✅The Show Must Go On ✅

GM Everyone,

Yesterday allowed us to finally see the true colors of SAM, which were clearly red and white, reflecting the clown show currently going on under the circus tent they call "Smart Approaches to Marijuana." We saw just how volatile this sector can be when a tweet from Kevin Sabet sent stocks tumbling into the close—a tweet that absolutely had zero merit and reverberated around the sector for the rest of the day. The good news is that this tweet was just about as "fake news" as it can get. The DOJ came out and confirmed the S3 news on the same day, and we got to see just how desperate the opposition is becoming to stay relevant. Game on, 🤡🤡🤡🤡 .

Today’s letter can be read in 6 minutes and 08 seconds.

What's Driving the Market Today?

Stock market futures are flat this morning; these are the top highlights:

  1. U.S. 10-Year Bond Yield and S&P 500 Futures are showing shifts as the Fed's interest rate stance appears stable, with no hikes expected soon.

  2. Mixed U.S. job data and lower annual wage growth impact Fed policy expectations, calming bond market despite new Treasury issuances.

  3. UBS shares surged 8% after Q1 profits exceeded expectations, promising share buybacks despite new regulatory proposals.

  4. BP stocks declined as Q1 earnings fell 40% from last year, missing projections due to lower energy prices and refinery issues.

  5. Upcoming U.S. corporate earnings reports and significant treasury auctions could influence market directions further today.

Cannabis Stock Earnings Primer – May 7th to 9th 2024

Facts that matter:

  1. We outline the schedule for upcoming cannabis stock earnings reports and conference calls.

  2. For cannabis stock earnings, we will focus on revenue, debt, cash, and gross margin changes over the last quarter and year. 

  3. Join the TDR Live Streams to get Anthony and Shadd’s take on the cannabis stock earning reports.

Quick Hit:

Florida’s Cannabis Legalization Faces Republican Opposition

Facts that matter:

  1. Florida’s Republican Party and Governor Ron DeSantis oppose adult-use cannabis.

  2. Governor Ron DeSantis and GOP push back against cannabis legalization.

  3. Florida Supreme Court allows cannabis legalization vote despite GOP opposition.

Quick Hit: The Republican Party of Florida Chair, Evan Power, expressed opposition to the legalization initiative, stating, “We support killing the [marijuana and abortion] amendments as a party because it’s not good policy for the state.” In contrast, the pro-cannabis campaign Smart & Safe, represented by communications director Morgan Hill, emphasizes that the decision should be made by Florida’s citizens, not political insiders. Hill noted, “The decision to authorize the use of adult-use cannabis will be made by the citizens of Florida at the ballot box—not at a gathering of political insiders.”

Small-Cap Stock with Big Screen Appeal: IMAX Corporation

Facts that matter:

  1. Small-cap stock IMAX impresses with big-screen technology and brand recognition.

  2. IMAX shows potential as a small-cap stock with impressive financial growth.

  3. Small-cap stock IMAX, despite capital intensity, shines with influential technology.

Quick Hit: Financially, IMAX reported $367 million in revenue over the last twelve months (LTM), which is impressive considering their growth rate of 12% in the past year and a compound annual growth rate (CAGR) of 39.9% over the last three years. This growth, while strong, likely includes some distortions from the COVID-19 pandemic. The global cinema industry is projected to grow at about 5% annually over the next five years, which provides a decent backdrop for IMAX’s future expansion. As a small-cap stock, IMAX presents a unique investment opportunity for those interested in the entertainment industry.

$MSOS Mondays Was Lit

Yesterday on Trade to Black - MSOS Monday with Dan Ahrens of Advisor Shares to discuss news out of Washington on cannabis policy and the path forward on the SAFER Banking Act. We discussed comments from senators Chuck Schumer, Cory Booker, and Ron Wyden to learn about the path forward. We also shared what we are doing at TDR to prepare for the upcoming earnings season.