GRUSF IS a Best Idea Long | Grown Rogue Is Defining Craft Cannabis
On the 8th of April, we are set to unveil the GRUSF Black Book. Positioned on the brink of an explosive growth trajectory, GRUSF is poised to escalate from a market capitalization of $117 million to a valuation between $500 million and $1 billion over a Tail duration.
The West Coast has long been recognized as a hub for cannabis cultivation, and we believe that some of the best-positioned companies in this space are West Coast cultivators, including GLASF and GRAM. Today, we are adding Grown Rogue (GRUSF) to that list by placing it on our BEST IDEA Long list.
The unique combination of Oregon & California's terroir, expertise, state-of-the-art facilities, and strong consumer demand for high-quality cannabis brands from this region is often underappreciated when considering the industry's future potential. Grown Rogue's business model is particularly compelling, as it focuses on producing craft cannabis products of the highest quality while strategically expanding into new markets, vertically integrating its operations, prioritizing profitability, and maintaining a solid commitment to sustainability. This approach allows the company to adapt to the ever-changing landscape of the cannabis industry while cultivating a loyal customer base and a solid brand identity. The company's strategic expansion plans are to grow state by state with a 50,000 Sq ft facility (the size of a Supermarket or large Dave & Busters.) This growth is backed by substantial financial commitments and a targeted approach to entering new markets and innovating its product line. Grown Rogue's recent entry into the New Jersey and Illinois markets and its plans for facility development and leveraging strategic partnerships underscores its robust strategy to capture market share and deliver on its goals in the rapidly evolving cannabis industry.
CANNABIS SPEAKER EVENTS
WE WILL BE HOSTING GLASs House MANAGEMENT ON APRIL 3RD AT 2 @PM
Cannabis Subscribers CLICK HERE for event details
Glass House Brands offers a compelling investment opportunity centered around its significant growth potential within California's cannabis market. The company's strategic and operational enhancements and emphasis on profitability in 2023 further strengthen its position. With its substantial scale, flexibility, and strategically located "unicorn" greenhouse facility, Glass House Brands is well-equipped to navigate the intricacies of California's cannabis industry. These factors position the company to capitalize on the forthcoming wave of industry expansion driven by the advent of interstate commerce.
Please mark your calendars for an exciting event on April 3rd at 2 PM as we welcome the distinguished management team of Glasshouse Brands for an in-depth discussion. Our esteemed guests will include Kyle Kazan, Chairman and CEO; Graham Farrar, President; and Mark Vendetti, CFO. With Glasshouse Brands releasing their Q4 & FY2023 last week, this timely conversation will provide invaluable insights into the company's recent performance and strategic outlook for 2024. Join us as we delve into the financial results, explore the company's growth initiatives, and gain a comprehensive understanding of Glasshouse Brands' position in the rapidly evolving cannabis industry.
PLEASE EMAIL ME WITH ANY QUESTIONS YOU MAY HAVE.
FROM RESCHEDULING TO GENETICS: AN IN-DEPTH LOOK AT THE CANNABIS INDUSTRY WITH SPEEDWELL PARTNERS
Join us for an insightful Cannabis Industry call featuring Brian Moonan and Heather Molloy of Speedwell Partners on 04/04 @ 2 PM. As seasoned industry veterans, they founded Speedwell Partners to support and invest in the growth of the legal cannabis industry. The firm is closely managed and optimally structured, utilizing funds and SPVs to maximize efficiencies and transparency while delivering solid returns for investors. During the call, Brian and Heather will provide an update on private market investment opportunities in the cannabis sector and discuss the themes they are exploring. The discussion will cover several key topics, two of which are at the top of my mind: genetics and the Farm Bill. The evolving legal landscape of cannabis and hemp in the United States has become a significant topic of debate, particularly following the 2018 Farm Bill's legalization of hemp production. This legislative change has inadvertently opened the doors to a burgeoning market for intoxicating cannabis products, leading to a complex situation that intersects legal ambiguity, public health concerns, and economic implications. Ahead of the call, we wanted to break down the main aspects surrounding this issue:
Untangling the Hemp: Navigating the Legal Labyrinth of Cannabis Regulation Post-2018 Farm Bill
Background and Legal Framework
- 2018 Farm Bill: The bill federally legalized the production of hemp, distinguishing it from marijuana based on the THC content. Hemp with a THC concentration of 0.3% or less by dry weight was classified as legal, while plants exceeding this threshold remained classified as marijuana and thus federally illegal.
