Is Good News the New Fake News in the Cannabis Industry?

I don’t wake up every day trying to be the curmudgeon of the cannabis industry. I would like to say things are looking good, there is good news, the light at the end of the tunnel is not a train coming the other way, but unfortunately it seems that the cannabis industry is trying so hard to find a silver lining, the truth behind the title is really just another bad news. You may remember our report on the Benzinga Cannabis Capital Conference in Miami where the best idea we heard over 3 days was to get licensed and start selling legal cocaine in Canada.

Last week was no different. Cannabis stocks soared on the umpteenth news of a bipartisan group in Congress reinstating the SAFE Banking Act on Marijuana Moment. Even pro-cannabis Republican Nancy Mace has been promised by House Speaker Jim Jordan that there will be a fair and open discussion on the issue when the time comes. Sorry Nancy, fool me once, shame on me, fool me twice, or in this case 14 times, shame on me.

What really happened last week? Republicans blocked a motion to include a bill that would examine how medical marijuana can help veterans with PTSD. If there’s one group that Republicans can be said to empathize with and support almost every bill and front, it’s the military. Forget SAFE banking and Democratic pushes to legalize cannabis, Senate Republicans won’t even hear debate on a bill that could help veterans with PTSD get some relief and sleep at night by toking a joint.

Republicans don’t even want to hear how veterans who suffer from night terrors and wake up in cold sweats could find relief with some elements of the cannabis plant. Does anyone think SAFE Banking, which legally deposits cannabis sales proceeds from recreational and medical sales into US federal banks, stands a chance?

The second positive head-fake headline last week was that market research group BDSA sees “lots of bright spots” and “lots of excitement” for the marijuana industry in 2023. COO Liz Strahura caught up with Green Market Report’s John Schroyer at MJ Unpacked in New York City for an interview.

bright spots? Really?

From John’s summary, Liz sees 1. The cannabis roller coaster doesn’t seem to be slowing anytime soon 2. 13% decline in mature markets over the past year, but Missouri and Illinois are growing. Everyone in the industry wants to talk about Missouri now? How about the Midwest illegal market being fueled by the fields of southern Illinois? 3. She forecasts a 14% increase in sales this year as new states come online. If I do the math over 24 months of 2022 and 2023, we expect to be flat (-13% and +14%, respectively), and that means WITH new states starting with their first sales and all the fanfare that goes with it. So if we didn’t add new states and markets, the sales forecast would still be negative, that’s how this math works. 4. Liz also says we will see a slight contraction in 2023 but growth could start in 2024. I’m not sure how that sentence fits into your early statements, but I digress. 5. We will see price declines flatten out, but there will still be strong competition from the illegal markets.

If this interview qualifies as “bright spots” and “lots of excitement,” then call me crazy.

We won’t see a real bottom in the price decline until we have state legalization and interstate trade. Then a true market bottom is reached, as oversupplied markets can supply excess inventory to lower-supplied markets (thereby crushing their prices), and we all learn what an indoor ounce, an Emerald Triangle ounce, and an outdoor ounce cost when they do correctly delivered to the consumer’s doorstep.

As Cannabis.net reported on the election, the moment for real marijuana reform was when Joe Biden was elected president, Harris, his vice president, co-sponsored a bill legalizing marijuana, Georgia flipped the Democrats and gave the Democrats a small window gave in which they had a majority in the House, a tie in the Senate, and VP Harris is the deciding vote.

Even when the gods announced the democratic opening, the cannabis reform could not be pushed through.

As Cannabis.net has always said and confirmed with those in Congress, if Mitch McConnell says so, cannabis will be legal in America and by the way he has thrown the SAFE Banking Act out of the Senate before and will do so again.

Unfortunately, that is the sad state of cannabis reform in America.

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