Joe Biden's announcement on marijuana reforms.
Joe Biden's announcement last week does not change the overall situation for marijuana companies, but it does raise hopes for more significant reforms in the future.
It is clear that the new administration is committed to marijuana reform, and this could lead to some major changes in the near future. If more expansive legislation is passed, it could mean big things for the cannabis industry and investors. We could see a major boom in the industry, and it would be wise to keep an eye on this developing story.
I agree with Pablo Zuanic's assessment that Biden's comments on the cannabis industry should not have caused such a drop in stock prices for Canopy and Tilray. These companies are well-positioned to succeed in the growing legal cannabis market, and I believe their stock prices will rebound in the near future.
It is clear that the market for cannabis stocks is volatile and that there is still a lot of uncertainty surrounding the industry. However, I believe that the long-term prospects for the sector are still very positive. The ETFMG Alternative Harvest ETF (MJ) provides investors with exposure to a basket of Canadian cannabis stocks and is a good way to play the industry. The fund has $410 million in assets and is down 56% this year, but I believe that it still has significant upside potential.
The AdvisorShares Pure U.S. Cannabis ETF (MSOS) has been one of the best performing ETFs in recent months, thanks to the strong performance of the U.S. cannabis industry. However, the ETF has been volatile in recent days, thanks to the overall market sell-off. While the ETF is still down from its highs, it has held up better than the overall market, thanks to the strong fundamentals of the U.S. cannabis industry.
Although both Green Thumb Industries and Curaleaf have seen steep losses in recent days, they are both still up significantly from where they started the week. This is good news for investors in these companies, as both still have strong potential for growth.
The U.S. stocks may have sustained more of their gains thanks to Biden's request to review how marijuana is classified under federal law. The current classification as a Schedule I substance puts companies selling it at a disadvantage, facing strict tax regulations and not being able to make normal business deductions. This review could lead to a change in classification for marijuana, making it more business-friendly and opening up new opportunities for investment.
It is clear that if cannabis is descheduled in the United States, then American companies will benefit greatly from the move. This is due to the fact that they will no longer have to pay taxes on their gross profits. This is a huge advantage for American companies, and it explains why their stock prices have held up better than their Canadian counterparts.
It is clear that the current regulations surrounding cannabis are stifling the industry's ability to grow and be profitable. This is especially frustrating for investors who have seen the value of their investments decline sharply over the past year. It is hopeful that President Biden's recent announcement on the potential rescheduling of cannabis could lead to meaningful change that would allow the industry to flourish. However, only time will tell if this is truly the case or if it is simply political posturing in advance of the upcoming midterm elections.
I hope that this executive action will be a springboard for more legislation to lighten restrictions on cannabis. Senator Cory Booker is reportedly working across party lines to pass a “SAFE Banking Plus” bill that would include banking reform for the industry plus provisions for veterans healthcare and Small Business Administration loan mandates for small cannabis businesses. Nine Republican senators are already cosponsoring a draft of the SAFE Banking Act, plus most Senate Democrats. I believe that this bipartisan effort will result in meaningful change for the cannabis industry, and that it will have a positive impact on the lives of those who have been affected by the current restrictions.
I think it is likely that a bill will be passed during the lame duck session that could help push the MSOS ETF to $20 per share. This would be a huge increase from its current price around $11 and would be a great development for the company.
I see the most important thing in the short term being the SAFE Plus Act, with both Republican and Democratic senators working together to get it passed during the lame-duck session. Based on the current draft of the bill, it looks like it will have enough votes to pass. This is a great step forward for our country, and I hope to see it become law soon.