Was some pretty solid evidence to suggest that Cannabis is set to officially be rescheduled from Schedule 1 to Schedule 3.
The move was put down to the tweets by Doug Kass (Seabreeze Capital Partners LP) indicating the imminent changes. As well as their position/brief outlook on their holding positions. Doug has historically been on the money and there seems to be a substantial number of Fund managers that take his advice very seriously.
As well as suspected amendments to the SAFER Banking Act, basically removing a bunch of regulatory and taxation hurdles to the cannabis industry being profitable.
https://twitter.com/dougkass?lang=en
Not sure if we will see Aus Cannabis shares trade positively based on this news or suspected scheduling. But more news and publicity coming from the US is inevitably going to flow through to Aus. Additionally, Australia is always hesitant to make substantial reforms prior to our American counterparts. USA makes a move and Australia inevitably follows. A tale as old as time. Our government seems to be quite suppressed by the US, although we can’t make big decisions like this ourselves.
My relatively optimistic prediction is that within the next 3-6 months we see substantial global regulatory and policy change in the industry. USA upcoming election, Australian election nearing, Cannabis a widely contentious issue that may determine where a lot of people start voting (given 3-4% of Aus has had a prescription for cannabis in the last 12 months AND 12% have used recreationally in last 12 months AND near 40% have used in their lifetime, all increasing figures in relation to previous elections). There’s too many incentives to continue turning a blind eye to it. Cannabis shares were highly speculative in 2021, most companies trading ~5-10x where they currently are. They were exceptionally overvalued. Now, with regulations more favourable, exports and vertical products, more prescriptions and more new markets, we are exceptionally undervalued. The market has not understood what ‘fair value’ is in the industry, because it’s new, because they got burnt by the hype.
IMO, this hype will return, we will see higher highs as investors see the opportunity. The likes of ECS I expect to be overbought, and when the change happens it will be rapid. How there hasn’t been a steady grind north is honestly baffling. Give it 3-6 months, investors will put their money where the medias mouth is, as they always do. One quick look at Google trends and you’ll see how much people are talking about Cannabis and medicinal cannabis, it’s nearing a point where it is too loud to ignore. We are on the tail end of the dip, but the dip, that’s how you make money. I’m holding until we are at least at a 200mil MC. Which for the potential no.1/2 producer in Australia is very very reasonable (15c).
GLTAH and keep watching the news, let’s hope the continued positive sentiment flows into institutional investors noticing ECS.
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