Cannabis Musings - July 16, 2025

Cannabis stock prices (generally) still don't pay attention to reality.

Friends, we’ve talked before about the fact that cannabis stock prices are almost entirely dislocated from reality. Although the US industry’s depressed nature has been accurately reflected in the sector’s performance over the past few years, there’s little distinction made between the better-performing (i.e., less bad) companies and everyone else. Instead, the stocks of US operators generally move in tandem, driven seemingly solely by social media speculation. It's not much different from the Reddit-fueled meme stock trend, where retail (non-professional) investors drove up prices of particular, obscure (and not-so-obscure) stocks based on r/wallstreetbets posts. Someone even made a movie about that.

I don’t think anyone is going to make a movie about the irrationality and delusion of cannabis stock prices, although if they did, it would be a Bergman-esque black-and-white art film narrated by Werner Herzog and scored by Philip Glass. Its name - “Greenness of Despair.”

The past week has been a textbook example of this phenomenon. It was widely reported that a bevy of pro-Trump influencers and supporters were visiting the White House to try to rally support for federal cannabis reform. This included the rumor that Trulieve was looking to hire ex-Congressperson Matt Gaetz to advocate/lobby for the industry. Remember Matt Gaetz? The guy who resigned from Congress right before an ethics report concerning alleged misconduct involving drugs and underage girls was reportedly about to be released, and then President Trump nominated him to be the next Attorney General, but that didn’t happen because the Senate signaled that the nomination would fail because he was so unliked? Don’t get me wrong – short of outright bribery, the industry really needs this kind of targeted, insider networking if it’s going to have any success persuading the Trump Administration to actually act on the federal cannabis reform that Trump has barely acknowledged to date. But looking to Matt Gaetz to save our industry is like Major League Baseball thinking Chuck Barris would have made a good Commissioner of Baseball.

Cannabis stock investors, hungry for any positive news, jumped at these reports, bidding up stock prices quickly and sharply. But, as we’ve talked about here before, those gains didn’t hold, simply because their catalyst lacked any real substance.

The cotton candy-fueled sugar rush just didn’t last because speculation and hope can’t survive the reality of actual cannabis policy news, something cannabis stock investors just keep forgetting over and over again (not investment advice!). Not only did we learn earlier this week that Congress is trying to block the rescheduling process (not that that’s making any progress), and the FDA is (finally?) getting around to sending warning letters to producers of hemp-derived THC products (which tested out at over 300mg/serving of D8-THC!), but the industry was shocked by the very real Immigration and Customs Enforcement raid on two Glass House cultivation facilities in California. For an agricultural industry that has championed social equity, the raid came as a real blow.

Now, if there is any silver lining to what happened (and I realize that this is a real stretch), it’s that we just saw dozens of federal agents raid two large cannabis grow operations and they didn’t shut the greenhouses down or seize the federally-illegal controlled substance that they grow (although new reporting suggests maybe there’s more going on). Ver volt dos geglaibt? (“Who would have believed it?”). Another reminder that logic doesn’t apply to cannabis policy.

And yet, I see all of this as continued forward progress for our industry. The more the problem of federal cannabis policy is in the news, the more support we’re going to generate for true reform. More support is only going to make it harder for government agencies to reverse the trends of the past decade, and any sort of regression won’t last. The swift, vocal public and industry reaction and pushback to the Glass House raids, and I suppose, yes, even the hiring of a disgraced ex-Congressperson as lobbyist, are great examples of how the industry is doing a much better job than in the past of steering the narrative. It’s driving us towards the inevitable, however painful it is to get there.

Gelt farloren, gor nit farloren. Mut farloren, alts farloren. (“Money lost, nothing lost. Courage lost, everything lost.”)

Be seeing you.

© 2025 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, B&Y Ventures, or anyone else who employs/hires me.