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- 🗽 New York Is At It Again 🗽
🗽 New York Is At It Again 🗽
Anthony Varrell
June 12, 2024
GM Everyone,
Once again, the state of New York is in the news with allies to the social equity rollout alleging that Chicago Atlantic gave them a “bad deal” when looking at the structure of the capital deployed. Well, for all the critics out there, I would implore you to go and raise capital from a private equity investor with no experience and immense risk, and let me know what the deal terms look like. They will be stringent and sweeping with recourse if you fail. This is how the world works, Captain Obvious.
Now lets get to the fun stuff.
Today’s letter can be read in 9 minutes and 16 seconds.
What's Driving the Market Today?
Stock futures are slightly up this morning, all eyes are waiting on the Fed this afternoon, here is what is moving the market overnight:
Fed likely to maintain current rates with fewer cuts expected in 2024.
U.S. May inflation data shows slight dip, still a concern.
AI boom boosts S&P 500 and Nasdaq to new highs.
Euro weakens amid European populism fears, nearing 22-month low vs sterling.
10-year Treasury yield declines, indicating investor caution.
💸 High Impact
Ron DeSantis Is Highly Confused
The What - I used to have an immense level of respect for Governor DeSantis from my home state of Florida, but he has eviscerated every last ounce of credibility that he had over the last week.
Within a week, the Governor has vetoed SB 1698, which would have restricted the sales of hemp-derived products, allowing the market to continue to flourish, while also deploying the “Florida Freedom Fund” to fundraise against abortion as well as Amendment 3. Just so we're on the same page, yes, the Governor branded his fund to support legislation to limit his constituents' freedoms in the name of freedom.
The Governor has given reasons such as the smell of cannabis to reinforce why he's against adult use in Florida, but he's in favor of the smell of THC-O vapes and THC-A flower? With all due respect, sir, you are either completely F.O.S. or highly confused on the issue at hand.
Why It Matters - Florida is a major battleground state for the cannabis industry, and adult use coming online here would invigorate the industry with a serious growth catalyst. In this scenario, a rising tide would lift all boats, as the Sunshine State is forecasted to be up to a $6 billion adult use market and is currently around a $2.5 billion medical market. All of the major MSOs have a presence here and are counting on Florida to bring the growth narrative back into the numbers.
Fast Forward - A recent Fox News poll showed that over two-thirds of current Florida voters plan to vote yes on Amendment 3, which is a huge sign in the right direction heading into election day. However, this fight is far from over. Ronny and his gang are mobilizing to fight against Amendment 3 and stifle the progress we are all fighting to drive in the industry.
So get out and suport Smart and Safe Florida. #Yeson3
📈 Dog Walkers
The Cannabist Opens Richmond Location
The Cannabist announced the opening of their retail location in Richmond, VA today, bringing their grand total to 11 retail locations in the state. This is a top 5 market for them, and the Richmond location is in a highly populated area that will age nicely if and when adult use comes online sooner or later. They have 148,000 SF of cultivation and manufacturing to boot, making it safe to say they have quite a formidable footprint in Virginia.
Capital Raises Are Down In 2024
Viridian Capital came out with their aggregate deal numbers for 2024 at the midway point, and they were down 22% year-over-year to a whopping $811 million in total capital raised. This makes sense as we have seen most major MSOs greatly throttle down their capex spends while increasing profitability and FCF. I wouldn’t take this as a bearish sign whatsoever, as the right players have access to capital, and we just saw IIPR invest up to $43 million in AYR’s new Florida facility on Monday.
California Hemp Bill Introduced
Add California to the list of states that are introducing legislation to get a stranglehold on the intoxicating hemp market. AB 2223 has already passed the assembly floor with bipartisan support in May and would build off AB45, as well as require greater testing standards. This is yet another piece of legislation with the hemp industry in its crosshairs.
🔢 Number O.T.D.
$200,000
Thats how much Hollistic Industries got fined for knowingly selling moldy cannabis to consumers after their grow suffered an outbreak. DO BETTER GUYS.
🗞️ 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: Trulieve Cannabis - Download Here
📺 YouTube
Ohio Adult Use Market Deep Dive
What we covered:
✅ Market Projections & Potential: Ohio's cannabis market is expected to reach significant sales figures. Anthony Coniglio will share his estimates.
✅ Mergers & Acquisitions: See which companies are set for success and how mergers and acquisitions could shape Ohio's cannabis market.
✅ Cannabis Stocks mentioned in the Podcast Include:
Acreage Holdings Inc. (CSE: ACRG.A.U, ACRG.B.U, OTC: ACRHF, ACRDF)
Ascend Wellness (CSE: AAWH.U, OTCQX: AAWH)
Cresco Labs (CSE: CL, OTCQX: CRLBF)
Green Thumb Industries (CSE: GTII, OTCQX: GTBIF)
TerrAscend (TSX: TSND, OTCQX: TSNDF)
Trulieve (CSE: TRUL) (OTCQX: TCNNF)
Vext Science (CSE: VEXT, OTCQX: VEXTF)