This is a moment that’s been signalled hard for months…… swept along with much anticipated hype since last fall – culminating in February’s swoon over legal US cannabis stocks. And you’ll hear all the pomp and circumstance and enthusiasm that the omni-channel universe can deliver.
Yesterday’s drop by NBC is all a part of of this as cannabis is pushed into the mainstream news cycle and multiple outlets pick up the ‘story’. A stigmatized ‘sin’ that’s <still> relatively emotive in many parts of society. We watched it unfold in Canada, and now it’s beginning on a wider basis in the States.
Applying a critical eye to what’s actually available though, we find out that Schumer’s press conference tomorrow isn’t part of a formal announcement. Nope, it’s a rumoured announcement of a ‘discussion draft‘ by ‘two sources who were briefed on the plans‘. All planned, all political.
All I take away from this is now the horse trading is being done in the public eye (at least what will be permitted to be). And from here, everyone and their dog will be vocally staking out positions. From there – it’ll be nothing but politics and Big Money fighting to take their hills and positions from there.
Most have expected a move to legalization at a point in the future (check), this is a simply a step forward on that path.
TheCannalysts have been expecting an application of excise tax federally that’ll formally incite the Dormant Commerce Clause within Article 1 of the US Constitution; we’ve been anticipating a 3-Tier regulatory model that’ll break existing verticality into production/distribution/retail channels and disrupt existing asset arrays; and an installation of the ‘third rail’ of current political thinking: social justice.
I don’t think this latter piece should be conflated with the ‘Black Lives Matter’ ‘movement’ – although its’ a close family member. Nope – ‘social justice’ to me ostensibly means economic reparations actively being made to historically disadvantaged populations – something that the drug war executed perniciously, and with great prejudice. It can be enacted using 3-Tier, applying the DCC, and through licence pathing. Perhaps even in ways we haven’t examined. But it’ll become part of the larger ‘discussion’ that’s rumoured to be announced tomorrow.
GoBlue is about to drop yet another look at one of the facets of asset quality today – and put up the straight math of it. And believe me: the work he is doing on asset quality right now is seminal for the investor. The discounted cash flow fluff sell-side used so effectively as macro-trope to induce interest in micro-asset arrays is about to stare into the sun tomorrow.
And all of the glossy ads and pitch decks put up over the past year could be rendered as useless as last week’s sales flyer from the local grocery store. What won’t be is the quality of the assets within existing companies – and companies that will immediately begin formation/reconstitution after tomorrow’s announcement (I expect there will be many).
I can’t emphasize enough how important Blue’s work right now is to your future portfolio. And I hope I can bolster it as well with some of my own thoughts on asset quality coming soon.
It’s all about to get very real. I suggest to not get swept up in the hype (there’s going to be lots.), nor incomplete sell-side narratives that omit reality. I know I’ve been going off about advertising and the financial-market-media-sell-side-machine lately. But until early March – nobody was talking about 3-Tier/DCC and its’ implications to the legal cannabis sector in the US aside from our small, independent analytical/research firm.
Nobody.
Please think about that.
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.
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