Performance
The Current Administration does not care about cannabis reform
Even before the Russian invasion of Ukraine, Cannabis reform was not on the Administration's radar screen; not that we needed any more confirmation of that! This inaction on modest cannabis policy reforms over the past year seems almost purposeful.
According to Politico, smoking weed may no longer be the only potential impediment to getting a job at the White House. Investing in cannabis companies could now trip up applicants, too. The Biden administration has expanded its employee conduct guidelines to potentially deny security clearance to individuals who have invested in companies that are involved in the marijuana business, according to an internal executive branch presentation shared with POLITICO. “Eligibility may be negatively impacted if an individual knowingly and directly invests in stocks or business ventures that specifically pertain to marijuana growers and retailers,” according to the document. “Decisions to willfully invest in such activity could reflect the questionable judgment and an unwillingness to comply with laws, rules, and regulations.”
January Sales Slowed significantly; March is looming
January Cannabis industry sales slowed 9% MoM to 10% YoY
Medical Markets are holding up better except MD & PA
Not many states were immune from the January slowdown - going to get much worse in March!
CA, CO, and WA are dragging down overall industry sales. MD Medical has stalled!
Grow Generation
No reason to buy this stock until we can see a road to real cannabis reform.
GRWG reported 4Q22 adjusted EBITDA at a smaller loss than consensus with revenue in line and comps (12.3%) y/y; guides FY22 adjusted EBITDA and revenue below consensus and delays the filing of the 10-K. The soft guidance reflects continued widespread challenges for retail sales of hydroponic and organic specialty gardening products.
