Pot Analysts Aren’t Freaking Out About Sessions’ Order Just YetBy
Move ‘won’t affect the industry’s trajectory,’ analyst says
Investors may be taking profits after stocks’ recent rally
Cannabis analysts weren’t too worried for the most part about the decision by Attorney General Jeff Sessions to rescind an Obama-era policy that effectively limited federal enforcement of marijuana laws in states where it was legal.
Most industry observers said local governments and state-level AGs are unlikely to crack down in places where weed is already legal, though others warned the move could further hinder the sector’s already limited access to traditional banks. Concerned investors sent the Bloomberg Intelligence Global Cannabis Competitive Peers Index down as much as 24 percent before it ended the day 19 percent lower. Canopy Growth Corp., the world’s biggest pot company by market value, sank 9.9 percent in Toronto.
Here’s a sampling of what analysts had to say:
Height Securities, Stefanie Miller
"Despite the negative headlines, we do not think this will result in a meaningful change relative to the current, more-lenient Obama-era policy, and it will not affect the industry’s trajectory."
"We have not seen any reports indicating Sessions will deploy additional resources for this initiative. Knowing that the effort will receive no additional funding, it’s hard for us to see how the Justice Department will be able to pursue new, broad-sweeping anti-marijuana actions."
"Marijuana legalization public opinion is very high with 64 percent of Americans in favor of full legalization – not really a call-to-action for federal prosecutors to aggressively go after the industry."
Compass Point, Isaac Boltansky
"This development is an undeniable negative for the cannabis industry as it further
clouds the already murky interplay between federal and state laws."
"This policy shift will further hamper efforts to increase the cannabis industry’s access
to traditional banking products."
"We are awaiting additional details on the Trump Administration’s decision, but we continue to believe this administration will ultimately embrace a de facto delineation between medical and recreational cannabis."
Echelon Wealth, Russell Stanley
"The cannabis space has had a huge run, particularly over the past few weeks. Today, this looks like the excuse investors need to take some money off the table."
"The majority of U.S. states have legalized medical cannabis to at least some extent, and 1 in five Americans now live in states that have legalized recreational cannabis as well. The optics of actually enforcing federal law are increasingly difficult to manage."
Cowen, Vivien Azer
"We don’t view this as terribly disruptive, as enforcement decisions will seemingly be left to state-level AGs."
"In legal adult use cannabis states, given the tax revenue generation, we believe local governments and AG’s are largely on-board with legalization."