Who's Schumin' Who?

Recency bias dominates the street

Daily Recap

There were a few incremental news items overnight for the cannabis sector, as well as a subtle yet seismic shift in the custody landscape.

Philip Morris is reportedly acquiring Cannabis inhaler developer Syqe Medical for up to $650 million. This follows the recent and still unsubstantiated rumors of a Cronos-Curaleaf-Altria throuple, as CPG seemingly circles the canna periphery.

Curaleaf is also seeking to reorganize it’s U.S assets in an effort to follow TerrAscend over to the TSX, no doubt fueled by the subsequent decision by Morgan Stanley to let their clients actually buy/ hold that stock. It has since been confirmed that a second large bank has followed suit (see below) which could/ should reverberate with time.

The price action? More of the same, which is to say slow, thin and rife with recency bias. With the senate set to say see ya next Friday, time is a-wasting for SAFE to find it’s way through committee. It’s been nary a week since Sen. Majority Leader Schumer listed cannabis banking as a legislative pre-summer break priority so if he fails…

…investors—or should we say, the handful of people who are able to own these names and still own these names—will brace for yet another cruel summer. Again, it’s sad, if not criminal, that a homegrown industry that employs 400K Americans/ pays billions in taxes is treated with such distain but therein lies the risk and yes, eventual reward.

SPY 0.00%↑ QQQ 0.00%↑ IWM 0.00%↑ MSOS 0.00%↑ PT Notional: $24M

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