Cannabis Sector - A worthy consideration for 2025?

In this edition of the Bullfinder AI newsletter, we take a closer look at the Cannabis Sector. A strong ‘under the radar’ performance over 2024 has piqued our interest.

Here’s what the Bullfinder AI Tech and Team have to say about Cannabis over the coming year…

Price History since Inception in 2020…

Cannabis as a commodity has been tracked officially as an index since around 2020. As you can see from the chart above…

• The Cannabis Index peaked early in 2021, extending to reach an all-time high of $6,027.

• The Cannabis Index (and associated stocks) steadily declined following the 2021 peak, reaching a low of approximately $1,100 in June of 2023.
  

• Price has since clawed back to $1,556.40 - Representing a gain of over +40% since 2023 lows.

Latest Industry Developments…

What’s been going on in the Cannabis industry and have there been any meaningful changes that may hint at future prosperity of the industry?

Here are some key takeaways from the recent Benzinga Cannabis Capital Conference:

1. In New York alone, over 165 legal dispensaries are now operating, with legal sales to date reaching over $529 million.
    

2. The industry remains within a ‘grey’ legal zone, still awaiting the green light upon successful rescheduling by the DEA
   

3. The DEA announced that it would only consider conducting a hearing on rescheduling Cannabis after the November election
   

4. Although it was speculated that a 2nd Trump term would stop any progress being made in the industry, David Mangone (vice-president of The Liaison Group) reminded attendees of Trump’s support of Florida’s ballot efforts to legalize cannabis

Rescheduling & Implications…

What does ‘rescheduling’ mean, and what would be the implications if successful?

As it relates to Cannabis, ‘rescheduling’ refers to the process of re-categorizing Cannabis away from its current category ‘Schedule I Substance’, and instead, classifying it as a ‘Medicine’, where representatives can then seek FDA approval for its use across the US.

If the DEA does reschedule Cannabis from a ‘schedule I substance’, to a ‘medicine eligible for FDA approval’, it would have significant implications for cannabis companies’ profitability, via reprieve from Tax Code-280E.

At present, the debilitating Tax Code-280E prevents Cannabis companies from deducting expenses ‘associated with trafficking illegal schedule I substances’ from their top line revenue.

Rescheduling is regarded as the major hurdle to legitimize the Cannabis industry, and finally make it a viable enterprise in America.

Bullfinder AI Tech Rating…

For specific price & momentum guidance, please review details within the below publication…

The Team at Bullfinder AI will continue to monitor this industry for updates and any rapid developments, and we thank you for taking the time to read this article.

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Thank you for reading! We look forward to sharing future updates with you…