The Cannabis Summer Courtship
Something significant happened this week; a seismic shift the cannabis landscape…
…settle down, Penny. I’m not talking about Connecticut becoming the 19th state to legalize adult-use although I know you’re super-excited for that. Think… bigger…
…um no but Mexico is factually larger than Connecticut (and it’s interesting to note the judicial branch busting up legislative bureaucracy) but you need to think BIGGER…
…bc Supreme Court Justice Clarence Thomas suggested yesterday that U.S cannabis prohibition may be unconstitutional and even went so far to label the federal policy‘contradictory’ and ‘unstable.’ (<- you don’t need a law degree to realize this)
While the high court declined to hear the case in question, a Supreme Court Justice (and an uber-conservative one at that) finally acknowledged the untenable conflict bw federal and state law, calling out The War on Drugs for what it is: an abject failure.
Roger, Roger, so what’s our vector, Victor? idk but we’ve always thought the Supreme Court would side with the states bc of that whole Tenth Amendment / laboratories of democracy thing. It’s the U.S Constitution so it has to eventually matter, right?
That’s a trick question—of course if will— even if it takes a few years to cycle through, and the real story, as we’ve screamed from rooftops, is continued state-level adoption that’ll drive the total addressable market (TAM) higher for years to come.
AGP vibes the eye of the storm too, echoing many of the themes we’ve written about, including the regulatory arbitrages that await those of us who are 1. lucky enough to access to these securities and 2. patient enough to wait for our payday to arrive.
Our buddy o’ pal Camilo Lyon @ BTIG continues to see it too, pointing to the “rapid momentum” and increasing likelihood “that something (like SAFE+) will pass sooner than later as the countdown clock to the midterms ticks louder with each passing day.”
As the federal courtship continues—and remember, Senator Schumer doesn’t have the votes for his preferred comprehensive reform so incremental steps remain the most likely scenario—the world continues to turn, and what a world it is!
Thanks to the ~$8 trillion of liquidity injected into the financial system over the last whatever, the world is jacked full of juice, driving undeniable inflation in things we need (food, insurance, education) while structural deflation in things we want (tv’s, plasmas, cell phones) skews the measuring stick that measure such things.
Don’t worry though, the powers-that-be assure us inflationary pressures are transitory; and it’s not like anyone cares. It’s not like the middle class is getting pinched and it’s def not not like that word is spiking in Google trends or anything.
I get it though, I do. As the post-pandemic world reopens, things are bound to change. Behaviors, are bound to change. Johnny Couch Potato has gotta get-up-and-go. Suzy homemaker ain’t hittin’ that pen before a day with the kids. I mean, let’s be real: who isn’t spending more of their wallet on dining out, travel and clothes w/o drawstrings??
We know that April and May were fine, per the data. Was June soft? I’m sure it was, relatively speaking. But markets look forward and I’m pretty sure that some of the four-month 40-odd % drawdown in US canna already priced that-in and equally sure capacity will ramp in the back-half of this year and that 2022+ will be bananas as the tri-state area onboards (and MD, PA, OH, FLA and others step on deck / in the hole).
In other words, any demand dip will be… transitory (snickers to himself).
I was gonna toss out some best-of-breed weekly charts. Like Green Thumb ($GTBIF)…
Curaleaf ($CURLF)…
Trulieve ($TCNNF)…
Cresco ($CRLBF)…
and TerrAscend ($TRSSF) …
…to help demonstrate the relative field position and to show via actual pictures that the current U.S cannabis landscape is ripe with generational flavor for those like Melvin U who, with the proper perspective, risk management and time horizon, know….
Because soon enough, widespread research and clinical trials will validate what those of us who’ve been touched by this wonderful plant already know: that it’s a treasure trove of active pharmaceutical ingredients with an efficacious agility that’s about to disrupt western medicine and kill categories across big pharma (<— boo f*cking hoo).
Damn- I ran out of room again but if this left you canna curious, please check this podcast with Emily Paxhia from Poseidon and Cy-lo Scott from Headset as those are some seriously smart fokkers.
PS- if you cannot access US MSO’s on the CSE or pink sheets, NYSE-listed $MSOS ETF is a hella proxy that will mirror their performance. More info on that right here.
/advisor $MSOS
/positions in stocks mentioned
Todd Harrison
