The Highlights
Global equities continued their decline this week, with the MSCI World Index falling 2.51% and the S&P dropping 2.39%. The small-cap Russell 2000 lost 2.25%, while the NASDAQ was hit hardest at -3.16% over the last five sessions. Concerns around higher interest rates and geopolitical tension led to the losses. The 10-year Treasury is approaching 5%, its highest level since 2007. Cannabis stocks sold off again and the US cannabis MSOS ETF lost 5.11%, while the global YOLO ETF fell 3.96%. We’ve been in a quieter news cycle and concerns about who will become Speaker of the House have been eroding sentiment. SAFER Banking is sitting in the Senate and with each potential new Speaker candidate, investors are assessing how this may affect SAFER’s probabilities. Long term, the rescheduling process and potential new adult-use states like Ohio, Pennsylvania, and Florida are more important than SAFER Banking. However, our recent poll on X revealed that 55% of investors feel SAFER Banking is more important than Florida allowing adult-use sales. Global equities and cannabis stocks both dropped this week, but the YTD correlation of MSOS to the S&P 500 is just 0.15, while the one-month correlation is 0.25. Most equities are being driven by interest rates, earnings, and geopolitical concerns, while cannabis stocks are largely trading based on the potential political progress. Blending uncorrelated investments is a proven means of increasing risk-adjusted returns. Curaleaf (CSE: CURA, OTCQX: CURLF) at -9.41% and Cresco (CSE: CL, OTCQX: CRLBF) at -7.78% had the largest losses of the top MSOs. MariMed (CSE: MRMD, OTCQX: MRMD) at +4.19% and AYR Wellness (CSE: AYR, OTCQX: AYRWF) at +4.12% were the top performers among the larger operators. Jushi (CSE: JUSH, OTCQX: JUSHF) at +3.94% was not far behind. Verano (NEO: VRNO, OTCQX: VRNOF) was up 2.55% this week and transitioned from the Canadian Stock Exchange (CSE) to the Cboe Canada. Operators are optimistic that the Cboe will lead to increased liquidity, international benchmark eligibility, and an easier transition to the NASDAQ or NYSE. The Cannabist (NEO: CBST, OTCQX: CBSTF) also recently moved from the CSE to the Cboe Canada.
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