💸 High Impact

The Implications Of A Rate Cut

Yesterday’s 50-basis-point interest rate cut was a jolt to the market—and not the espresso kind, but rather the market-friendly caffeine that traders have been waiting for. With central banks signaling a softer stance, we’re moving toward what’s known as a "risk-on" environment. Historically, this is music to the ears of small-cap stocks, which tend to outperform in such conditions.

When interest rates fall, borrowing becomes cheaper for companies, particularly the smaller ones. These small-cap companies (think Russell 2000 constituents) are more sensitive to borrowing costs than their large-cap counterparts because they often rely heavily on debt to fund expansion. With lower rates, their financing burdens lighten, leaving more room for growth, innovation, and—hopefully—profits.

Historically, after a rate cut, small-caps have rallied. According to data from past rate-cut cycles, small-cap stocks outperformed large-caps in the 12 months following similar monetary policy shifts. So, if history is anything to go by, the Russell 2000 might start looking a little more attractive.

A "risk-on" environment is basically market speak for, "It’s time to chase returns." In these periods, investors tend to shift from safer assets (bonds, blue-chip stocks) to riskier ones like small-cap equities and emerging markets. The reason is simple: when borrowing is cheaper, companies with higher growth potential (and higher risk) seem more attractive.

Lower interest rates also tend to push money out of safe havens like Treasury bonds, which become less appealing when yields fall. As the money flows out of bonds, it often finds a home in equities, especially those with higher risk-reward profiles. This is where small-caps enter the chat, promising high growth—albeit with a side of volatility.

With the latest rate cut, expect capital to rotate toward sectors that benefit most from easier monetary conditions. Small-cap stocks, which are traditionally more volatile, stand to gain as investors get bolder in their quest for returns.

But this isn’t just about small caps. A 50 bp cut signals that the central banks are leaning toward a more dovish stance to support economic growth. This could also mean a tailwind for sectors like cannabis and biotech, which are heavily represented in small-cap indexes. We might see more speculative growth companies gaining traction, as the market embraces risk.

📈 Dog Walkers

Georgia Pharmacy Defies DEA

In a bold move, a Georgia pharmacy has begun selling medical marijuana to patients, openly defying warnings from the DEA about federal law violations. The state’s Board of Pharmacy authorized the sales, arguing that Georgia's medical cannabis program, established in 2015, allows licensed dispensaries to legally provide medical marijuana to patients. This development highlights the ongoing tension between state-level cannabis legalization and federal prohibition. The DEA has made it clear that cannabis remains illegal under federal law, but Georgia seems unfazed, putting patients' access first.

Original Article - MM

Trulieve Expands To Lake Worth

Trulieve Cannabis Corp. has expanded its footprint with a new medical cannabis dispensary in Lake Worth, Florida. The grand opening is set for September 27, featuring music, discounts, and education on cannabis, including the #YesOn3 initiative for adult-use legalization in Florida. Located at 4660 Hypoluxo Road, the dispensary offers a range of in-house brands like Alchemy and Modern Flower, alongside partner favorites like Alien Labs. Trulieve also provides home delivery and veterans receive a 20% discount, while first-time customers enjoy a 60% discount.

Tilray Brands Ink Major College Football Sponsorship

Tilray Brands, through its subsidiary Shock Top, has inked a major sponsorship deal with Mizzou Athletics, becoming the official craft beer sponsor of the University of Missouri Tigers. This partnership will allow Shock Top to integrate into the vibrant college football culture at Mizzou, with plans to be a key part of game day traditions. The deal underscores Shock Top’s commitment to community engagement and adds another layer of excitement for Tigers fans as they cheer on their team with the brand’s signature beers.

👾 Number Of The Day

34,700,000 The number of edible products sold in CA over the last 365 days.

🗞️ The News

Don Murphy Shares Latest on SAFE – Trade To Black Live In DC

Trulieve Opens New Location In Lake Worth, Florida

Tilray Brands Ink Major College Football Sponsorship

Illinois Supreme Court Says Police Can’t Use Smell Of Burnt Marijuana To Justify Vehicle Searches

Congressional Caucus Seeks Input On Psychedelic Therapy To Inform Development Of Regulated Access Model

Audience and purpose drive cannabis sales: Q&A with Kanha Global’s Angela Cheng

📺 YouTube

DC Feedback: SAFE Banking, Amendment 3, Cannabis Rescheduling Updates | Trade to Black

What we covered:

✅ Tune in today at 4pm EST for the latest Trade To Black podcast featuring footage from Washington DC this week. Interviews with Senators Elizabeth Warren, Steve Daines, Jon Tester, Tommy Tuberville, and contested comments from Tim Scott, John Kennedy, and Georgia Senator Reverend Raphael Warnock on SAFE Banking and the possibility of a floor vote from Senate Majority Leader Chuck Schumer.

We will also include conversations with Florida Congressman Byron Donald and Congresswoman Laurel Lee, who both shared concerns about Amendment 3 and its chances of passing.