Cannabis Industry Chart Of The Week: Has The Market Rationally Priced The Prospects For Federal Legalization?

stocks closed down nearly 9% this week, according to the Alternative Harvest ETF. The market clearly viewed the Schumer/Booker proposal as little more than political posturing having virtually no chance of being passed. But one might wonder, why such a violent reaction?  After all, did anyone seriously expect that true federal legalization was at hand?

 

  • Our thoughts:

    • Many cannabis proponents would prefer an approach that simply deschedules cannabis (thereby promoting financial access) and removes IRS 280e, and leaves most of the rest up to the states. This position was eloquently expressed by Kyle Kazen CEO of Glass House Brands: “Let’s get the hell out of the way and let the states do it… the federal government has only done harm here…”

    • Perhaps most significant in driving market reaction is the apparent intransigence of the proposal’s authors. Cory Booker (D_NJ) said he “will lay myself down” to block the passage of less comprehensive reform bills (such as SAFE Act, or MORE Act). Booker’s stance seems to indefinitely …

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