The Cash Crop đź’¸

How much money are U.S cannabis producers making today?

In Today’s Issue:

  • → Leafly’s Report. đź’¸

  • → Cannabis Elections. âś…

  • → JP Morgan's Bold Move. 🛑

Cannabis Is A Major Cash Crop

Breaking down the economic boom the legal cannabis industry has created…

What are the most valuable crops in the U.S today?

To answer this question we would normally look to USDA Research Service, however, with cannabis being federally illegal in the U.S they currently don’t track the value of cannabis.

Instead, Leafly has crunched the numbers.

The numbers…

Cannabis is the 5th most valuable crop today.

U.S farmers produced $6.175 billion USD worth of cannabis from September 2020 to September 2021.

Conversely, the following are the crops that topped cannabis in the last year.

An economic boom…

Cannabis is the most valuable crop in Alaska today, worth more than 2x both livestock & crops.

Cannabis is also the most valuable crop in Colorado, Massachusetts, Nevada & Oregon — despite the fact that cannabis is illegal on a federal level.

Our Take

With the legal industry now providing more than 320,000 full time jobs, it’s becoming very clear that cannabis is good for business.

Allowing adults to purchase, cultivate & consume cannabis is what’s driving the creation of these jobs and I look forward to seeing this trend continue.

Cities & States Embrace Cannabis

Breaking down the regions where legalizing cannabis is up for decision…

There is never a dull day in the cannabis industry.

In this edition of Four PM, we will be breaking down the recent elections that have recently taken place which impact the cannabis industry.

Colorado

On Tuesday, voters in Colorado rejected a ballot measure to increase the state’s tax on cannabis products to raise funds for education programs.

The goal was to provide low income families with an education stipend of $1,500, however, this came at the cost of increasing the taxes on cannabis products from 15% to 20%.

With more than 90% of the votes having been counted, 54% of voters have opposed this measure to increase the prices of cannabis products.

Philadelphia

In Philadelphia, Pennsylvania’s largest city home to over 1.5 million people, voters have approved a referendum to legalize cannabis.

This vote received overwhelming support with early results suggesting 73% of people voted in favor with just 27% of people opposing this measure.

The purpose of this vote is to put additional pressure on law markers in Pennsylvania to legalize cannabis at a state level, with the latest polls showing 60% of voters would like to see this legislative reform.

Ohio

Several cities in Ohio were given the opportunity to decriminalize cannabis with 22 jurisdictions having already decriminalized cannabis.

Of the 14 additional jurisdictions voting on this measure, 7 voted in favor of decriminalizing cannabis, with 7 voting against it.

An estimated 3 million people living in the state now have access to cannabis without the threat of receiving jail time.

Our Take

The speed at which cities & states are legalizing & decriminalizing cannabis across the U.S highlights the strong desire to change these outdated laws.

While the U.S government might be content leaving the laws the way they are, it’s also clear that the people living in the U.S aren’t willing to wait.

Stop Trading Cannabis Stocks

The billion dollar bank that doesn’t want to work with certain U.S companies…

A majority of Americans might have access to legal cannabis products, however, U.S banks continue to put policies in place to prevent their clients from purchasing cannabis stocks.

Yesterday, JPMorgan Chase & Co — the $509 billion dollar bank founded in December 2000 told its clients they will no longer allow them to buy certain U.S cannabis-related stocks.

A bigger trend…

This decision by JP Morgan comes just weeks after Credit Suisse also announced it would no longer allow its clients to buy U.S cannabis stocks.

Per the statement JP Morgan released, this decision isn’t being fueled by their dislike of the cannabis industry — rather they are unwilling to take on the risks associated with certain U.S cannabis stocks.

"J.P. Morgan has introduced a framework that is designed to comply with U.S. money laundering laws and regulations by restricting certain activities in the securities of U.S. cannabis Related Businesses” they said.

Moving forward, clients will only be allowed to sell existing positions.

Canadians vs U.S Companies

These restrictions won’t apply to cannabis companies listed on the NYSE or the Toronto stock exchange, rather they will apply to U.S companies listed on any other stock exchange.

Currently, any plant-touching cannabis company with operations in the U.S is prevented from listing its shares on the NYSE which forces U.S cannabis companies to list on smaller exchanges in Canada.

Why now?

As certain assets increase in price, whether that be cannabis stocks or cryptocurrencies — banks such as JP Morgan face pressure from their clients to provide them with access to these assets.

Unfortunately, over the last 6 months this forcing function has not been working in favor of U.S cannabis companies.

The 5 largest U.S cannabis companies have all seen their valuations sharply decline during this time.

  • → Curaleaf is down 36.07%

  • → Green Thumb Industries is down 36.22%

  • → Trulieve is down 39.24%

  • → Cresco Labs is down 38.27%

  • → Columbia Care is down 53.70%

Looking forward…

Per their most recent fillings, JP Morgan has spent over $100,000 USD lobbying for cannabis baking reform in Q1 and Q2 of 2021.

I am not of the impression that JP Morgan is morally opposed to clients purchasing cannabis stocks & they will have no hesitation in allowing clients to invest in these companies in the future.

Our Take

The cannabis industry might employ over 320,000 people in 2021, however, there remains a long list of companies that are seemingly working in opposition to the progress being made to build this industry.

Once all of these constraints have been removed, I have little doubt the cannabis industry will experience significant growth in light of having access to the services just about every industry has.

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