Weekend Update
Tidbits 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, or the first three days of it anyway. There was a decent deeper dive in Setting the Table.
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.
Government Mule
Federal reform is taking it's sweet-ass time.
The Man who Cried SAFE (D-NY) says that bringing a marijuana banking bill to the floor is a matter of securing more GOP votes—a task he says is made more difficult by the fact that some lawmakers are afraid that their constituents, “particularly the older ones,” don’t want them to embrace reform despite overall majority voter support.
Sen. Majority Leader Chuck Schumer, meanwhile, continues to insist that the Senate is getting close to passing the legislation. “It’s bipartisan, it has support in the House, and we could make it law soon,” he said, misusing a word so often that it’d make both Merriam and Webster wince.
Staying in the Empire State, Sen. Kirsten Gillibrand (D-NY) is calling upon the Drug Enforcement Administration to act with “great urgency” to reschedule marijuana in line with the U.S. Department of Health and Human Services’ recommendation.
“I write to you concerning the rescheduling of marijuana under the Controlled Substances Act. While I remain under the strong conviction that marijuana should be descheduled entirely, I urge the DEA, at a minimum, to consider rescheduling marijuana from Schedule I to Schedule III substance.”
And New York Governor Kathy Hochul (D) signed legislation that’ll provide tax relief to NYC cannabis businesses that were blocked from making federal deductions under the infamous Internal Revenue Service (IRS) code 280E.
“This modification to income is appropriate because while the expenses of cannabis-related business cannot be deducted for federal purposes, New York law permits and encourages these businesses akin to any other legitimate business occurring in the State and the City’s business taxes should similarly encourage these business activities.”
Random Market Thoughts
It says a lot about the state of this space that one sloppy buyer or seller—be it MJUS or Traynor Ridge—can color the price action to the degrees that they have. I, for one, look forward to real cap tables and genuine order books.
200DMA cheat sheet: GTBIF $8.26; VRNOF $3.31, CURLF $3.33, TCNNF $5.11, MSOS $6.15; AYRWF $1.23; FFNTF $.18; CRLBF $1.64; TSNDF $1.68; CBSTF $.58
MSOS, the world's more vilified ETF, is now -5% YTD (-42% YoY; -55% vs. last year's Dec high; and 90% vs. ATH) as we head into the last six weeks of 2023. As it stands, the double bottom (on lower volume) remains in place above the 200DMA.
VIII Capital on U.S. Canna: “There are many things to be thankful for this season, and one of them might soon be the DEA.”
MOAR Insider Buying at TerrAscend. JW either can’t stop or won’t stop.
4Front Ventures Earnings + Call Notes
Setting a growth trajectory through Illinois.
Setting the Table
U.S. cannabis investors are hungry to eat.
Government officials from multiple countries, including the U.S., met in Germany today to discuss international marijuana policy issues as the host nation works to enact legalization.
The primary focus? To establish a global policy framework and give participants an opportunity to share their learnings as they position for the future.
“The old answers in cannabis policy are no longer effective. As in many other countries, more and more people in Germany have consumed cannabis despite bans and the illicit market has led to serious health problems. We, in Germany, will focus on consistent regulation… and youth and health protection.
Buck Melanoma
Ohio’s Senate president said that he is working with bipartisan lawmakers in both chambers to quickly develop and pass legislation to revise the state’s voter-approved marijuana legalization law before key provisions take effect next month, arguing it’s what “the public generally wants” bc voters ain’t all that smart (I’m paraphrasing).
Rob Moore of Scioto Analysis responded via Marijuana Moment, where he offered that reallocating money away from job training and substance abuse treatment and toward police efforts and jail construction would reduce the economic efficiency of marijuana legalization.
“Changing the use of these funds could potentially impact the economic efficiency of recreational marijuana legalization.”
Virginia Slims
Incoming Democratic majorities in Virginia’s House and Senate bring renewed hope to revive plans to legalize recreational pot sales in Virginia. This comes more than two years after recreational marijuana was legalized in the state but Governor Glenn Youngkin (R) took office and Republicans won control of the House in 2022, harshing mellows across the Mother of States.
Cheese Whiz
Wisconsin’s top Senate Democrat is asking the public to put pressure on the state’s Republican controlled legislature to hold a hearing on her bill to legalize cannabis.
“We know legalization is a popular policy in Wisconsin yet Republican legislators in the Capitol refuse to even schedule a public hearing for my bill. Republicans cannot continue to ignore the will of the people and they need to hear the voices of Wisconsinites!”
Cresco + Curaleaf both did the 200-day moving average dance today before they held + closed higher, which is good: the hungry troops always like to see the generals lead.
Random Thought
We should see some post-DEA bifurcation: the ‘dash for trash’ will have more near-term beta and real money will migrate to long-term leaders once pipes /custody open.
Matt “Shooter” McGinley at Needham on U.S. canna Q323 Earnings:
Giving Danks
Thankful for the plant and the people.
American support for cannabis legalization has soared to a new high of 70%, marking an increase from the 68% level that’s been observed in recent years. The new high-water mark cuts across all demographic and political groups, signaling widespread change in public opinion.
The latest result, from a Gallup poll conducted in October, reveals that a majority of Americans back legalization, 29% oppose, and 1% are still confused. In 1969, the year I was born and while Tricky Dick was POTUS, only 12% supported legalization but that number has grown like a weed over the last 54 years.
As the cannabis industry evolves, a new trend has emerged to capture the attention of enthusiasts and casual consumers alike: Green Wednesday. This phenomenon, which takes place on the Wednesday before Thanksgiving, is quickly becoming a thing in the cannabis community, akin to Black Friday in the retail world.
Which brings me to this, shared through the lens of gratitude is latitude:
The last few years, and these last six weeks in particular, have illuminated how lucky we are and perhaps, how much we (I) sometimes took that for granted. As this is the season for appreciation, I’d be remiss if I didn’t share the quiet parts out loud:
Beyond thankful for my wife Jamie, our three kids and the rest of my fam, who’ll tell you I’m more pleasant on the page than in person, particularly while navigating a prolonged bear market; and our lives would be incomplete without our pups.
I’m thankful for the people I’ve met in this industry—the hustlers, grinders and doers that continue to traverse an insanely difficult landscape despite the financial stress + opportunity costs. This extends to my team, our clients, and colleagues in the space.
I’m thankful for the opportunity to pen Cannabis Confidential and equally appreciative for those of you who are here for the right reasons—trying to learn and yes, also make money—while doing it the right way, with honesty, trust & respect, despite the many unique and valid reasons to be angry and bitter.
And thankful for YOU bc I know most of the last 1015 days have been akin to getting a full-thrust steel-tip kick to the groin all day and then waking up, swallowing hard and doing it again, all with the same stiff upper lip that used to shape your smile.
IDK what the holiday seasons brings in terms of news flow but with the elections less than a year out, 2024 should be a transformative stretch for the U.S. cannabis industry, and that's before we find out what happens with FL, PA, VA and MN, among others.
The hardest part about moving a boulder is the first two inches and while Schedule III wouldn’t be a magic bullet—as discussed, it has some good, bad and ugly aspects—it's a seismic shift nonetheless, and one that will facilitate further change.
As I said, much to be thankful for.
Enjoy your weekend, be safe and please enjoy responsibly.
/end
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.