fact remains we won’t know until we know.
Which leaves us with the DEA response to the HHS recommendation and a potential Garland Memo, which is rumored to be “sitting in a desk drawer” waiting for the call.
There’s a school of thought which suggests that, if we work backward from next year’s presidential election and allow time for the requisite procedural steps, October began an active period for the red headline that’ll trigger phase II of this move.
The truth is that we don’t know when the next federal catalyst will arrive—or even from which branch—but that’s a question of duration vs. destination + we could make a strong argument that if nothing else, 280E will be gonzo by this time next year.
Truth Bomb
Keeping it real as we find our way.
October 11th, 2023
It’s a new day in the congressional waiting game as the U.S. House of Representatives took the first of several steps in their process to elect a Speaker and industry watchers obsessed about the implications of each and every headline.
We will segue to all things cannabis, digest the twisting turns of our market path, and delve into which stocks are best set-up for what’s to come, but first, some truth:
I love what I do. The ability to work in an industry I’m passionate about and meet the leading players/ taste the various products/ speculate on who'll emerge as the winners while helping/ advising clients, making introductions and advocating for federal and criminal justice reform—and actually walking that walk—is a blessing.
The fact that I get to write about it, which allows me to do something else I love, while at the same time collecting chapter + verse for the eventual book/ movie that’ll tell this wild tale one day (that nobody will ever believe is non-fiction) is a plus.
Next year will be 25 years of writing online in real-time, dating back to TheStreet.com in Y2K. That's a quarter century of sharing my streams of consciousness for immediate public synthesis; through the dot com bust and great financial crisis (+ the subsequent experiments); societal acrimony, social unrest and geopolitical conflict. All of it.
Why this walk down memory lane? In all that time, I have never been as befuddled as I find myself today. Nobody defended Al Qaeda after 9/11 or ISIS after Paris. But the day after the the worst slaughter of Jews since the Holocaust, pro-Hamas supporters marched across our streets, some waving swastikas; and twitter (X) was/ is worse.
Am Yisrael chai is a prayer for a united Jewish people to live together in safety, security and with unity and harmony. It isn’t anti-Palestine; it’s anti-Hamas, anti-terrorism and anti-genocide. It's the antithesis of decapitating Jewish babies or raping/ kidnapping Jewish teens/ elders.
I don't understand how there are 'two sides' to what is transpiring, or how the media ('freedom fighters') and our institutions of higher learning (Harvard et al) continue to normalize and equivocate, or why so many our 'celebrities' remain silent still.
Because it feels like #NeverAgain is happening now.
Should SAFER Banking pass through the full senate—which, having passed through committee, has already been signaled—it’ll be ripe to tack on to a must-pass bill, assuming of course our government doesn’t shut down forever.
Bruce MacDonald, the Chairman of C21 Investments, has extensive and impressive experience in the financial services industry. He recently addressed the most recent conspiracy theory suggesting that share creations provide a mechanism for manipulation.
Part II is here for those looking to educate themselves on the mechanics of MSOS; it is time well spent for anyone looking for context and nuance.
Freddy Benson Gomes from ATB
Dances With Wolves
Mapping a path through the crosscurrents.
October 12th, 2023
Colorado dispensaries have sold more than $15 billion worth of marijuana since they became the first state to legalize adult-use in 2012.
Early voting for the Ohio marijuana legalization initiative began on Wednesday as Buckeye Nation attempts to become the 24th state to go green and legalize adult-use.
Marijuana consumers who caught COVID had ‘better outcomes and mortality’ than nonusers, a study found, confirming what many of us already suspected but couldn’t articulate with a dry mouth.
More research exploring the efficacious ability of this magical plant can be found here.
Heard midday chatter that the senate will pick up SAFE next week(s), which would fit with the 'first week in November' stuff we picked up yesterday.
Gotta take that with a shaker of salt given how many nut-punches we’ve collectively endured but as I got hit, MSOS popped (+5%) so it seems that was going around…
…until the 1PM rug-pull when someone printed 224K MSOS (~$10M notional) through the bid, followed by ‘out loud’ offers intended to intimidate buyers.
It’s the same short-side script we’ve seen over and over again…
A PM I speak with speculated that ‘a fund is blowing up,’ which could help explain the moves in CURLF yesterday/ CBST today, as well as the the AM surge + reversal.
AGP on Ohio
Gorillas in the Midst
New money dips a toe in U.S. canna
October 13th, 2023
TerrAscend pre-announced positive results (again) and raised full year 2023 guidance for net revenues and adjusted EBITDA. The company also forecast both 50%+ gross margins and positive free cashflow from operations for the second half of the year.
Trulieve is claiming a refund of $143M from taxes paid which the company believes it doesn’t owe, although there’s no guarantee of receipt. This effort was driven by a legal interpretation that challenges the Company's tax liability under IRC Section 280E.
We’ve now heard from four sources that SAFE will see the senate floor by the first week of Nov.; what we don’t know is if they all heard it from the same person.
Arizona retailers sold $104M worth of legal cannabis products in July; Rhode Island sees record adult-use marijuana sales; New York will issue more than 1,000 new MJ licenses, New Jersey plans to promote delivery service to deter impaired driving
German lawmakers delayed their marijuana legalization bill debate due to the Israeli conflict, although enactment of the first part of the government’s legal cannabis plan is still expected by early next year.
First Pacific, a massive long-only fund, filed today in select U.S. Cannabis via swap agreements. Great to see but not a readthrough for a broader custody shift, yet.
[^ 1.85M GTBIF, 1.6M VRNOF, 2.4M CRLBF, 650K TCNNF]
Enjoy your weekend, stay safe and please remember to enjoy responsibly.
If you’d like to help Mission [Green] change federal cannabis policies, please click here.
CB1 has positions in / advises some of the companies mentioned and nothing contained herein should be considered advice.