Market participants continue to be resistant and are growing increasingly impatient in their perception of the procedural delays in the rescheduling of cannabis.
By contrast I am using the weakness to further accumulate names in the space as the inevitability (at least to me) of rescheduling to Schedule III and an end date to Schedule I grow clearer. With that rescheduling will likely come more uplistings (and eligibility in index funds), an easing of custodian restrictions and remedy and clarification of UTP treatment (with some retroactive suspension of liabilities and lengthening in tax obligation payouts).
This could lead to a meaningful change in the ownership of cannabis equities from retail to institutional (and index funds) — that has yet to begin.
I suppose this selling was inevitable given the recency bias related to the dramatic decline in share prices over the last five years and the persistent regulatory disappointments — both of which are etched in traders’ and investors’ memories. (It doesn’t help that the general market has become unstable.)
Doug Kass is a world-renowned hedge fund manager with decades of experience and success navigating through some of the most turbulent periods in market history. He is known for his time-tested analytical skills and ability to look past the current noise and herd mentality.
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