EXCLUSIVE: Key Insights And 4 Predictions On Cannabis Sector Equity Research For 2024

In an exclusive preview from Zuanic & Associates' recent cannabis equity research report, Benzinga reveals four key predictions for the next 18 months.

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Now Read: EXCLUSIVE - Strategies From 4 Cannabis Industry Leaders To Combat Price Compression, Alternative Cannabinoids

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In an exclusive preview from Zuanic & Associates' recent cannabis equity research report, Benzinga reveals four key predictions for the next 18 months.

The SAFE Banking bill is expected to pass in the fall of 2024. Key Senate players will aim for a "midpoint" compromise on add-ons and Section 10. Senate passage is likely to put pressure on the House Speaker, given that half of his caucus is in favor.
The Biden Administration is expected to reschedule cannabis before the November 2024 election, possibly as Schedule II or III. That could have significant implications, including the elimination of the Section 280E tax code provision for medical cannabis. It would also require a regulatory framework for federal legalization, involving the FDA and potential interstate trade of medical marijuana. The likelihood of rescheduling is estimated at approximately 65% with a relevance score of five.
The TSX is likely to experience a wave of listings for multi-state operators (MSOs), impacting Canadian MJ asset prices due to FOMO (fear of missing out) concerns. TerrAscend (OTC:TSNDF) is seeking a TSX listing has opened strategic options and increased capital access. More MSOs are expected to follow suit, attracting investors looking for TSX-listed options, potentially leading to the reflation of some Canadian MJ assets. Likelihood: >70%; Relevance: 4.
Depressed valuations in the sector and increased involvement of Consumer Packaged Goods (CPG) companies in the space, such as British American Tobacco (LN: BATS) investments in Organigram (NASDAQ:OGI) as well as Charlotte's Web (OTC:CWBHF). Imperial Brands (OTCQX:IMBBY) still holds convertible debt on Auxly (OTC:CBWTF). Molson Coors (NYSE:TAP) and Anheuser-Busch InBev (NYSE:BUD) walked away from deals with HEXO (NASDAQ:HEXO) and Tilray (NASDAQ:TLRY), respectively. Altria (NYSE:MO) had a somewhat better experience with Cronos (NASDAQ:CRON) despite "cash burn" issues. "If there are signs of true global players emerging, we do not expect CPG to sit this out," the report states. Expect pharma giants to be involved as well if rescheduling takes place. Likelihood: >65%; Relevance: 5.