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- 💸 Happy Friday, Let's Finish Strong 💸
💸 Happy Friday, Let's Finish Strong 💸
Anthony Varrell
July 26, 2024
GM Everyone,
We have made it through another week in the cannabis space with mixed price action and everyone on pins and needles waiting to see if an ALJ hearing rears its ugly head. The hearing wouldn’t necessarily be negative towards the process but could potentially make it a longer process to get to a final ruling. We shall see what transpires in the coming weeks, but we have reason to believe the ALJ could be bypassed.
Today’s letter can be read in 7 minutes and 32 seconds.
What's Driving the Market Today?
Futures are up this morning, here is what traders are talking about:
Core PCE inflation expected at 0.1% for June.
Japan urges G20 to monitor FX fluctuations.
China's yuan falls despite economic stimulus.
Small caps outperform megacaps by 15% this month.
💸 High Impact
Rescheduling Is Picking Up Speed
The What - Adam Goers, Senior Vice President of Corporate Affairs at The Cannabist Company (Cboe CA: CBST, OTCQX: CBSTF), provided detailed insights into the company's activities and the broader cannabis regulatory environment. Speaking on the “Trade to Black” podcast this Thursday, Goers discussed the progress in rescheduling efforts, political dynamics, and market opportunities in states like Delaware and Virginia.
Goers emphasized the strong public support for rescheduling cannabis, with 92.75% of respondents favoring this standing during the comment period. “Rescheduling is incredibly popular,” Goers stated. This overwhelming support reflects a significant shift in public opinion towards cannabis legalization.
Understanding the political process is crucial for rescheduling. Goers noted, “The President of the United States has spoken about this publicly so many times, calling on his administration to expeditiously get this done.” He is optimistic about the timeline, predicting that the final rule on rescheduling will be established shortly after summer, with no Administrative Law Judge (ALJ) hearings required.
The Biden administration has played an important role in cannabis reform. Goers highlighted that both President Biden and Vice President Harris have been vocal supporters of this issue. “The President is there on this issue, but the Vice President is way above and beyond on cannabis reform,” Goers remarked. He believes that rescheduling will likely occur before the upcoming election.
Looking ahead, Goers remains optimistic but cautious. He identified the possibility of an ALJ hearing as a potential concern but emphasized the coalition's proactive efforts to address this issue. “We've articulated a case for why there should not be an ALJ hearing,” he explained. The industry is closely monitoring the administration's actions, with Goers noting, “Everything that we see in all the discussions we're having with the administration are positive.”
Delaware is emerging as a key market for The Cannabist Company, with Governor John Carney fast-tracking adult-use cannabis sales. The process is set to begin early next month, and the state expects to generate over $43 million in tax revenue. Goers expressed confidence in this development, stating, “Delawareans are going to be able to 21 and up, purchase adult-use cannabis, and they're going to be able to purchase at a cannabis store.” The company is well-positioned in Delaware, with established dispensaries ready to meet the demand.
Virginia's political situation is more complex, but there are hopeful signs for future cannabis legalization. Governor Glenn Youngkin has not supported adult-use cannabis, but Goers is hopeful that a new administration could change this stance. He highlighted Abby Spanberger, a leading candidate for governor, as a potential ally for cannabis reform. “Abby Spanberger is going to be governor, Democrats and Republicans involved in politics will tell you that,” Goers predicted. He anticipates that Virginia could see adult-use cannabis sales by mid-2026, marking a significant market expansion for The Cannabist Company.
Adam Goers' insights provide a hopeful outlook for the future of cannabis rescheduling and the strategic growth of The Cannabist Company. Public support for rescheduling is strong, and the political will is gradually aligning with this sentiment. The company's proactive stance in key states like Delaware and Virginia positions it well for future success
Big Takeaway
We are expecting things to pick up expeditiously in the next 30 days as it relates to the rescheduling process. We just need AG Garland to give us some signaling on the next steps, and we are confident he will. With the level of broad skepticism around the sector, which is warranted, the final rule for Schedule 3 being dropped will finally mark some change coming from Washington.
📈 Dog Walkers
Aurora Cannabis Bolsters German Footprint
Aurora Cannabis has received expanded licenses in Germany, allowing for more cultivation and research. This is on the back of Tilray being granted a similar license earlier this week. These licences should be seen as some green shoots starting to show for the German market. Profitability for the company is expected in 2026 or later, according to Wall Street estimates.
ACOP Backs Sensible Approaches To Cannabis
The American College of Physicians advocates for a public health approach to cannabis regulation. They recommend rigorous research on health effects, decriminalizing possession of small amounts, providing insurance coverage for treatment of cannabis use disorder, and incorporating cannabis education in medical training.
Beboe Lands In The Big Apple
Green Thumb Industries Inc. (CSE: GTII, OTCQX: GTBIF) Beboe is enhancing New York's cannabis market with premium, socially dosed edibles and vape products. These offerings aim to provide a high-quality, controlled experience for consumers, elevating the state's cannabis scene.
🗞️ 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
$CBST SVP of Government Affairs Predicts Rescheduling Timeline
What we covered:
✅ On todays episode, The Cannabist Company (Cboe CA: CBST, OTCQX: CBSTF) Adam Goers, Senior Vice President of Corporate Affairs for the Cannabist Company. TDR Trade to Black Co-Hosts Shadd Dales and Anthony Varrell will discuss the following with Adam:
✅ Rescheduling Discussion
✅ Political and Administrative Insights and ALJ
✅ Biden Administration’s Role
✅ Future Concerns and Expectations
✅ Delaware Update
✅ Virginia Update