Weekend Update Unlocked
Tidbits from the week that was.
The following is a sampling of Cannabis Confidential content—random paragraph grabs, charts and notes, interesting happenings and other stuff— from last week.
You can click through the title to access any article; most stock stuff is usually behind the firewall + you can access a free trial by clicking below; thanks for your support.
You Booze, You Lose!
Canna is coming for your Liquor.
January 29, 2024
“I lost a lot of friends with alcohol; I made a lot of friends with weed.” - Snoop Dogg
Increasingly popular alcohol breaks such as Dry January are helping to buoy the emerging U.S. cannabis market as more drinkers—especially younger ones—are perceiving cannabis to be a healthier and more enjoyable alternative to booze.
Research indicates that about a third of the Americans under the age of 25 who are doing the start-of-the-year detox are using cannabis. Weed sales also tend to rise more in January than in other months across states that are legal, per Bloomberg.
“Anecdotally, we’ve got a lot of people coming into our stores saying they’re not drinking for January and they’re upping their cannabis purchases.” Matt Darin, CEO Curaleaf
AGP on U.S. Cannabis comps vs. CPG & High-Growth Retail:
CB1 Capital U.S. Canna Comps (coming in today)
Just do it!
U.S. Senators advocate for change.
January 30, 2024
Senate Democrats are putting new pressure on the Biden administration to ease the federal restrictions on marijuana in a new letter to the DEA Tuesday as it considers rescheduling cannabis after it was federally classified more than five decades ago.
The letter, from 12 senators led by Elizabeth Warren, D-Mass., and John Fetterman, D-Pa., and signed by Majority Leader Chuck Schumer, D-N.Y., plainly states:
“The case for removing marijuana from Schedule I is overwhelming. The DEA should do so by removing it from the CSA altogether, rather than simply placing it in a lower schedule.”
Buckshot
Ohio regulators have released an initial batch of proposed rules for the state’s adult-use marijuana program, focusing on requirements for applicants seeking to become licensed retailers, as well as certain changes to the medical cannabis system.
The timeline for legal sales will be one of the areas that’ll garner the most attention, as Governor Mike DeWine (R) wants the legislature to speed up that part of the law.
Call of Duty
Six in 10 active duty military service members and veterans—as well as 85% of military family members—support legalizing cannabis, according to a new study that surveyed 1,168 people on their attitudes around recreational drug legalization.
“The results showed that a majority of individuals, regardless of veteran status category, supported the legalization of recreational marijuana.”
Joe’s Knows
Twofer Tuesday
U.S. canna bulls fired up Turnaround Tuesday with one mission in mind and that was to put MSOS $10 underfoot and establish a ‘higher high’ vs. the Sept. intraday print.
The stakes are massive: push through, MSOS breaks out and previous SAFE highs ($15) come into view; fail, and the double-top crowd would begin to get loud.
MSOS—the proxy, the pipe, the Trojan Horse—found sponsorship late in the session which in and of itself is a notable 2024 tone shift, and the space edged higher into the close. Take that, Karl Marx.
Revenge of the Herbs
U.S. cannabis wins January.
January 31, 2024
Scientists say they’ve identified an alternative way to test for recent marijuana use that’s significantly more accurate than standard THC blood tests that sometimes misrepresent a person’s potential impairment depending on frequently of use.
“Since THC accumulates and lingers in fat tissue, daily cannabis users may maintain constant elevations of THC in the blood long after the psychoactive effects abate.”
Fernando Mónica the Bull
Spain’s newly appointed health minister said that the country’s long-awaited medical cannabis law will be ready ‘in the coming months,’ as she makes good on her promise to kickstart progress.
Mónica García Gómez used her first appearance in Congress to reaffirm her pledge to establish a medical cannabis framework more than a year after it was scheduled.
Book’em Danno!
A marijuana legalization measure unveiled in draft form last year by Hawaii’s AG has been formally introduced in the legislature, with companion bills filed in both House and Senate. Advocates insist the latest version needs to shift the focus away from law enforcement and allow for the clearing of past cannabis convictions.
Mean, Mean Pride
The animal spirits were aided today by this tweet by GMR’s John Schroyer, who said, “Source out of D.C says rescheduling is “imminent.”
