The Highlights
After five straight positive weeks, we were due for a pullback. The US cannabis MSOS ETF fell 5.68%, while the global YOLO ETF fell 3.95%. YTD, MSOS is +37.37% and YOLO is +20.86%. The potential for Schedule III and 280E removal is driving the outperformance of US names. For the week, MSOS had $44.07 million in inflows. Ascend (CSE: AAWH, OTCQX: AAWH) gained 11.41% this week and was finally added to the MSOS ETF. For years, Ascend has been the only top 20 US cannabis stock not in the ETF. Ascend is currently 0.24% of MSOS, whereas similar sized (by enterprise value) AYR (CSE: AYR, OTCQX: AYRWF) is 2.94%, implying the Ascend allocation would need to grow more than 12x to be a similar weight in the portfolio. We’ll see if the addition to MSOS gives Ascend lasting momentum. California’s LEEF Brands (CSE: LEEF, OTCQX: LEEEF) climbed 2.96% this week and announced a nursery joint venture with Lifted Organics. The new partnership should improve LEEF’s genetic offerings, reduce costs, and give it greater control of the supply chain. We will be hosting a fireside chat with CEO Micah Anderson at the Benzinga Cannabis Market Spotlight in LA on February 22. Use the code Redmond20 for 20% off tickets for the event. On Wednesday, we hosted a fireside chat with MariMed (CSE: MRMD, OTCQX: MRMD) COO Tim Shaw. We talked about how MariMed builds strong brands, grows greater flower, and makes delicious and effective edibles. The replay link is available in our full report. Pennsylvania Governor Josh Shapiro called on lawmakers to legalize adult-use cannabis during his annual budget address. He proposed the legalization effective July 1 for possession and consumption, with full adult-use sales commencing January 1, 2025. Trulieve (CSE: TRUL, OTCQX: TCNNF) has the most doors in Pennsylvania with 20, while Jushi’s (CSE: JUSH, OTCQX: JUSHF) 18 gives it the most exposure when you divide dispensaries by enterprise value. Headset and BDSA data show Cresco (CSE: CL, OTCQX: CRLBF), Green Thumb (CSE: GTII, OTCQX: GTBIF), and Verano (NEO: VRNO, OTCQX: VRNOF) are among the top brands in the Keystone State.
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