The marijuana industry just had a train wreck, a terrible, terrible end of 2021, is there hope in 2022?

2021 couldn’t have ended worse for the marijuana industry, is there hope in 2022?

They say that in all bad situations there is a silver lining or that it is always darkest before the light. For the marijuana industry in America, the end of 2021 was one blow at a time that shattered dreams of state legalization for millions of people across the country. How bad was the end of 2021 for the cannabis industry, let’s count the ways:

No safe banking law – Even those who oppose full legalization came as a shock, the Safe Banking Act was removed from the Defense Spending Act. With no clear passage for local marijuana companies to get bank accounts and pay taxes with checks, the glimmer of hope went to gradual federal changes for 2021 and possibly 2022 to the hip industry because it was a law that did not require anyone to consent to the legalization of medicinal or recreational cannabis in general, just that the state-owned companies already in operation could use banks, deposit funds, obtain merchant accounts, and protect their employees from possible crimes such as burglary and assault. This wasn’t a general approval of marijuana legalization in principle, just the fact that you want to protect American citizens who work in the cannabis field from crime, allow companies to properly pay taxes and bills, and create a paper trail for millions of dollars in cash receipts . You didn’t have to be a weed advocate to get Safe Banking approval, only to believe that the dispensaries with millions of cash bills created a high risk environment for the neighborhoods and the company’s employees. This was more of a public safety bill than a pro-cannabis bill, and it didn’t even find enough support to be included in the Defense Spending Act.

Visa warns of cashless ATMs – Since marijuana companies cannot have bank accounts or credit card processing, many stores and MSOs rely on “cashless ATMs,” a workaround designed to facilitate point-of-sale pharmacy transactions. Studies show that the average order size increases by 30% when payment bypasses like these are introduced. Many companies rely on this workaround to process a transaction and stay with the company. Visa is aware of how cannabis companies bypass the “marijuana company credit card machines” and has issued a stern warning stating that they are aware of the situation, they know it is wrong and they will face penalties and fines continue for traders who use such tactics. Fines can be retroactive and enormous, and we expect Visa to make an example of some members of the marijuana industry, pushing for jail time, money laundering allegations, wire fraud, RICO law violations, etc. Setting up these fake companies and fake credit card accounts for EAZE delivery are in jail and are currently in federal prison to come up with ideas similar to the Visa and Mastercard rules.

To sum up the first two points, no bank accounts, no credit card processing, and oh, by the way, your workaround system is ready and we are after the people who cheated the rules with a cashless ATM system. Not good.

Midterm elections – If you thought it was difficult to get a sixty majority in the Senate now to legalize cannabis, wait for the Democrats to lose a few seats in the upcoming midterm elections. To quote a famous phrase, “This should be the best time?” Remember when Georgia went Democratic and we “won the Senate” because the Senate was split, but Vice President Kamala Harris, if it was split, won one Was a tie? The Democrats, in some ways, have the Presidency, the House of Representatives, and the Senate, and they still have far too few votes to pass federal legalization. The moral of the story is not going to get better politically, just downhill from here as Republicans win some seats back with voter unrest over COVID, vaccines, Biden, gas prices, etc.

Mitch McConnell still hates weed – The Evil Emperor himself still hates the legalization of marijuana and will block it until he is no longer in the Senate or Citizens United tells him it is okay to legalize it now. Big pharma, tobacco, and alcohol have so much power and influence over elected officials through PACS like Citizen’s United that it’s clear that marijuana legalization won’t happen until those stakeholders say so. Until Mitch and his eight-man band of Republicans decide to legalize weed, the Senate may never be able to get the legalization passed. Mitch even poked fun at Democrats again for trying to incorporate the Safe Banking Act into defense spending law. Why a Kentucky senator is so opposed to marijuana is a mystery to me, but he is, and we won’t see weed legalized until Uncle Mitch says it is time. Sorry cannabis world.

The prices of cannabis stocks reflected the pain – The green rush, as it was called, into cannabis stocks where generational wealth was to be created felt the pain of the terrible events at the end of the year. Even the stocks of large MSOs like Curaleaf and Green Thumb Industries fell and continued to decline. As Wall Street says, “Never try to catch a falling knife,” with no hope of gradual legalization, we could see even lower lows in cannabis stocks. Once a surefire thing, Curaleaf peaked at $ 18 per share and is now trading at $ 8.60. Green Thumb once at $ 38 per share, not $ 19 per share, and those are the safe cannabis stocks. SPACS, or public “black check” shell companies used by some in the cannabis industry to go public, fell off Wall Street, just as cannabis companies used them to go public. Weedmaps, or MAPS, the darling of the cannabis software industry, has posted excellent numbers, but the SPAC-listed share price rose from a high of about $ 28 per share to $ 6.23 per share at the time of this writing. The scary part is that without a catalyst like state legalization to increase stocks, there’s not much reason to hope for massive price gains, as the numbers for the MSOs are already feeding into future earnings.

Are there any silver linings?

At the federal level, no. As Morgan Fox pointed out on the Green Rush LIVE show recently, there has been massive growth and sustained momentum at the state level as more states start at least one medical program and those with medical programs start legalizing recreational activities. If you’re grabbing straws and being the eternal optimist, you can sleep better at night knowing that some more states will legalize medical or recreational activities in 2022. Fewer and fewer people are being arrested for marijuana possession in the US today compared to 5 years ago, which is also a good trend, but nowhere near the marijuana industry’s goals for 2021.

Europe is by far a highlight for the cannabis industry worldwide. While many, including this site, said they didn’t expect global legalization until the US was legalized first based on the UN drug treaties, the rest of the world treated the UN as usual, ignoring and legalizing it. More and more countries are legalizing cannabis without US approval or are waiting for the US to legalize it for access to US financial systems. Germany was by far the biggest gain for the marijuana industry as it approved recreational marijuana for 2022, much like Canada as a country in 2018. Mexico, Malta, Guernsey, Costa Rica, Belize, Jamaica, and a host of other countries are doing the process of legalizing cannabis in some form in 2022, even if they all start with national medical marijuana programs. So much for UN drug treaties, too much money and the opportunity to worry about being verbally abused at the next UN meeting. Oh, COVID has unfortunately canceled the next face-to-face meeting of the UN.

The good news is that it can’t get much worse for U.S. legalization. At some point by the end of 2022, there could be nearly forty states that have at least approved medical marijuana programs. Since there are only fifty states, some assume that once 40 to 45 states have at least 40 to 45 states have at least medical cannabis, some assume that federal laws will have to change, right? I don’t know if I would get on that train while Mitch McConnell is the Kentucky Senator. We could have forty-eight out of fifty states with medical marijuana and Mitch couldn’t put up with federal legalization.

It’s dark out there right now, but doesn’t that mean the light is about to break through?

WHAT CAN WE SEE IN 2022? CONTINUE READING…

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