[John, lest you forgot, posted a tweet on July 31st sharing speculation from well-placed observers that the Biden Administration would move canna to SIII, so there’s that]
That was enough to trigger a 5% spike in MSOS, which was enough to trigger a spate of celebratory GIFs across my timeline, which was enough to bum a numble man out—we got less that a quarter from the MSOS Sept. high before the bulls exhaled.
We enter February with great expectations for federal movement and earnings lurking the last week of the month. Still, taking a moment, we’ve long said that the buyers are higher and FOMO would one day return to the space if the right cards turn.
The dealer is shuffling the deck, so stay tuned.
They got little hands, and little eyes, and they walk around, tellin' great big lies…
“Short Interest of MSOS is at an all-time high on both market value and per-share basis. Short sellers doubled down on a losing trade after the HHS rescheduling news on Aug 29. 10.4M shares were short in August before the HHS news; today 21.3M shares are short.
The difference is 10.9M shares = $100,000,000 of short positions are currently deep underwater.” WeedStreet420
Pimple Patch
U.S. cannabis is breaking out.
February 1, 2024
A second Virginia Senate committee has advanced a bill to legalize retail marijuana sales in the commonwealth, moving the proposal one step closer to the chamber floor.
The panel also approved a separate measure that would resentence people who are currently incarcerated for cannabis-related crimes.
Land of 10,000 Bakes
Officials in Minnesota hope to begin issuing temporary licenses for the state’s legal marijuana industry ahead of schedule—”as soon as this summer”—with an emphasis on aiding social equity applicants, they said this week while providing an update on the implementation of an adult-use legalization law adopted last year.
Alone Star State
The Republican attorney general of Texas is suing five cities over approved local laws to decriminalize cannabis, vowing to overrule the “anarchy” of “pro-crime extremists” who advocated for the reform. OK, Boomer.
The Double Digit Midget
After winning January, U.S. Canna tossed the ball back to the mound and jogged to the dugout, understanding they don’t hand out World Series rings a month into the season, even if the previous three seasons were a slump-for-the-ages.
In nine days, it’ll be the three year anniversary of the U.S. cannabis top, as measured by the MSOS and if you’re new to this space, lemme tell you that it has been one hell of a journey with an abundance of self-inflicted wounds opportunities to learn.
Through that lens, the recent run, as well as the almost unhealthy fascination with the $10 level, is put into the proper perspective—January was a solid step on the road to redemption but a good trip is still contingent on several catalysts (SIII, SAFE, FL).
Volumes arrived early + ran above-average all day. Sentiment benefitted from a series of X’s from reporters in the space talking about how sources were telling them that SIII was “this month” and to “be ready for the decision at any time.”
Assume the Position
As discussed in this space, we’ve rotated some ‘toes’ (overage in overbought names) into ‘heels’, or ketchup plays, such as Jushi, Cannabist, 4Front + some listed proxies—MAPS, GRWG etc.—and a few Canadian LPs on the NYSE (←rental vehicles through upside tails via March/April paper).
None of this is advice, of course; just trading around a thesis and looking for beta-on-the-margin as we hold our cores, much of which will likely be headline-dependent.
Freddy Benson Gomes of ATB separating himself from the pack:
Pump up the Volume
Volumes surge in U.S. cannabis
February 2, 2024
The leaders of Germany’s coalition government said they’ve reached a final agreement on a bill to legalize cannabis, resolving outstanding disagreements that delayed action and setting the stage for a vote in the final week of February and enactment in April.
“We agreed on the final details cannabis of legalization last night. The fight against the black market, decriminalization and better protection of minors will come as announced.”
“The previous drug policy has failed, this is a new beginning.”
Relief Pitcher
Findings from the BI 2024 Cannabis Survey revealed the shift toward cannabis as a substitute for traditional painkillers and alcohol and a preference for smoking and edibles among consumers.
“We’re witnessing a considerable pivot in consumer habits, with 32% of our survey participants choosing cannabis over painkillers and 33% over alcohol.”
How Was Your Week?
I’m a sucker for a good GIF + an even bigger sucker for anything Mel Brooks-related, which might explain the schism b/w Gene asking Teri to put the candle back while the simple truth is that the candle was never there to begin with.
By there, I’m talking about a close over the 100-week moving average so mazel to the MSOS as this bodes well through a longer-term lens—and with each added technical trophy, the animal spirits/ crypto crowd/ technical types/ FOMO freaks gain strength.
Enjoy your weekend, be safe and please 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.