Cannabis Musings - December 30, 2024
Wherein we consider our predictions from January.
Friends – it’s time to look back and see how our predictions for 2024 panned out. Let’s see if we did better than investment banks do with the stock market (i.e., poorly):
SAFE(R) Banking still won’t be a law. Still.
This prediction is like the goose that lays golden knishes. It never fails.
The DEA will reschedule cannabis to a Schedule III controlled substance, releasing 280E’s death grip from the industry. It’s not going to go to II, because that would be pointless. It’s not going to go to IV or V, or off the schedules entirely, because we can’t have nice things, and because there’s no way that happens without a full federal regulatory/taxation scheme in place.
Wrong in that it didn’t happen in 2024, but it’s still headed in the right direction, and Schedule III is the only change under consideration.
Congress will pass the 2024 Farm Bill closing the “loophole” (arguably) allowing hemp-derived cannabinoids to be sold legally. Large retailers like Total Wine will stop carrying these products, but otherwise, they’ll still be produced, sold, and shipped, and the FDA and DEA will continue to do nothing about it (c.f. hemp-derived CBD products).
Also wrong that it didn’t happen in 2024, and maybe Congress will actually do its job and pass a Farm Bill in 2025. Oh, but the FDA and DEA sure didn’t do anything about it.
Cannabis will not be a major, or even middling, topic of public interest in the 2024 presidential campaign.
Oh, this was so wrong. For every delicious knish, there’s a lukewarm can of Dr. Brown’s Cel-Ray soda (which, yes, is really celery-flavored). I was genuinely surprised that cannabis became a real topic of conversation during the campaign, because I’m convinced that the general public and federal politicians don’t care as much about our industry as we think (or hope) they do. My cynicism got the best of me on this one, but for the better.
If the Florida Supreme Court doesn’t reject it (I’m not gonna try to predict that), the state’s 2024 ballot measure to approve adult-use will pass.
Another can of celery soda here.
New York City will finally make some progress in turning back the tide of unlicensed cannabis shops, helped by licenseholders exerting political, lobbying, and financial pressure to protect their investments. I also have a feeling that Western states will start to take more seriously the outflow of licensed products into newly-legal states, particularly as word gets out, but maybe that’s just wishful thinking.
This seems to have been somewhat correct. Even if you discount the city government’s claims, it does seem like there are fewer unlicensed dispensaries and cannabis trucks around.
The lawsuit filed by Boies Schiller challenging the Controlled Substances Act’s death grip over intrastate cannabis commerce will fail.
Correct, but this was unfairly easy, because this has always been a play towards the U.S. Supreme Court, which takes time.
Material institutional capital still won’t flow into cannabis because it still won’t be legal (the real problem – not TSX exchange listing or custody/clearing), leaving the industry capital constrained for yet another year. Oh, and US stock exchanges still won’t list US cannabis stocks – rescheduling wouldn’t change that.
Correct, unfortunately.
We haven’t seen the end of large restructurings with companies converting debt into significant equity positions.
Correct – 4Front and RIV were just two examples, along with the purchase of Eaze’s assets by its largest creditor in a foreclosure sale brought about by said creditor, and FiSai’s missive to The Cannabist Company (née Columbia Care) suggesting the same.
Am I proud of the fact that I was mostly right in my predictions? Feh! Gadles ligt oifen mist. (“Fooey! Pride lies in the dung heap.”) You spend enough time observing and thinking about this industry, you come to expect the worst, which unfortunately has been the right approach for the past few years.
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Thank you once again for joining me for another year in our cannabis industry journey. This industry is really hard in just about every respect, but, like others, I stick with it because of the mensches whom I’ve met along the way. I appreciate the opportunity to share my observations about this industry, for your continued engagement in the conversation, and for sticking around to build something. We’ll talk again in 2025.
Be seeing you.
© 2024 Marc Hauser. None of the foregoing is legal, investment, or any other sort of advice, and it may not be relied upon in any manner, shape, or form. The foregoing represents my own views and not those of Jardín.