- Unintended Consequences: This legislative change led to the emergence of a legal market for hemp-derived products, including those with intoxicating effects, which exploit the regulatory loophole regarding THC concentrations and forms and is hurting the legal market for cannabis.
Market Impact and Public Health Concerns
- Growth of a Gray Market: The law's vagueness has contributed to the rapid expansion of a gray market, estimated to be worth $28 billion, encompassing a wide range of cannabis-equivalent products sold over the counter, online, and even through vending machines.
- Public Health Risks: There are significant concerns over consumer safety, particularly regarding the unregulated sale of THC-infused edibles, which pose risks of overconsumption and accidental ingestion, especially by children. The National Association of Poison Control Center reported thousands of cases of acute THC intoxication in children, highlighting the need for regulatory oversight.
Legal and Botanical Clarifications
- Cannabis: Scientifically, both hemp and marijuana produce intoxifying cannabinoids, differing primarily in their THC content. This botanical overlap adds to the complexity of effectively regulating these plants and their derivatives.
- Chemical Complexity: The focus on delta-9 THC in legislation overlooks other intoxicating cannabinoids like delta-8 and delta-10 THC, as well as THC in forms that become intoxicating only when heated, such as THCa.
State Attorneys General's Call to Action
- Bipartisan Coalition: A coalition of 22 state attorneys general has called on Congress to address the legal ambiguities and to explicitly define intoxicating cannabis products as federally illegal, thereby aiming to close the loophole that currently exists.
- Diverse State Representation: The coalition includes states with varying stances on cannabis legalization, from those where it is fully illegal to those with recreational and medicinal cannabis industries, highlighting the widespread concern over the issue.
Industry and Regulatory Response
- Industry Growth vs. Regulation: While the legal hemp industry acknowledges the problems associated with unregulated products, there is a call for regulation rather than prohibition. Industry representatives argue for the importance of FDA regulatory oversight, which was promised in 2019.
- FDA's Role: The Food and Drug Administration's failure to establish clear regulations for hemp-derived products has been a point of contention, with calls for it to fulfill its promise to regulate the market to ensure consumer safety and product integrity.
Future Directions
- Legislative Adjustments: There is a pressing need for legislative clarity to reconcile the legal status of hemp and its derivatives with public health and safety concerns.
- Balancing Growth and Regulation: Ensuring the hemp industry's growth while implementing stringent regulations to protect consumers from intoxicating products represents a significant challenge that policymakers, regulators, and industry stakeholders must address together.
WEEKLY PRIVE PERFORMANCE
The cannabis industry had a predominantly positive week, with over 70% of the stocks showing gains on average of 11.9%. Several stocks had impressive gains exceeding 30%, suggesting solid momentum in the sector. The ETF performance also reflected the positive sentiment, with most cannabis ETFs posting gains. However, there were a few notable decliners, with urban-gro Inc (UGRO) seeing the largest drop. Despite some negative performers, the overall industry trend appears favorable for the week.
Positive Performers:
- Most stocks (27 out of 38) showed positive price changes.
- Canopy Growth Corporation (CGC) had the highest gain at 89.25%.
- Other top performers include Acreage Holdings (ACRDF) at 49.12%, GrowGeneration Corp. (GRWG) at 41.58%, WM Technology (MAPS) at 39.21%, and Clever Leaves Holdings (CLVR) at 38.74%.
- 9 stocks had gained over 30% but are not in the MSOS, indicating a broadening and maybe unwarranted outperformance.
Negative Performers:
- 11 stocks had negative price changes.
- urban-gro Inc (UGRO) had the largest decline at -34.45%.
- Medicine Man Technologies (SHWZ) and Lowell Farms (LOWLF) also saw significant drops at -16.33% and -10.39%, respectively.
- Most negative changes were relatively small, with 7 stocks falling less than 6%.
