Several state marijuana legalization initiatives could make fall ballot

Voters will decide whether to legalize commercial sales of adult-use marijuana in as many as five states during the November midterm elections, while medical cannabis could get on the ballot in Nebraska.

See the full story from MJBiz Daily  here.

To see how Dynamic Alternative Finance can help you get into this exciting business contact us!

#legalization#cannabislegalization#cannabisbusines#cannabismoney#cannabisfunding

Cannabis Legislation Update

This week, Politico published an article that looks at cannabis legalization efforts across multiple states in the US. Thus far, 19 states have embraced full-scale cannabis legalization with enacted recreational cannabis laws while another 19 states have moved forward with medical cannabis platforms. With most state legislative sessions coming to a close this week, November’s ballot initiatives remain the key vehicle to push cannabis reform in potentially transitioning states. Below we highlight reform efforts undertaken in states through 2022:

  • In January, the state passed medical marijuana reform after seeing efforts fail during the 2020 referendum. The state is now amidst its application process for patients and businesses, with sales potentially starting later this year.
  • Rhode Island. This past May, Rhode Island became the 19th state (and only state in 2022) to pass adult-use referendums through its legislature. As structured, the bill allows for 33 dispensaries in six regions, with sales expected to kick-off on December 1st.
  • Maryland voters are set to vote on a ballot initiative calling for adult-use reform in the state later this year. The measure would require the legislature to pass a framework for the proposed recreational market, likely resulting in first sales in 2024, if enacted.
  • South Dakota. In 2020, South Dakota voters approved legislation to enact both medical and recreational markets through the state ballot measures. However, the state supreme court later struck down the referendum as unconstitutional, leaving South Dakota residents with only a formalized medical cannabis market. Following up on this, South Dakota residents have re-submitted an initiative to certify adult-use cannabis in the state, with a proposed program that allows up to 1 ounce of possession and the ability to grow up to three plants if no dispensaries reside in their county/city.
  • Licensed operators in the Arkansas medical cannabis program submitted a ballot initiative that will see state residents vote on adult-use reform as part of the November Ballot initiatives. The proposed legislation would allow Arkansas’s existing medical shops to add recreational sales at their stores on March 8, 2023, and the option to open another recreational-only location. Further, a lottery would be held to allocate another 40 additional retail licenses to serve adult-use customers.
  • After efforts to push adult-use legalization through the state legislature failed earlier this year, an effort has been made to put adult-use legalization on the November ballot. Signatures were submitted this past May, however, it remains unclear if the initiative will pass the state’s requirement to collect signatures from all six of the state’s congressional districts.
  • State voters will likely see adult-use legalization as a question on the state ballot later this year after advocates submitted twice the required number of signatures for consideration last month.
  • North Dakota. After adult-use legislation failed to pass the state senate in 2021, last month saw advocates submit ~25,700 signatures (~10,000 signatures above the required amount) to place the initiative on the November ballot.
  • Nebraska remains one of three states without any form of medical cannabis access in the US today. Earlier this year, advocates submitted ~90,000 signatures to have the initiative placed on the November ballot, however, disputes are currently ongoing regarding the state’s geographic requirements (which call for at least 5% of voters in at least 38 of the state’s 93 counties).

#legalization#cannabislegalization#cannabis#cannabisfinancing#cannabisfunding#cannabisloans#decriminalization

Cannabis Administrative and Opportunity Act

Senator Chuck Schumer’s legalization bill is here…Senate leaders are introducing sweeping legislation Thursday meant to lift federal prohibitions on marijuana more than 50 years after Congress made the drug illegal.

Read the full story here.

Exciting Developments in the Cannabis Industry…see some state highlights below!

Connecticut:  State marijuana regulators were inundated with more than 15,000 applications for retail recreational dispensaries before the May 4 deadline.

Florida:  Miami, the state’s second-largest city, with a population of 450,000, will finally allow its first medical cannabis dispensary.

Illinois:  A state judge lifted an August 2021 court order that stood in the way of 185 new business licenses being issued for recreational cannabis stores.

Louisiana:  State legislators passed a bill to expand the number of medical marijuana dispensaries from nine to 30.

Massachusetts:  Lawmakers in the Massachusetts House of Representatives joined their state Senate colleagues in approving legislation to promote greater diversity in the state’s licensed cannabis industry.

Michigan:  The city of Detroit issued its first recreational marijuana business license.

Missouri:  A campaign working to legalize adult-use marijuana in Missouri has submitted almost 400,000 voter signatures to the state in support of a November ballot measure.

New Jersey:  In the first month of recreational cannabis, New Jersey retailers sold $24 million worth of adult-use products in the 13 state-licensed dispensaries.

New York:  The state Cannabis Control Board signed off on 16 conditional adult-use marijuana cultivation licenses along with a slew of proposed industry rules.

Ohio:  The state’s pharmacy board approved 70 provisional licenses, which could more than double the 58 dispensaries previously licensed.

