Welcome to Senior Cannabis Digest. This week we look at rescheduling cannabis, cannabis and fitness, investing in cannabis REITs and more. Enjoy.
Crossing the Rubicon
Saying he is committed to “righting the wrongs” of prohibition, in a video posted on X, President Biden has announced that the US Justice Department is moving cannabis from Schedule I to Schedule III under the DEA’s Controlled Substances Act.
According to Noel Abbott, reporting for Ganjapreneur, the Drug Enforcement Administration (DEA) has submitted a notice of proposed rulemaking, opening a 60-day public comment period.
Echoing points we have made before, Abbott notes that the reclassification could benefit the cannabis industry by reducing tax burdens, particularly by removing marijuana from the IRS code’s Section 280E. This would allow legal cannabis businesses to deduct ordinary expenses, fostering growth in states where the plant is legal. It could also make it easier for scientific research to be conducted around the medicinal benefits of cannabis.
It should also be understood that this is just a step and things can still go awry. There are reports that not all factions within the DEA are prepared to accept this decision quietly, for whatever that’s worth. There are also members of congress who appear eager to turn this policy into so much political mulch.
Still, a win is a win until it’s not.
You can learn more by reading Noel Abbott’s article in the May 16, 2024 issue of Ganjapreneur.com.
www.ganjapreneur.com/biden-announces-justice-department-is-moving-cannabis-to-schedule-iii/?
Stats of the Week
This week’s magic number is $20 billion. Actually, it’s over $20 billion. In the 10 years since Colorado and Washington launched the country’s first adult-use cannabis markets, U.S. states with cannabis legalization policies have generated more than $20 billion in tax revenue on adult-use cannabis products.
Yes, that’s “B” as in billion and that’s without the taxes generated by the sale of medical cannabis.
According to Graham Abbott, reporting for Ganjapreneur, a recent report by the Marijuana Policy Project (MPP)— which covers up to the first quarter of 2024 — found that 2023 was the highest-earning year yet with nearly $4.2 billion in cannabis tax revenue from adult-use sales.
Among individual states, California earned the most last year at just over $1.08 billion, followed by Illinois ($552,166,729), Washington ($532,516,060), and Michigan ($473,303,560).
Said Karen O’Keefe, director of state policies for the Marijuana Policy Project, “State-legal cannabis sales continue to provide significant economic benefits. With over $20 billion generated in adult-use cannabis tax revenue since the first sales began, the legal cannabis industry is providing much-needed funding for crucial services and programs in states across the country. Additionally, the implementation of adult-use cannabis markets has spurred significant job growth, creating hundreds of thousands of new employment opportunities, along with thousands of new small businesses.”
This cannabis thing might just catch on after all.
To learn more, we suggest reading Graham Abbott’s excellent reporting in the May 15, 2024 issue of Ganjapreneur.com.
www.ganjapreneur.com/report-total-u-s-adult-use-cannabis-taxes-have-surpassed-20-billion/?
Cannabis and Fitness
If you are a mature consumer who uses cannabis as part of your fitness routine, you are not alone. A new report released by New Frontier Data shows the following:
• 14 percent of cannabis consumers queried said they use cannabis either before or after their workout.
• 47 percent said they use cannabis before a workout to “kick start” their motivation.
• 47 percent said they use cannabis to soothe sore muscles and 33 percent said they use it for a speedy recovery after exercising.
The research team also noted there were some gender-based differences in the responses they received when it comes to using cannabis as part of an exercise routine. For example, 56 percent of the women who responded said they favor using cannabis to address post-workout soreness. On the other hand 40 percent of men who responded said they like to incorporate cannabis into their weightlifting routines.
To view these highlights from the New Frontier Data study, which was published in an infographic format, simply click on the link that follows.
info.newfrontierdata.com/cannabis-fitness-infographic?
Cannabis News and Notes
Much continues to be made, particularly by critics, of the availability of cannabis that contains what is described as a particularly high percentage of THC, the active ingredient that produces intoxication.
According to the website Seeking Alpha, the DEA noted in its 2024 “National Drug Threat Assessment”—released May 9— high THC levels in cannabis are “increasing the potential risk of negative effects on users of any form of the drug, and on children who may consume edibles made with these substances.”
However, Dana Smith, writing for the online publication Cannabis.net, makes the point that high potency cannabis can be a legitimate and useful option for some consumers, particularly those who use cannabis for medical reasons.
Smith points to a recent study by German researchers that shows that medical marijuana patients who consumed high THC flower reported little side effects. For the study, researchers polled over 1,000 patients in the country who were legally authorized to consume medical marijuana. The participants consumed laboratory tested cannabis flower sourced from pharmacies around Germany, with the most common chemovar testing at 22 percent potency.
While acknowledging that those who are unfamiliar with high potency cannabis can feel uncomfortable when consuming high THC products by smoking or ingesting potent edibles, Smith noted that potent THC cannabis flower or other cannabis products can also have benefits when done right. For example, medical marijuana patients find it much more economical to consume potent THC products, because a small amount will go a long way.
As a result, consumers may save money when they consume less of a high THC product. There are also individuals who are capable of metabolizing THC so much faster than others, and thus tend to consume more. For example, people who suffer from chronic pain and pain-related conditions may need to frequently have THC in their system to feel better.
Writes Smith, “As with all things, consuming THC mindfully and responsibly is key. You can minimize the risk of unwanted side effects associated with THC when you start low and go slow. as well as keep some CBD around just in case.”
Clearly, consumers also have a responsibility to store high-potency products in a secure manner, away from children and others to whom they might pose a danger.
You can learn more by reading Dana Smith’s article in the May 15, 2024 issue of Cannabis.net.
Cannabis Quote of the Week
“So, the play that I own in the cannabis space right now is Innovative Industrial Properties (IIPR). It’s a REIT that specializes in cannabis growing real estate that they will rent out to the companies in the space. To me, that is sufficiently upstream from cannabis sector itself, primary production, that it’s a bit of a safer play.
Now, as far as what I’m looking for, for the companies that are in the space, the thing that I keep coming back to is two things.
One of them is operating profits consistently regardless of the price of cannabis in the place that they’re marketing at. And two is who can develop a competitive advantage in either low-cost production at scale or branding. And there’s progress on all those metrics in the past few quarters, but there still is not to me.I’m looking for the Bud Light of cannabis. That’s what I’m trying to invest in the company that makes the Bud Light of cannabis products. And I believe that eventually there will be one, but I don’t quite see it yet.”—Alex Carchidi
Mr. Carchidi is a writer, consultant, and entrepreneur, with a focus on financial and investment topics. He is also a contributor to The Motley Fool, where he provides analysis and insights on various stocks and investment opportunities. His comments here are taken from an interview he did with Rena Sherbill for “The Cannabis Investing Podcast”, the text of which appeared on the website Seeking Alpha.
To learn more, simply click on the following link.
https://seekingalpha.com/article/4693960-looking-for-the-bud-light-of-cannabis
Senior Cannabis Digest is a weekly review of cannabis news for mature consumers. It’s compiled and edited by Joe Kohut and John Kohut. You can reach them at joe.kohut@gmail.com and at 347-528-8753.
