The Highlights
The US cannabis MSOS ETF broke a two-week slide and gained 9.51% over the last five sessions. The week was shaping up to be negative, until optimism around federal reform caused MSOS to jump 14.91% on Friday. This was the biggest one-day return since September 5 and 14.58 million shares traded is the most since September 15. Interestingly, there were no inflows into MSOS this week. The global YOLO ETF continued its pattern of not participating as much in the sharp moves and last week gained 5.69%. Cannabis stocks trade like a call option on federal reform and comments from the Vice President on Friday made investors increasingly optimistic about rescheduling. On Friday, Vice President Harris said in a public meeting, “They (the DEA) need to get to it as quickly as possible... Marijuana is considered as dangerous as heroin and more dangerous than fentanyl.” The Vice President also mentioned legalizing cannabis for the first time. According to a participant in a closed-door meeting of pardon recipients, she said, “We need to legalize marijuana.” While legalization would be surprising, it does appear we are seeing a coordinated democratic effort to advance cannabis reform ahead of the elections this fall. In an X post that received more than 239,000 views, hedge fund manager Doug Kass stated, “We have learned yesterday that the US Drug Enforcement Administration will shortly approve a rescheduling of cannabis to Schedule III and that the biggest legal hurdle, an international treaty (the Single Convention on Narcotic Drugs (1961)), to which the US is a signatory has been resolved favorably.” The combination of the President’s mention of cannabis at the State of the Union, the Vice President’s statements on Friday, and Mr. Kass’ post possibly point to federal reform finally being a real near-term possibility. While federal reform remains critical, we received a wave of new earnings reports last week that help us better understand the fundamental landscape. We discussed our biggest earnings takeaways and had Ascend (CSE: AAWH, OTCQX: AAWH) CEO John Hartmann on Higher Exchanges this week. Those interested can listen to the show on Apple Podcasts, Google Podcasts, Spotify, or X Spaces. Our three key takeaways from the Tier 1 reports are on the following pages.
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