Trulieve ($TRUL) went sub-$30 yesterday, and followed it up this morning by dropping further, going sub-$29 (as of writing).

I don’t normally comment on market action – but I noticed that by and large, MSO prices have now retreated to levels seen in late 2020. This is where they were at the cusp of the emerging prospect of a Democratic White House. To me, that’s important.

Because it means that a year of adding states and increasing sales has meant little. That what is important is getting legalization – and regulatory certainty – is seen once again as central to the future of the sector.

If one believes asset pricing (ie: stock prices) were at Fall 2020’s levels on a hope that legalization would occur under the Democrats, where are we at now? Biden couldn’t pull off Voting Rights. And the clock on the remaining time of this current status of the House is running out as mid-terms are approaching.

I’ve been speaking with GoBlue, and he and I are of the opinion that Senate Majority leader Chuck Schumer will address the CAOA at some point over the next couple of months. The key word there is ‘address’ – as the legislation appears fossilized (even now only a ‘draft’ exists). I am pessimistic about Schumer/Booker getting the thing done before the fall. If so, that takes us back to early/mid-2020.

Which, was 40% less than where we are now.

If any of this line of reasoning is valid (market psychology and emotion notwithstanding), then significant downside could remain. Chatter about ‘capitulation’ led me to write this piece one month ago. <NB: $VRNO and $AYR have both seen increases in price over the period>

Since then, the MSO market has yet again backed up. And I believe that the likelihood of further downside increases as uncertainty remains ‘status quo’.

I can’t predict the future, but I’ve no meaningful amount of money anywhere near this sector at the moment.

The preceding is the opinion of the author, and is in no way intended to be a recommendation to buy or sell any security or derivative. The author holds position in $GTII and $XXII