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 the title to access any article; most of the insight and analysis is behind the paywall and you can access a free trial by clicking below; thanks for your support.
Slap Happy
U.S. canna defends a big level.
February 5, 2024.
Since news broke in August that the U.S. Department of Health and Human Services had formally recommended moving cannabis to Schedule III from Schedule I, the cannabis industry has been waiting with bated breath for genuine federal reform.
Adam Goers, Cannabis Scheduling Reform Coalition co-chair, thinks we’re close:
“If it were to happen tomorrow or sometime in March, I would not be surprised.”
Green Shoots
A Virginia House subcommittee advanced amended legislation that’d allow existing medical marijuana dispensaries and some small businesses to begin selling adult-use cannabis next January, with plans to license other retailers over the course of 2025.
Yo Adrian!
Chatter abounds that change is afoot.
February 6, 2024.
Gallup reported a significant increase in the U.S. public’s support for the legalization of cannabis over the past six decades, rising from 12% in 1969 to 70% in 2023.
I was born in 1969 but correlation does not equal causation.
Keystoner State
Pennsylvania’s governor says he’s “sick and tired of losing to friggin’ Ohio” on issues such as marijuana legalization and he’s calling on the legislature to deliver a cannabis bill so the commonwealth can “catch up” with neighboring states.
It’s estimated that launching adult-use would drive $15M in tax revs the first year.
The Tweet that shook the canna space on Wednesday, 11:19 AM:
Chatter Box
I have it on good authority that the Traynor Ridge unwind is complete.
It’s speculation ofc but a solid source and supported by ginormous CBST prints late.
Simon Says: 45% of the MSOS open interest has a March Expiry
He Said, She Said
Bickering belies the bigger picture.
February 7, 2024.
Amid swirling rumors about the possibility of an imminent announcement from the White House on cannabis policy, an anonymous Biden administration source told Marijuana Moment late Tuesday that they would “wave off” that speculation.
We remind readers there will likely be multiple headlines from various branches of the government over the next several months. While few outside the inner sanctum know the precise timing, those close to the situation continue to suggest that multiple initiatives remain in play.
PA System
Pennsylvania Gov. Josh Shapiro (D) urged lawmakers to legalize and tax adult-use marijuana. Shapiro’s budget proposal for fiscal 2024-2025 would create a 20% tax on the wholesale price of cannabis products sold within the regulated system, with sales expected to start in 2025.
"Ohio, New York, New Jersey, Delaware, and Maryland- practically all of our neighbors- have legalized marijuana. We're losing out on an industry that would bring in more than 250 million dollars in annual revenue. And our failure to legalize and regulate this only fuels the black market and drains much-needed resources for law enforcement.”
How bout them Apples?
Canna sales in Massachusetts were up by $78 million in 2023 vs. 2022, which was a 5% increase and the sixth straight record-setting year. December was also the best month ever with $140M in sales, surpassing the previous high-water mark set in August ‘23.
The Matrix
Fresh off yesterday’s simulation of a session, Marijuana Moment pubbed a story that quoted an anonymous White House source who '“waved off” speculation of a DEA announcement this week.
While we can confirm the source behind yesterday’s oh-by-the-way-this-thing-could-actually-happen-this-week was as real as real gets—true story, top of the totem pole—there is some nuance around what, precisely, that person was referring to.
In particular, there’s more than one cannabis-related announcement forthcoming.
The DEA proposed rule will come from… the DEA, of course, bc 1. they’ll announce their own findings and 2. even if this is a political process, the last thing the admin wants is for it to appear overtly political.
The White House has their own content slate between here and the election, likely focused on Biden’s thus-far unkept criminal justice promises.
If/ when they issue a presser on clemency, that shouldn't be viewed as negative; it should be celebrated (bc it’s criminal justice!) and understood to be one piece in a much broader political puzzle.
^ the DEA, WH (clemency), DOJ (Garland) + Congress all have separate, albeit loosely interconnected, agendas.
The composition of volume remains a driving factor in this ongoing process of price discovery as the fast-and-loose crowd has a tendency to ‘ready, fire and aim.’
Triggered!
Emotions run high as patience wears thin.
February 8, 2024.
Congressional researchers acknowledged that the lack of banking access for state-legal marijuana businesses leads them to be “heavily reliant on cash transactions, making them a target for theft.”
They noted that the Senate Banking Committee passed the SAFER Banking Act last September but the measure is still pending action on the floor. Earlier versions have cleared the House in some form at least seven times in recent sessions.
F*ck Cancer
A cannabis extract has shown positive results in slowing down melanoma cell growth and increasing cell death rates, a new in-vitro study finds.
Researchers from Charles Darwin University and RMIT investigated programmed cell death caused by a specific cannabis extract (PHEC-66) from the cannabis sativa plant.
MSOS traded off 6% early Thursday and our switchboard lit up:
Big Earl doing Big Earl things:
Freddy Benson Gomes of ATB on the Pennsylvania Opportunity:
Great Expectations
U.S. canna looks ahead.
February 9, 2024
More American cannabis legalization progress has been made in the past three years than in the fifty years prior. The juggernaut of states embracing canna has exploded and the momentum is expected to continue as research expands and society educates themselves about the wellness properties of earth’s medicine.
Hoos times Twos
Virginia’s House of Delegates gave preliminary approval to a bill that would legalize and regulate the retail sale of marijuana in the commonwealth, with a final vote on the measure expected early next week.
A competing measure is advancing in the Senate, having passed out of committee on Thursday. If both bills clear their respective chambers, lawmakers will either need to pick one or work to merge provisions of the two together.
In the Navy!
Amid the U.S. military’s ongoing recruiting crisis, the Navy is expanding authority to grant waivers to recruits who arrive at boot camp and test positive for cannabis. The Navy said the goal of the change is to be “reflective of where legislation is in society.”
Lipizzaner Stallions
"May I have your attention please, crew of the Alabama, Mr. Hunter has brought it to my attention that Morale maybe a bit low and you might be a bit... on edge. So, I suggest this: any crew member who thinks that they can't handle the situation, can leave the ship right now. Gentlemen, we are at DEFCON 3, war is imminent. This the captain. That is all.”
As I didn't have anything awe-inspiring or earthshattering to share this morning, I pulled this gem from Capt. Ramsey given all of the drills we’ve endured this week.
Like him, I didn’t know if Cannaland needed a kick in the ass or a pat on the back.
On the one hand, the infighting, name-calling and premature evacuation of GIFs echoes the jr. high school behavior of prior cycles and if we don't learn from our past, we'll be destined to repeat it.
On the other, after three straight years of getting nut-punched, it's hard to blame bulls for letting out a squeal of pleasure relief; it's almost a Pavlovian response at this point.
I don't know if anyone has the answers but I do know that coming into today, MSOS was +39%, Trulieve doubled, Jushi too; AYR was +70%, etc... and it's February 9th.
While there’s been an outsized amount of stress surrounding when we'll hear from the DEA + Garland, that should be less of a focus than the fact that historic change is afoot and the math still suggests a 2-3x turn—as long as those headlines hit, as expected.
Enjoy your weekend, stay safe and please enjoy responsibly.
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CB1 has positions in / advises some of the companies mentioned and nothing contained herein should be considered advice.