“Now, with Democrats in control, investors are ‘High on Cannabis‘”– Paul Ebeling
Georgia’s 5 January election results, that flipped the Senate to Democratic control, have stoked the embers under the cannabis industry.
Prior, the market for legal US product was forecast to more than 2X, to $41.5-B by Y 2025, according to the data. And now it is being forecast to be better, with more states legalizing faster and national decriminalization possible.
Those institutional shareholders who have watched for yrs from the sidelines for fear of reputational damage or legal repercussions, are now barging in.
Companies are raising cash and reworking their strategies as the prospects grow that Y 2021 could be the yr some of ‘regulatory dreams‘ from gaining access to banking to relief from a crushing federal tax burden coming true.
The legal concerns meant private investors and family offices have traditionally been low profile stakeholders.
The Democrats are now in control of Congress bringing hope to the industry that legislation such as the States Act, which leaves legalization up to individual states but would likely remove the rule that prohibits cannabis operations from deducting ordinary business expenses and allow access to capital markets and banking, the SAFE Banking Act, which would permit banks to do business with cannabis operations, and the MORE Act, which would federally decriminalize marijuana will gain traction in Congress.
Lobbyists for the industry are eager to capitalize on the new momentum, with this message to lawmakers: “You do not want to run afoul of the cannabis voter. They live all over. They are Republican, libertarian, and Democrat. And if you are on the wrong side of this issue, it’s no longer a free pass.”
Friday, the benchmark US stock markets finished at: DJIA -179.03 to 30996.98, NAS Comp +12.15 at 13543.07, S&P 500 -11.60 at 3841.47
The Russell 2000 rallied 1.3% and finished at a record high.
Volume: Trade on the NYSE came in at 1.1-B/shares exchanged.
HeffX-LTN’s overall technical outlook for the major US stock market indexes at the week ended 22 January is from Neutral to Very Bullish selectively.
- Russell 2000 +9.8% YTD
- NAS Comp +5.1% YTD
- S&P 500 +2.3% YTD
- DJIA +1.3% YTD
Looking Ahead: Investors will not receive any notable economic data Monday.
Have a healthy weekend, Keep the Faith!