The Highlights
MSOS fell 14.90% last week, while YOLO dropped 8.72%. Of the larger MSOs, Verano (NEO: VRNO, OTCQX: VRNOF) got hit hardest at -20.77%. MariMed (CSE: MRMD, OTCQX: MRMD) at -4.61% and Cannabist (NEO: CBST, OTCQX: CBSTF) at -7.43% held up best, but the entire top 10 was down last week. Cannabis stocks continue to sell off in the face ostensibly good news. On Tuesday, the proposed rule to reschedule cannabis from Schedule I to Schedule III was published to federal register. This kicks off the 60-day comment period, which will conclude on August 20, just in time for the Democratic National Convention on August 19-22 in Chicago. Nick Gastevich, Vice President of V. Gastevich Investments, LLC, joined us on Higher Exchanges this week. Known as CannaVestments on X, Gastevich is one of the more experienced cannabis investors and a must-follow on social media. We discussed cannabis stock’s adverse reaction to the positive momentum on rescheduling and debated timeframes for a final ruling. Morgan Paxhia provided an update on the Boies lawsuit, and the heart of the conversation focused on first-quarter earnings. We evaluated top-line growth and EBITDA conversion and analyzed cash flow metrics. The conversation concluded by evaluating different factors investors can use to analyze cannabis stocks. Those interested can catch the episode on Apple Podcasts, Spotify, or on X. Links are accessible in our full report. Last Thursday, an amendment to prohibit intoxicating hemp products passed the House Agriculture Committee. If implemented, it would ban all hemp-derived THC and close the THCa loophole. We estimate the hemp-derived THC market is similar in size to the traditional market. The lack of regulation puts youth at risk, creates potentially dangerous untested products, and is cannibalizing sales in legal medical and adult-use cannabis markets. On Wednesday, May 29, 2024, at 5:00 pm ET, we’ll be interviewing Mindset Capital CEO Aaron Edelheit about low-dose (often hemp-derived) beverages. Known as @aaronvalue on X, Edelheit manages funds focused on public cannabis companies and recently launched a vehicle dedicated to cannabis beverages. We’ll discuss the rising popularity of cannabis beverages and evaluate risks and opportunities as the category and regulations evolve. Those interested can listen live or hear the recording via links in our full report.
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