Weekend Update
Snippets from the week that was.
The following is a sampling of the Cannabis Confidential content—paragraph grabs, charts that stood out, interesting happenings and other stuff— from last week. You can click on the title to access any article; most stock stuff is behind the firewall and you can access a free trial by clicking below. Thank you for your support.
Swing States Cometh
Ohio & Florida eyeball U.S. cannabis
Monday, November 6th 2023
While this week will be all sorts of busy—Ohio, Florida, Virginia + Verano, Village Farms, Green Thumb, Trulieve, Curaleaf earnings—it’s the news that we don’t know—timing of DEA, fate of SAFE, depth of Garland Memo—that’ll most influence our year-end path.
Still, this week started with solid news as Organigram announced a large investment from British American Tobacco and the creation of a strategic investment pool.
VIII Capital on the deal: “bullish read-through for rescheduling,” + “a high degree of confidence cannabis will be moved to Schedule 3 with an announcement potentially coming at any moment now."
Tin Soldiers and Nixon Coming
Ohioans vote to free the plant.
Tuesday, November 7th 2023
Ohioans are voting as we speak and if they approve adult-use cannabis, the Buckeye State could reach $2B in annual sales. In addition to being a huge swing state ahead of next year’s presidential election, it also borders Pennsylvania and it’s 13 million residents, where another $4B in annual adult-use sales likely awaits.
President Joe Biden is trailing in many battleground states and “needs all the help he can get to appear younger and more in touch with the times,” said an industry insider who spoke with Will Yakowicz at Forbes today, “Biden needs weed.”
The Marijuana Justice Coalition and the Cannabis Freedom Alliance sent a letter to the President, arguing that the administration’s plan to federally reschedule cannabis from Schedule I to Schedule III “would maintain the federal criminalization” of state-legal cannabis programs.
Jason Wild Unleashed: TerrAscend’s executive chairman talks about cost-cutting, transitioning to adult use and markets where he sees the most opportunity.
Verano Earnings + Call Notes
Wednesday, November 8th 2023
The Green Wave
The U.S. wants it's cannabis now.
Wednesday, November 8th 2023
Ohio voted to legalize adult-use cannabis, becoming 24th state to do the right thing as the trend of more conservative states adopting a legal framework continues. 53% of the U.S. population now lives in a legal market domain and Senator Sherrod Brown, Senate Banking Chair, and Rep. Dave Joyce, GOP sponsor of SAFE, both live in Ohio.
Opponents of a petition to decriminalize recreational weed in Florida found a hostile state Supreme Court bench on Wednesday in a case that has huge implications for the cannabis industry, Florida election law, and next year’s election. Bloomberg Law has reported that the Florida Justices are poised to approve the recreational pot petition.
Democrats retook full control of the Virginia General Assembly, handing a defeat to Gov. Glenn Youngkin, a Republican who spent a shit-ton of money with the hopes of creating a majority for his party in both houses of the legislature. The results, as we touched on yesterday, open the door for lawmakers to legalize retail cannabis sales.
Support for marijuana legalization has reached a new record high nationally, with seven in 10 Americans—including a sizable majority of Republicans, Democrats and independents—now backing the end of prohibition, according to a Gallup poll. The level of support is at its highest level since Gallup began tracking public opinion.
As the U.S. cannabis industry awaits the rescheduling decision from the DEA, many countries around the world—Germany, Thailand, Colombia, the Czech Republic and Switzerland, among them—continue to liberalize their cannabis policies as a superior method of promoting the health and welfare of their citizens.
As we’ve said before, these report cards (earnings reports) are worthy-enough updates on who’s doing what, how and with whom, but the market is resolute in it’s focus on the levers of CF generation and more importantly, the timing thereof.
Feels like residual liquidation supply is still out there in the three Camigos (Cresco, Curaleaf, Cannabist) but the timing of a cleanup is unknowable; if inventory is still being unwound, one would think the other side (short MSOS) is unfinished biz too.
Ohio offered a snapshot of why we say canna opposition continues to age out and in the process, provided President Biden incentive to move on this issue < election.
Green Thumb Earnings + Call Notes
Wednesday, November 8th 2023
Trulieve Earnings + Call Notes
Thursday, November 9th 2023
Juggles-R-Us
Cannabis digests a slew of news.
Thursday, November 9th 2023
Ohio voters decided Tuesday to legalize adult-use cannabis by a 14-point margin but the General Assembly will have the last word on what becomes law regarding Issue 2 and cannabis use in the long-term. Those talks have already started and we’ll take a closer look at some of the potential discussion items.
Month-over-month legal cannabis sales in Maryland fell slightly in October but the sales of adult-use products, which began in July, were stronger than ever. Licensed retailers sold $90M+ in combined medical and retail cannabis products in October; about a third ($35 million, or 39%) came from medical while adult-use tallied $55M.
Nearly 100,000 marijuana convictions have been expunged from government records of Missouri residents as part of a constitutional amendment state voters approved a year ago. Misdemeanor marijuana convictions were supposed to be expunged by June and most felony convictions are scheduled to be expunged by December.
More than half of Americans live in places where recreational marijuana is legal
Curaleaf Earnings + Call Notes
Thursday, November 9th 2023
TerrAscend Earnings + Call Notes
Thursday, November 9th 2023
Green Shoots
U.S cannabis is on the move.
Friday, November 10th 2023
Speaking at a cannabis industry event, former Food and Drug Administration (FDA) official Howard “Sklammy” Sklamberg said he’d be shocked if the Drug Enforcement Administration doesn’t reschedule marijuana by next year’s presidential election.
“I would be really shocked if it took the DEA longer than the second quarter of next year to come up with its final rule. Even when I was at FDA, we knew that important regulations you wanted to get done in an election year needed to get done the summer before.”
With Ohio becoming the latest state to legalize marijuana, there’s a renewed sense of urgency to follow suit in neighboring Pennsylvania, with the governor’s office calling it “another reminder” of the need to enact reform. Five out of six bordering states—Delaware, Maryland, New Jersey, New York and Ohio—have already flipped green.
“It is past time for the Pennsylvania legislature to join our neighbors and legalize cannabis to ensure safe access, right the wrongs of cannabis prohibition, and stop tax revenue from bleeding outside of the borders of the Commonwealth.”
Wednesday marked one year since Missourians voted to legalize adult-use cannabis and the Show Me State has shown out. In the nine months since MJ sales started, the fledgling million-dollar industry has morphed into a billion-dollar industry with sales growing from $605M in December 2022 to more than $1.5B in September 2023.
From a pure price action standpoint, today was a potentially meaningful session as we managed to push past double secret probation (clear the 100/200-day moving averages) in everyone’s favorite whipping boy, MSOS…
…meaning the vaunted double-bottom on lighter volume remains in place—a textbook bottoming formation for those who don’t stare at screens all day—and with the 200-DMA now underfoot, we’re back into the “buyers are higher” zone.
Earnings Part Deux:
Enjoy your weekend, be safe, hug a kid/ pet and please consume responsibly.
/end
CB1 has positions in / advises some of the companies mentioned and nothing contained herein should be considered advice.