In last week’s graph of the week, we analyzed US MSO multiples and showed that they are far too low relative to other industries, particularly given their outsized growth potential.
Our call was answered Friday by freshman GOP congresswoman Mace with her draft legislation of the “State Reform Act.” At worst, the proposed bill is brilliant politics, grabbing hold of the debate and offering a compromise between the “all or nothing” Democratic proposals and the simple de-scheduling favored by many Republicans. The market reacted with enthusiasm, pushing the widely followed AdvisorShares Pure US Cannabis ETF up by 9.5% on the day.
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The obvious question is, where is the rally? Since May, the few upward blips have generally coincided with fresh legalization-related rumors only to fade away in the following weeks. We frankly expect similar results post this rally. The macro picture of slow progress towards federal legalization mixed with difficult third quarter comparisons is likely to make this a good profit-taking opportunity.
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The tier 1 MSOs, the darlings of the market, are the worst-performing group, down 25% YTD without a single basket company in positive territory.
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The tier 2 basket (down 14% YTD) shows that it is still a stock pickers market. MariMed (OTCQX:MRMD), the best performer, is up 80%, while the Parent Company (NEO: GRAM-U) is down 68%.
The Viridian Capital Chart of the Week highlights key investment, valuation…
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In last week’s graph of the week, we analyzed US MSO multiples and showed that they are far too low relative to other industries, particularly given their outsized growth potential.
Our call was answered Friday by freshman GOP congresswoman Mace with her draft legislation of the “State Reform Act.” At worst, the proposed bill is brilliant politics, grabbing hold of the debate and offering a compromise between the “all or nothing” Democratic proposals and the simple de-scheduling favored by many Republicans. The market reacted with enthusiasm, pushing the widely followed AdvisorShares Pure US Cannabis ETF up by 9.5% on the day.
-
The obvious question is, where is the rally? Since May, the few upward blips have generally coincided with fresh legalization-related rumors only to fade away in the following weeks. We frankly expect similar results post this rally. The macro picture of slow progress towards federal legalization mixed with difficult third quarter comparisons is likely to make this a good profit-taking opportunity.
-
The tier 1 MSOs, the darlings of the market, are the worst-performing group, down 25% YTD without a single basket company in positive territory.
-
The tier 2 basket (down 14% YTD) shows that it is still a stock pickers market. MariMed (OTCQX:MRMD), the best performer, is up 80%, while the Parent Company (NEO: GRAM-U) is down 68%.
The Viridian Capital Chart of the Week highlights key investment, valuation…
