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- 🪙 The Cannabis Industry Can Learn From Crypto 🪙
🪙 The Cannabis Industry Can Learn From Crypto 🪙
William McNarland & Anthony Varrell
June 27, 2024
GM Everyone,
With all eyes on the debate tonight, there is only one question that needs to be answered among our community: Will there be a question relating to cannabis, and if so, how will Donald Trump respond? There is only one way to find out. The stage is set, and the debate is finally here. Hopefully, we will get another 30 seconds of fame as we did in the SOTU, and the cannabis question we all want so much will be asked.
Today’s letter can be read in 8 minutes and 46 seconds.
What's Driving the Market Today?
Stock futures are slightly red this morning:
AI mania warning; Micron slides premarket after forecast disappoints.
Hedge funds slashing tech holdings aggressively, Goldman reports.
Fed's bank stress test optimistic; JPMorgan sees key measure differently.
SpaceX insider shares to sell at $112 each, valuing at $210 billion.
💸 High Impact
The Cannabis Industry Can Learn From Crypto
The What - The cryptocurrency industry, including companies like Coinbase and Ripple, has significantly amplified its political influence ahead of the 2024 elections. Crypto giants have been strategically investing in political campaigns, super PACs, and lobbying efforts to shape the future of cryptocurrency regulation in the United States. Their primary goal is to bridge the gap between policymakers and the cryptocurrency community, which they believe has been largely underrepresented in the political arena.
“It became obvious to us that they had almost no voice in the political process and that there was this huge disconnect between policymakers and this gigantic cross-section of the American public,” said Faryar Shirzad, chief policy officer at Coinbase. This realization has driven companies to actively participate in political financing, aiming to ensure that cryptocurrency interests are well-represented in Washington.
Crypto giants’ efforts are not just about gaining political favor; they are about ensuring that the dialogue around cryptocurrency is based on its merits rather than political bias. “We’re trying to de-politicize crypto,” added Faryar, who transitioned to the crypto industry from Goldman Sachs. “Our broader policy and political efforts are designed to allow us to have discussions on the merits.”
The Why - At the heart of this strategy is the belief that cryptocurrency regulation should not be a partisan issue. “At Ripple, we believe the future of the crypto industry is not really a partisan issue at all,” stated Ripple CEO Brad Garlinghouse. He pointed out that both Republicans and Democrats have shown support for policies that encourage innovation and compliance, which could help the U.S. reclaim its leadership position in the tech sector.
The crypto industry’s political engagement extends to supporting candidates who advocate for blockchain technology’s potential. A spokesperson for Andreessen Horowitz (a16z) stated, “We will continue to make contributions to candidates who believe in productive uses of blockchain technology.” This sentiment is echoed by industry leaders who see bipartisan support as crucial for the sector’s growth.
With the 2024 elections approaching, crypto giants are doubling down on their political investments. Their focus is on supporting candidates from both parties who prioritize clear and responsible regulation. “Our focus continues to be on supporting candidates on both sides of the aisle and in both chambers who will stop playing politics and pass clear and responsible rules of the road which will protect American consumers, spur American innovation, and grow American jobs,” said Coinbase spokesperson Emily Vlasto.
My Two Cents - You could easily swap out crypto for cannabis and all of the prominent VCs/company heads with cannabis industry execs, and the story would still read the same. Both industries are on the precipice of being legitimized while building out formidable industry footprints for years now, despite a complete lack of sensible regulation from Washington.
The bottom line is, we need to be doing more as an industry. I’ve been up to D.C., knocking on doors and speaking with politicians, and they are mostly in the dark in terms of the merits and false narratives around the cannabis space. Unfortunately, the key here is capital, as that is pretty much the only way to get in the ear of said politicians.
The gap needs to be bridged between the industry and politicians, and it needed to be bridged yesterday.
📈 Dog Walkers
High Tide Opens Another One
High Tide announced that they have opened another location in the GTA, in Mississauga. They picked up the incremental location for C$600,000, which is now formally Cantopia. The store generated C$2.3 million in top-line revenue and an AEBITDA of C$0.4 million based on the three-month period ending May 31, 2024. If I'm being honest, this is kind of an exotic way to spell this out, but accretive growth is good any way you want to spell it.
New Mexico Left Out In Cold
We all know that unlawful search and seizures are occurring in New Mexico targeting licensed cannabis businesses. Yet nothing is being done about it, and CBP continues to act outside of the confines of the law. Rep. Gabe Vasquez introduced an amendment to prohibit funds from being allocated to DHS to fund these activities, and of course, it was shot down by the GOP-laden rules committee.
CannMart Gets Picked Up
If you were around to see the circus that was Namaste, which is now Lifeist Wellness, you can appreciate this headline. CannMart, which was supposed to be the biggest thing ever in terms of Canadian retail, was sold off to Simply Solventless for C$2.5 million in cash, equity, and a vendor note. This looks like a brand consolidation play to roll up a few of the premier names in the extracts segment of the market. Somewhere, Sean Dollinger is punching air.
🔢 Number O.T.D.
20
That is the number of lawsuits the New York OCM is facing, with expectations of several more to be filed. This does not include any litigation involving hemp or the New York medical program.
🗞️ The News
📭 Research
Initiating Coverage: Green Thumb Industries - Download Here
Reconfirming Buy Rating: MariMed - Download Here
Initiating Coverage Of Verano Holdings Corp. - Download Here
Initiating Coverage: TerrAscend - Download Here
📺 YouTube
Live Don Murphy Washington DC
What we covered:
✅ Don Murphy updated us on the progress of the SAFER Banking Act, his take on Florida Governor Ron DeSantis comments on hemp, and if he thinks Mitch McConnel will pass safe banking during a lame-duck session.
✅ NCAA Votes To Remove Marijuana From Banned Substances List For College Athletes
✅ Cybin Inc. (NYSE CYBN, Cboe CA: CYBN) reports earnings