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- 📈 The Time Has Come 📈
📈 The Time Has Come 📈
Anthony Varrell
July 22, 2024
GM Everyone,
It happened. Joe Biden has stepped down from the 2024 Presidential race and finally bowed out as we expected. This paves the way for a new candidate, presumably Kamala Harris, as Joe has already endorsed her and political pundits have seen a groundswell of support behind her. However, there are also whispers of an open convention, which would be quite interesting. This would set the stage for a spicy DNC and allow people to actually see the diversity within the Democratic Party.
Why is this relevant? While cannabis may not be front and center of these talks, you can bet that the topics of legalization and rescheduling will be brought up. Many of the potential candidates in an open convention would be coming from legal adult use states. Today’s tape should be a big indicator of whether we are going to see some sort of sentiment shift. Keep your eyes peeled.
FYI $MSOS and $MSOX are making nice moves pre-market to the upside.
Today’s letter can be read in 8 minutes and 52 seconds.
What's Driving the Market Today?
Futures are up after the worst week since April, here is what is moving the market:
Biden exits race; Harris endorsement shifts market focus.
Interest rate cut by China's central bank weakens yuan.
The tech sector braces for earnings from Alphabet and Tesla.
VIX remains high amid market volatility.
Nvidia's AI chip plans boost stock by 1.3%.
💸 High Impact
This is your inside scoop on Pennsylvania
The What - Michael Bronstein, co-founder and president of the American Trade Association for Cannabis and Hemp (ATACH), last Friday provided comprehensive insights into Pennsylvania’s development of cannabis regulations. Interviewing on the "Trade to Black" podcast, Bronstein highlighted the significant strides and persistent challenges in the state's journey toward cannabis legalization.
Bronstein, a political strategist, underscored the progress made in Pennsylvania. "The conversation advanced to a point where it's never advanced before in the state," he stated, referring to the budget discussions that seriously considered adult-use cannabis legalization. Despite not passing in this session, the dialogue has opened avenues for future legislative efforts.
The bipartisan support for cannabis legislation is a notable development. Bronstein emphasized, “We saw the first bipartisan House bill ever introduced in Pennsylvania, a co-sponsorship memo circulated between Representative Coffer and Representative Kincaid.” This indicates a growing consensus across party lines, crucial for the successful passage of future cannabis laws.
The economic potential of cannabis legalization in Pennsylvania is substantial. A study conducted by Responsible PA, commissioned with FDI Consulting, projected that adult-use cannabis could generate approximately $420 million in tax revenue in the first year alone. Bronstein highlighted the urgency of tapping into this revenue stream, especially as neighboring states move forward with their own legalization efforts. “The governor spoke about the issue being other states around us potentially eating our lunch or taking tax revenue,” he noted.
Bronstein also addressed the regulatory complexities surrounding cannabis, particularly the interplay between state and federal laws. He pointed out the confusion caused by the 2018 Farm Bill, especially regarding synthetic THC products. “The idea that people would read the Farm Bill and say, okay, well, this derivatives language, if we create a synthetic product, that synthetic THC is somehow lawful, but natural THC is unlawful, I don’t think anybody could have predicted,” he explained.
Moreover, the budget oversight that left medical marijuana dispensaries out of a section providing tax relief further illustrates the need for meticulous legislative drafting. Bronstein remarked, “Always important to proofread what you do,” highlighting the drafting error that excluded dispensaries from tax relief measures. This incident underscores the necessity for precise language and careful review in legislative processes.
The Why - Generational attitudes towards cannabis continue to influence regulatory progress. Bronstein noted, “A lot of people see this as a generational issue. When I ask my parents what they think of the issue, they have a different view than I have.” He emphasized that as younger generations come to view cannabis similarly to alcohol, normalization and acceptance are likely to increase.
The push for responsible regulation and transparency is vital for industry growth. Bronstein stressed, “If we want to sell these intoxicating products, let’s do it in a lawful fashion and in a way that we make the law clear under a regulatory perspective.” This call for clarity and consistency in regulations is essential for fostering public trust and ensuring market stability.
Michael Bronstein and ATACH remain at the forefront of these efforts, advocating for policies that support both the cannabis and hemp industries. As Bronstein aptly put it, “We have more to do and we’re here to do it.” The continued push for comprehensive and responsible cannabis regulation in Pennsylvania is crucial for realizing the economic and social benefits of legalization.
📈 Dog Walkers
The Comment Period Ends Today
The comment period officially ends at midnight tonight, marking the completion of one major step in the rescheduling process. As of this morning, we are sitting at just under 37,000 comments submitted, which is a healthy amount when compared to comment periods for rule-making processes in the past. The expiration will signify the end of the first major step and the beginning of the rest of the process, which very well could get fast-tracked given the current state of political affairs within the administration.
Ohio Takes Major Step
The Ohio adult use cannabis implementation process has taken one huge step forward by granting certificates to begin adult use sales for cultivation and processing. This is the first logical step in the process to officially green-light these operations ahead of the granting of the adult use retail licenses, which are imminent.
Rep. Nancy Mace Advocates for Cannabis Descheduling and State Control
Rep. Nancy Mace (R-SC), who has sponsored legalization legislation, was also asked about the prospect of a Trump administration rollback of rescheduling. She didn’t directly answer the question, but said, “I support rescheduling, but I support descheduling.” “Leave it up to the states to decide,” she said, echoing points she made during a separate interview at the RNC convention this week.
🗞️ 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
Would We Buy These Five Small Caps? | TDR Small Cap Sunday
What we covered:
✅On this episode of Trade to Black Small Cap Sunday Podcast, we provide research for five small-cap stocks. We also share how to avoid traps and use an example of a NASDAQ-listed stock. Co-Host Shadd Dales and Bill McNarland will share the analysis they did earlier in the week. This week we looked at the following companies:
AXIL Brands (NYSE: AXIL) - A specialty hearing protection company from California.
Electrovaya Inc. (NASDAQ: ELVA) - Based in Toronto, focuses on lithium-ion battery technology for industrial applications.
Cannabix Technologies (OTC: BLOZF) - Headquartered in Vancouver, is pioneering the development of cannabis breathalyzers, addressing a significant need in the drug testing market.
Airnet Technologies (NASDAQ: ANTE) - Based in China and formerly an outdoor advertising and in-flight internet company, has now pivoted to crypto mining.
Jushi Holdings (OTC: JUSHF) - a multi-state cannabis operator, operates in key states, including Pennsylvania, Virginia, Ohio, Illinois, Massachusetts, Nevada, and California.