The Cannabis Industry and the Inevitable Pendulum Shift

Sentiment for the cannabis industry is at an all-time low. This has been driven by a long downtrend caused by a myriad of issues facing the industry; from oversupply in Canada to slow legislative movement in the US, the cannabis industry simply has had no news to cause the hype and hysteria which ensued back in 2017-2018. However, just as cannabis stocks (and their respective valuations) went well above and beyond anything that resembled reality, pessimism has now too gotten out of hand.

Historic Legislation Pending for US Marijuana Market

No sooner did Jeff Sessions attempt to derail the cannabis industry than he inadvertently lit a fire under it. Session's action drew broad criticism from Congressmen and women across the board. In fact, there was virtually zero support for Session's action to rescind the Cole Memo.

Cannabis Stocks Call Session’s Bluff

Last week, Attorney General Jeff Sessions hinted at a shift in marijuana enforcement, just weeks after signalling he would continue Obama era policy regarding cannabis law. This series of flip flopping left cannabis industry activists and investors alike dazed and confused. Considering the market is a psychological beast, speculation seemed to favor a substantial move lower in cannabis stocks for both US and Canadian stocks in the days following Session's comments .

Game On for US Cannabis Stocks

However, [Sessions] changed his tune during today's congressional hearing where he conceded, "Obama-era guidance that allows states to legalize marijuana without federal interference remains in effect". Further he stated, "I believe we are bound by" a federal budget rider that bars the federal government from spending money to interfere with state medical cannabis laws." These statements were given under oath, so it isn't likely he will go back on his word any time soon.

By | 2017-12-24T09:19:41-05:00 November 14th, 2017|Catalyst Trading|4 Comments