Seeds Of Change In The Weed Industry 🔀

Dive into cannabis's crossroads—balancing distress and opportunity, women cultivating change at home, and new horizons in research and global policy shifts.

Author

Patricio Liddle
November 19, 2024

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Happy Tuesday folks! Pato Liddle here. In today's newsletter, we explore the cannabis industry's balancing act between financial challenges and hidden opportunities. We'll look at women leading the homegrown movement, Ohio's controversial hemp ban, and international strides in cannabis reform. Let's dive into these seeds of change reshaping the industry!

As the cannabis sector braces for a post-election reckoning, investors face critical questions about the value of distressed equities. Giants like Verano, Green Thumb, and Gold Flora are navigating a volatile landscape shaped by mounting debts, regulatory hurdles, and the elusive promise of federal reform. Analysts like Pablo Zuanic predict a gradual shift toward rescheduling cannabis, but tangible relief may not arrive until late 2025. Meanwhile, companies reliant on key markets like Florida are particularly vulnerable, as Verano’s 44% stock drop post-election illustrates.

But in this dynamic industry, even financially distressed cannabis stocks might hold hidden value. According to Viridian Capital Advisors, these equities hold untapped potential through option-based valuation. By viewing equity as a call option on assets, even companies with liabilities exceeding their market cap retain strategic value, especially as they liquidate or restructure. Think of it like a lottery ticket: if a company's assets eventually outweigh its debts, shareholders could still cash in.

The cannabis sector is fraught with challenges but remains rich with opportunities for those willing to bet on a future of change.

Ohio Hemp Ban Sparks Industry Backlash

The Ohio Healthy Alternatives Association (OHAA) has slammed Senate Bill 326, calling it a “catastrophic” measure for the state’s hemp industry. Representing nearly 3,000 small businesses and over 26,000 workers, OHAA warns the bill could eliminate 20,000 jobs and cause widespread financial losses. Introduced by Senator Steve Huffman (R), the proposed legislation would impose stricter THC limits than federal guidelines, potentially removing products like full-spectrum CBD oils from shelves. As Ohio's cannabis market thrives, advocates are urging Governor Mike DeWine to veto the bill, citing its rushed and flawed nature.

Women Lead In Homegrown Cannabis

Home cannabis cultivation is blossoming, and women are leading the way. A recent survey by I Love Growing Marijuana (ILGM) found that 60% of home growers are women. Many growers find the practice therapeutic and stress-relieving, with 57% saying it helps them take control of their health. While challenges like managing plant growth exist, the supportive community makes it easier to learn and share tips. As regulations relax, more people are embracing home growing as a fulfilling and empowering hobby.

Curaleaf has made history in Massachusetts, securing the state’s first-ever marijuana research facility license in Newton. Approved unanimously by the Massachusetts Cannabis Control Commission, this license paves the way for Curaleaf to delve into cannabis research aimed at enhancing public health and safety. With only 15 such licenses nationwide, Massachusetts is positioning itself as a leader in cannabis research and policy development.

Czech Republic Eases Cannabis Laws, But There’s A Paradox

To wrap up today's newsletter, let's swing by the Czech Republic, where the government just gave the green light to growing up to three cannabis plants at home and possessing up to 50 grams. Justice Minister Pavel Blažek says it's about time they updated their "outdated" laws to align with the rest of the EU. However, some critics, like the liberal progressive Pirate Party, think the new rules are a bit off—they point out that you can grow the plants but might exceed the possession limit once you harvest them. They're pushing for higher limits to make the law more practical, especially for medical marijuana patients.

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Our Writer Today

Patricio is a development economist with extensive experience in IT, finance, and banking. He writes about the economic and social opportunities obscured by over half a century of failed drug prohibition. Beyond his professional expertise, Pato is a committed advocate for social change, passionately working to promote harm reduction and reform drug policies.

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