Cannabis Chart Of The Week: Which Companies Have The Most Upside And Downside From A DEA Announcement?
Portfolio Pulse from Viridian Capital Advisors
The Viridian Chart of the Week analyzes the potential impact of a DEA announcement on the top 15 Multi-State Operators (MSOs) in the cannabis industry. The MSOS ETF has seen a significant increase since the HHS rescheduling announcement but has dropped from its peak. Stocks like SHWZ and CBSTF have declined since the HHS announcement, suggesting less downside risk from negative DEA news. Conversely, stocks like AYR Wellness have seen substantial gains, indicating higher risk. The chart also considers the upside potential if the DEA ratifies Schedule 3, with stocks like TCNNF and Cannabist potentially seeing significant gains. Viridian suggests that gains could be even higher, referencing past price levels after the SAFE Act and Schumer/Booker proposal.
December 04, 2023 | 5:30 pm
News sentiment analysis
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NEUTRAL IMPACT
MSOS ETF has risen 41.4% since the HHS announcement but has fallen from its peak gain of 85%. The ETF could see further fluctuations depending on the DEA's decision on cannabis rescheduling.
The MSOS ETF's performance is directly tied to the regulatory environment for cannabis. Positive DEA news could lead to a rebound towards its peak, while negative news could result in a decline.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80
NEUTRAL IMPACT
Medicine Man Technologies, trading as SHWZ, has declined 18% since the HHS announcement, indicating limited downside from negative DEA news but also limited upside from positive news.
SHWZ's decline since the HHS announcement may have already factored in regulatory risks, implying a muted response to future DEA announcements.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 60
POSITIVE IMPACT
Cannabist, trading as CBSTF, has seen a 16% decline since the HHS announcement, suggesting a lower risk profile in the face of DEA news, with potential for significant upside.
CBSTF's decline indicates that negative DEA news may not have a substantial impact, but positive news could lead to significant gains.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 60
POSITIVE IMPACT
Trulieve, trading as TCNNF, has the potential for highly significant gains of up to 195% if the DEA ratifies Schedule 3, indicating a high upside from positive regulatory developments.
TCNNF's potential for substantial gains is based on the assumption that DEA ratification of Schedule 3 will positively impact the stock, mirroring past gains after the HHS announcement.
CONFIDENCE 75
IMPORTANCE 80
RELEVANCE 70