cannabis black book invite
Glass House Brands (GLASF) is a Hedgeye Cannabis Best Idea Long.
EVENT DETAILS:
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The cannabis industry has seen nothing but headwinds for the last couple of years, but momentum is starting to build, with the MSOS up 25% since September 1st. This all started when the HHS made a recommendation that cannabis should be rescheduled from a Schedule 1 drug to a Schedule 3 drug. Rescheduling is not a path to full legalization, but it could be the catalyst needed to push Congress to look at the SAFE Banking Bill on its merits and not as a political headline. Our Hedgeye Macro Team has also recently gone LONG cannabis during their 4Q23 Themes Presentation. There are still many structural issues with the cannabis space, but we believe that Glass House Brands (GLASF), the lowest-cost cannabis cultivator in the world, is the best way to have exposure to this industry.
INCLUDED IN THE PRESENTATION:
- California Retail & Whole Prices
- California Customer Demographics
- Current State Of California Dispensaries
- The Lawsuit Brought Against GLASF
- Where We See GLASF If Schedule 3 Happens?
- What Would Full Legalization Mean?
- SAFE Banking
- Interstate Commerce
- How GLASF Has Become The Lowest Cost Cultivator
Capitol Hill's Green Divide Over Marijuana Legislation
Despite a growing bipartisan support for cannabis legalization, a small coalition of mostly Republican lawmakers on Capitol Hill has been able to hinder progress on key cannabis-related legislation. Their efforts have notably delayed a bill on researching marijuana's effects on PTSD among veterans, and a push to reclassify marijuana federally. Meanwhile, a lack of cohesive strategy hampers the anti-legalization stance compared to the organized pro-cannabis advocacy. This rift within the Republican caucus reflects the broader, nuanced opinions on marijuana policy, indicating a complex path ahead for cannabis legislation..
Where do we stand:
- Sen. James Lankford (R-Okla.), Rep. Pete Sessions (R-Texas), Sen. Steve Daines (R-Mont.), Sen. Cynthia Lummis (R-Wyo.), Sen. Ted Budd (R-N.C.), Rep. Buddy Carter (R-Ga.), and others are notable figures in the anti-legalization efforts.
- The anti-Weed Coalition have been involved in recent efforts to stymie cannabis policy changes, with some notable events. A late 2022 deal between Majority Leader Chuck schumer and Sen. Steve Daines (R-Mont.) aimed to push cannabis bills but faced opposition. A bill researching marijuana's impact on PTSD faced conservative pressure and criticism from Sen. James Lankford. Lankford, Sessions, and others challenged efforts to change the federal categorization of marijuana.
- There were 14 lawmakers in the anti-ween coalition led a letter to the DEA opposing the Department of Health and Human Services’ recommendation to loosen federal marijuana restrictions.
- Notwithstanding the opposition, there is still momentum, including a bill to enhance banking services for the cannabis industry. The SAFE Banking Act, in particular, has the might and money of the American Bankers Association and Scotts Miracle-Gro behind it, and legalization is supported by other influential K street groups like the Wine and Spirits Wholesalers of America.
- There is a lack of strategy among anti-weed caucus. This group doesn't have a coordinated strategy compared to the pro-cannabis group, and most of the cohesion in the anti-weed movement comes from advocates and lobbying groups, not lawmakers’ offices themselves.
- Despite setbacks, momentum for cannabis legislation continues with a bill expanding banking services for the cannabis industry progressing out of the Senate Banking Committee.
- The first-ever standalone cannabis bill to expand medical marijuana research was signed by President Joe Biden earlier this year.
- Lawmakers have nuanced positions on cannabis, from full support of medical use only to complete opposition. Conversely, strong supporters of the cannabis banking bill — including Lummis, Daines and Sen. Kevin Cramer (R-N.D.) — are opposed to federal decriminalization. And Rep. Dave Joyce (R-Ohio) supports decriminalization but opposed a House bill to do so that did not include a regulatory and taxation framework for the new industry.
- There is a growing divide emerging among republicans between those favoring criminalization and those recognizing states' rights to legalize marijuana.
cannabis heading to the pharmacies
No state currently allows the sale of THC products in pharmacies, but that is about to change. The Georgia Board of Pharmacy is currently reviewing applications from pharmacies around the state that want to sell low-dose THC products. Under Georgia law, the THC content can only be up to 5mg. National chains such as CVS and Walmart won’t be selling THC products in Georgia, but the state has more than 400 independent pharmacies, and many seem interested in getting the special THC sale license, according to the professional association representing those stores.
