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- 👀 Cannabis Is Now A Presidential Issue 👀
👀 Cannabis Is Now A Presidential Issue 👀
Anthony Varrell
July 23, 2024
GM Everyone,
Paging Joe Biden, come in Joe Biden, has anyone seen Joe? Unfortunately not, since over the weekend we saw a post on X saying that he was dropping out of the race and endorsing Kamala. This was great for the cannabis space but is starting to create a narrative that might not be good for the Harris campaign. The next week or so is going to be telling in this process, and it would be best for the country to clean this up and focus on the road ahead as it relates to campaigning against Donald Trump.
See you on the other side.
Today’s letter can be read in 8 minutes and 09 seconds.
What's Driving the Market Today?
Futures are flat this morning, below is what traders are focused on:
Harris Has Enough Delegates to Clinch Nomination for President
Wall Street’s focus turns to tech earnings.
Alphabet to report Q2 growth; ends talks with Wiz on $23B deal.
S&P500 and tech sector rebound; VIX volatility gauge drops.
Treasury yields remain steady amid heavy debt auctions.
💸 High Impact
The Current State Of The Cannabis Sector
The What - If you have been in the cannabis space for some time now, you have learned to roll with the punches and hopefully take some profits on the rallies. It's cool to not have diamond hands and actually make money trading, despite what some might think. 😘 As of this morning, we are officially out of the comment period as it relates to rescheduling, and one would have to assume the next step is to see if an ALJ hearing is going to be announced (we are now on pins and needles).
If we do see a request for a hearing in the next couple of days, it could signify that the process is going to be longer than expected. If not, it's anyone's guess as to what we see next, as that would give way for the powers that be to expedite the implementation of a final rule. This would not only cement the catalyst that we have been waiting for but also give the Harris ticket a trophy to put on the shelf.
For those who say that cannabis will not show up as a talking point or have any relevance in the campaign, I give you Exhibit A above. It was great to see that they are leveraging cannabis in their communications strategy, but there is a big problem here. They are using the past tense “reclassified” and they haven’t done a damn thing but start the process of reclassifying yet. One can look at this two ways: they are either lying again and using cannabis reform as a carrot, or behind closed doors, rescheduling is a done deal and Garland is going to hammer this one for the Dems to get that win. I am somewhere in the middle as of this morning.
AGP in an official note yesterday: "We view VP Harris as the Democratic nominee as favorable for the prospect of a final rule on rescheduling ahead of the election."
The Why - Man, was it good to see the rally that took place yesterday. Some would say that we were making back up the ground we lost on Friday; others might say it was the beginning of the Kamala rally. I don’t care what you call it, we had a green day across the tape. Yes, volume was still lackluster, but a positive headline had positive follow-through in the market and for that, I am thankful. Canopy Growth led the way up 17% on the day, TerrAscend ended the day up over 12%, and then a mixed bag of MSOs were up between 5-8%.
Today is going to be telling to see if we can get some follow-through and this is not one of our short-lived pops in the sector that we have seen so much of. From a fundamental aspect, Ohio is ready to go and adult use COs have been granted to cultivators and processors signaling that the market is imminently coming online. We are hearing whispers that PA adult use is still intact but this is something everyone is sick of hearing about. Show us. Also, Florida is tracking to get Amendment 3 passed on the ballot come November.
If we can land all of these, we are back, baby. If not, it’s going to be a tough couple of years for the sector as the air would presumably be sucked right out of the room.
📈 Dog Walkers
Tilray Expands In Germany
Tilray was up 7.26% yesterday on the back of an announcement of the granting of the first cultivation license under the current German regulatory framework. The license will enable them to expand their cultivation capacity by fivefold and expand the depth of strains they are able to produce by a factor of 10 to 31 strains. We will be looking out for commentary from Irwin on the earnings report on 7/29 for updates on Germany.
Ethereum ETF Launch
As of this morning the trading of spot ETH ETF’s has begun. There is much to be determined as to the demand for ETH compared to what was seen with the launch of the BTC ETF’s. Its pretty much the same top names from the BTC launch now getting into the ETH game.
MariMed Doubles Maryland Grow Capacity
MariMed Inc. (CSE: MRMD, OTCQX: MRMD) has doubled the flower capacity of its Maryland cultivation facility, preparing for retail and wholesale distribution by Q4 2024. The facility expansion includes nine new grow rooms and aims to meet increasing demand for MariMed's flower, concentrates, and edibles. Read the full article on the TDR Website!
🗞️ 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
MSOS Monday - What Kamala Harris Would Mean For Marijuana Stocks
What we covered:
✅ Co-hosts Shadd Dales and Anthony Varrell will discuss the big stories affecting Cannabis, including President Biden stepping down, and how the news is expected to affect Marijuana Stocks.
We will also examine why a Republican senator is questioning the transparency around rescheduling.
We will also look at Tilray Brands Inc.'s (NASDAQ: TLRY) progress in Germany and what it means for long-term European expansion.