The Highlights
Global equities had a strong week and first half of the year. The MSCI World Index was up 2.54% last week and up 15.20% in 1H23. The S&P 500 showed similar results, up 2.32% on the week and up 15.90% YTD, marking its fifth-best start since 1990. Led by big tech and AI, the NASDAQ was up 2.19% last week and up 37.23% YTD. NVIDIA (NASDAQ: NVDA) is up 289.44% this year. Small caps have lagged, while the Russell 2000 jumped 3.67% last week, but for 1H23 is up just 7.40%. US cannabis stocks, as represented by the MSOS ETF, were up 0.73% last week but down 13.87% through June 30. There has been considerable dispersion, with Glass House Brands (NEO: GLAS.AU, OTCQX: GLASF) up 69.81% and TerrAscend (TSX: TSND, OTCQX: TRSSF) up 60.20% for the first six months. On the flip side, Trulieve (CSE: TRUL, OTCQX: TCNNF) down 48.30% and Ascend (CSE: AAWH, OTCQX: AAWH) down 46.15% had the softest starts to 2023. Maryland Launches Adult-Use Sales Maryland opened for adult-use cannabis sales on Saturday, July 1. It is a big state, with 6.1 million people, and will benefit from being bordered by four medical-only states: Pennsylvania, Delaware, Virginia, West Virginia, and Delaware. The flip from medical to adult-use sales often leads to a 2-4x increase in revenue. Residents 21 and over can purchase and possess up to 1.5 ounces of flower, 12 grams of concentrates, or up to 750 milligrams of THC. Purchases are subject to a 9% cannabis excise tax, which is the same way Maryland taxes alcohol sales. Households are allowed to grow up to two plants if they are indoors and away from public view. Unlike Missouri, MSOs have significant exposure to Maryland. Ten operators have 32 stores and Curaleaf (CSE: CURA, OTCQX: CURLF), Verano (CSE: VRNO, OTCQX: VRNOF), TerrAscend (TXS: TSND, OTCQX: TRSSF), and Ascend (CSE AAWH, OTCQX: AAWHF) all have the state maximum of four adult-use stores. Curaleaf, Verano, and TerrAscend are vertically integrated with cultivation and manufacturing, which provide greater control of the supply chain and can enhance margins.
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