The Highlights
In a volatile week, the US cannabis MSOS ETF gained 1.10%, while the global YOLO ETF climbed 3.92% on continued strength of select Canadian names. YTD, MSOS is +49.70% and YOLO is +39.47%. AYR Wellness (CSE: AYR, OTCQX: AYRWF) finished at +8.47% and had the strongest week among the larger operators. CEO David Goubert joined us on Higher Exchanges to discuss the exciting set of potential catalysts that the company has ahead in 2024. Eighty percent of AYR’s stores are medical, giving it outsized exposure to possible adult-use transitions in Florida, Pennsylvania, and the rollout in Ohio. Those interested can listen to the episode on Apple, Spotify, or Google. Links are accessible in our full report. MSOS had five consecutive days of inflows totaling $51.3 million. This may be driven by the potential for the DEA to respond ahead of 4/20 and investors adding to positions after the Florida news last Monday. The fund has had $410 million in inflows since the HHS made its recommendation on August 29, 2023, and $250 million YTD. On Monday, the Florida Supreme Court ruled 5-2 to allow Amendment 3 on the ballot this fall. This is an approximately $2 billion medical market that we expect to more than double if it becomes adult-use. The measure requires a 60% vote to pass and, if successful, sales would start in May 2025. The biggest driver of the larger-than average adult-use gain is the 135 million tourists Florida welcomed last year. Under the medical program, out-of-state visitors are not allowed to buy cannabis, but they would be able to under recreational rules. Plus, Florida is bordered by Georgia and Alabama, neither of which have adult-use programs, which should drive significant sales to out-of-state residents. Trulieve (CSE: TRUL, OTCQX: TCNNF) is the leader in Florida with 134 stores and 750,000 square feet of indoor cultivation. Because Florida does not have a wholesale market, it is critical that operators’ cultivation and manufacturing capabilities match their retail footprint. We’ll be in Florida on April 16-17 for the Benzinga Cannabis Capital Conference. We’ll be moderating the opening keynote on April 16 at 9:10 am ET with Glass House Brands (NEO: GLAS, OTCQX: GLASF) CEO Kyle Kazan. Use code WTR20 for 20% off tickets. See link in our full report.
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