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It’s been quite a rut. The shares of Curaleaf Holdings, Green Thumb Industries and Trulieve Cannabis have plummeted more than 30% this year — much worse than the declines posted by benchmark indexes such as the S&P 500 and Dow Jones Industrial Average. Much of cannabis companies’ slide is due to the failure of reforms that investors had hoped for to materialize so far under U.S. President Joe Biden.
BTIG analyst Camilo Lyon calls it a “regulatory recession,” given that the stocks still trade at low multiples to their earnings, and many companies have seen growth rates of 60%.
However, under the federal Controlled Substances Act, marijuana remains classified as a Schedule 1 illegal drug with no medical uses, on par with heroin and LSD. The Drug Enforcement Agency strictly limits marijuana cultivation for research, frustrating scientists who are unable to investigate its medical benefits and risks under current regulations.
Rescheduling marijuana for research was an oft-repeated promise of President Joe Biden’s campaign, along with a pledge to decriminalize the use of cannabis and grant clemency to people with federal marijuana convictions.
Runoff elections will dictate which party controls the Senate
In Georgia, two Senate runoff elections are scheduled for today, Jan. 5. All eyes are peeled on the race, given that Republicans currently hold 50 seats while Democrats occupy 48 (if you include the two independents who caucus with them, Bernie Sanders and Angus King). With two seats at stake, a Democratic sweep would give the party an equal share. And if there is a tie in the Senate, the deadlock is broken by the vice president -- a seat that Democrat Kamala Harris will soon hold.
The cannabis sector appeared in a dire position heading into the coronavirus outbreak. The sector was generally unprofitable and needed additional capital to grow so an extended shutdown of retail stores would have crushed the stocks.
With a House vote on Democratic leadership’s latest coronavirus relief package expected on Friday, Rep. Ed Perlmutter (D-CO) is making the case for a provision he’s championing that would protect banks that service marijuana businesses from being penalized by federal regulators.
Legislation allowing banks to provide credit cards and checking accounts to legal cannabis businesses has been stalled in the Senate. But members of Congress are looking to add its provisions to the next coronavirus stimulus bill, NJ Cannabis Insider has learned.
The argument is that many patients who use legal marijuana are among the most vulnerable to contracting COVID-19, and forcing them to deal in cash also puts employees at risk.
This situation is common for a “cannabis-related legitimate business or service provider” (CRLB) operating in New Jersey and other states, because the federal government classifies marijuana as a Schedule 1 controlled substance, creating a conflict in authority. Schedule 1 classification defines marijuana as having (i) a high potential for abuse, (ii) no currently accepted medical use, and (iii) no accepted safety standards for its use under medical supervision.
The cannabis industry in the US took a significant step towards the mainstream this week following the passage of the SAFE Banking Act 2018.
Legislation that would allow cannabis companies access to banking services in states where weed is legal was approved today by the U.S. House of Representatives.
New Jersey’s House delegation approved the bill along party lines, with only Rep. Christopher Smith (R-Hamilton), the lone Republican congressman from New Jersey, voting against the measure.
House leadership confirmed on Friday that a bipartisan marijuana banking bill will receive a floor vote next week despite objections from several leading advocacy groups who want broader justice-oriented cannabis reforms to advance before what they see as an industry-focused proposal.
The Secure and Fair Enforcement (SAFE) Banking Act, which cleared the Financial Services Committee in March, will be voted on through a process known as suspension of the rules, requiring two-thirds of the chamber (290 members) to support it for passage.