South Dakota:  A group advocating to legalize adult-use cannabis, South Dakotans for Better Marijuana Laws, turned in roughly 25,000 signatures to the office of the Secretary of State, which could be enough to get the issue on the November ballot.

Vermont:  Seven additional cannabis grow licenses were approved as the state increases suppliers for the recreational cannabis market that is expected to launch in October.

Contact Us today to discuss how we can support your business growth in this exciting industry

#cannabisbusiness#cannabisfunding#marijuanamoney#marijuanalending#marijuanafunding#cannabislending#cannabismoney

The top 3 things to consider when investing in cannabis ETFs

Cannabis stocks have been climbing since the November 2020 election in the United States, when more states approved legalizing recreational cannabis. That vote and the optimism that the federal government will finally relax restrictions on cannabis and make it lawful for recreational use nationwide have caused many investors to have high hopes for the future of the industry. Furthermore, many investors saw the cannabis industry’s recognition as an essential industry during the Covid-19 pandemic as a sign of good things to come for cannabis in Washington DC.

As a result of the excellent press that cannabis is getting, many investors are rushing to add cannabis stocks to their portfolios this year. One of the cannabis securities that investors are rushing to is cannabis ETFs.

There are numerous well-performing cannabis ETFs that would satisfy the demands of many investors looking for significant gains in this very volatile cannabis stock market. However, it is critical to exercise caution when entering the cannabis stock market because of the volatility. Therefore, we’ve put together some key points to assist you on your way through the cannabis ETF marketplace.

What are cannabis ETFs?

ETFs or exchange-traded funds are funds with a collection of different stocks to minimize the downside risk for investors in the ETF. They are typically designed to track a specific index, like the S&P 500. This means that the ETF will generally behave the same way as the index it is tracking. If the index goes up, so does the ETF, and vice versa.

Although ETFs have been in existence for decades, the first marijuana ETF wasn’t established until last year. Horizons ETFs debuted on the Toronto Stock Exchange in April of 2017, tracking the performance of the North America Medical Marijuana index. This opened up a new, less-dangerous method to invest in cannabis stocks, which we want to help you take advantage of. But before we get into it, there are a few things to think about.

What to consider when investing in cannabis ETFs?

1.       What index is the ETF tracking?

This is important to know before investing in an ETF. The index that the ETF is tracking will determine both the upside and downside potential of the ETF. Furthermore, you should know the tracking difference between the ETF and the index it is tracking.

The tracking difference is the gap in performance between an ETF and the index it tracks. The trading and rebalancing expenses are generally to blame for this disparity. You may use the tracking difference as a metric to determine whether an ETF is performing well or not and whether its fees are too expensive.

Additionally, you should also know how frequently the ETF is rebalanced. Rebalancing is when the fund manager buys or sells stocks to maintain the desired weighting of the index. For example, if a particular stock in the index goes up in value, the fund manager may sell some of that stock to keep the index’s weighting constant.

The frequency of rebalancing will have an impact on both your returns as well as your costs. If an ETF is rebalanced more frequently, it will likely experience higher transaction costs. This will hurt your return, all other things being equal. You can find this information in the ETF’s prospectus.

2.       Actively managed ETF vs. passively managed ETF

The difference between recouping your investment and making a significant loss may be determined by whether or not a fund is actively managed. Actively managed funds employ humans to make decisions and execute trades, whereas passive funds utilize AI and trading bots to generate profits.

Passive funds tend to be less effective at minimizing losses than active funds. That’s because passive funds have trading cycles during which the fund’s asset composition cannot be changed even if significant losses are risked.

However, passive funds tend to have higher gains than active funds in the long term. This is because humans are not as good at making investment decisions as AI. Also, humans tend to buy and sell assets at the wrong time, incurring transaction costs that eat into returns.

So if you’re looking for immediate gains, an actively managed fund may be a better choice. However, if you’re aiming to maximize your profits in the long term, passive funds are generally a better investment.

3.       Percentage of junk stocks

It is not uncommon for funds with baskets of stocks to include some high performers and a bunch of underperformers that are there more for their fundamentals, which help spread out the risk more than they help make any gains. However, that is not to say that the junk assets couldn’t hurt you.

Remember the sub-prime mortgage loans that caused the recession in 2008? Those bad loans were mixed in with a few good ones, so investors and insurers couldn’t tell the difference. You have to know the balance in the ETF between the performers and the junk before investing in it.

Jason Spatafora, the co-founder of marijuanastocks.com, says, “Most of these ETFs will have a certain amount allocated to several companies where the top five marijuana stocks are good, but then there is a huge drop off in quality in the other stocks. Everything else is more risky.” This sums up the nature of most ETFs. They are a mix of good and bad investments hoping that the good will outweigh the bad.

ETFs can be a great way to invest in cannabis without picking individual stocks. However, there are a few things you should consider before investing in one. Specifically, you should look at the index that the ETF is tracking, the tracking difference, rebalancing frequency, the nature of the fund’s management and the percentage of junk stocks. By taking these things into account, you will be able to decide which cannabis ETF is suitable for you.

Please contact us for more information on how to identify the right cannabis ETF for your portfolio.