Legalization Call
The cannabis team and Hedgeye's head of policy, JT Taylor, did an in-depth analysis of the probabilities of the Safe or The Cannabis Opportunity and Administration Act passing. First, we went through all 100 senators individually and researched their past statements regarding both legalization and cannabis banking access. Through these comments, we formulated probabilities for each senator voting yes on Safe or The CAOA. Next, we developed a tracker for both bills to arrive at an expected value of yes votes. The key will be if either bill has the 60 needed to get through the Senate. Join us as we unveil our tracker and predictions on this call.
Importantly, we will be giving live updates to the tracker as we head into the 2022 mid-terms elections.
We will also discuss the current conditions for cannabis reform and our current thinking on a timeline for potential reform in DC. Looking back to January of this year, many Washington handicappers predicted that 2021 and complete Democrat control of Washington would usher in a much-anticipated wave of pro-cannabis laws/legalization, building momentum in prior Congresses as well as in many State legislatures. Fast forward to the fall of 2021, and the realities of razor-thin governing majorities and hyper-partisanship have settled in - not just for cannabis legislation - but also for meaningful legislation across the board.
With October, November and December packed with tens of trillions of dollars of tax, spending, and debt issues looming, prospects for action regarding the cannabis industry have dimmed for 2021 – but a window of opportunity for action may exist in the first half of 2022 for SAFE, STATES, Cannabis Administration and Opportunity Act, MORE.
PA Legalization
There has been a push to legalize recreational marijuana in Pennsylvania by a bipartisan team of lawmakers. State Senator Mike Regan (R) and Representative Amen Brown (D) are teaming on a bill to legalize. On Tuesday, Brown started circulating a memo to his colleagues seeking support for a legalization bill. "Legalizing and regulating cannabis is simply the right thing to do – ensuring that an equity lens is applied and that injustices caused by enforcement of drug laws are redressed," Brown wrote in his memo to his House colleagues seeking their support. "It is right for my constituents. It is right for the economy. It is right for the commonwealth." Regan also unveiled these plans in the Senate, drawing attention to the $1 Billion it could generate annually in tax revenue. "By enforcing and continuing to enforce drug laws prohibiting possession of small amounts of cannabis, we are clogging our court dockets, overcrowding our prisons, and holding down individuals and communities in most need of support, opportunity, and investment," his memo states. "This situation cannot stand in a fair society, and I will not stand for it." Unfortunately, the GOP-controlled assembly has yet to embrace the idea of legalization, although the democratic governor is on board. If legalized, Pennsylvania would become the 19th state to legalize recreationally in the US.
MD Tracker
Medical sales in Maryland have been slowing compared to other medical-only states. Sales were down 3.8% sequentially, with YoY sales up 9.6%. Sales have been slowing since March of 2021. The annual run rate based on the past three months of sales is $548 Million,
OH Tracker
Ohio sales have dropped slightly from levels six months ago but remain strong. In the last week of September, Ohio had $7.5 million in sales, a 53% increase YoY. The annual run rate of sales is currently $390 Million.
