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Investor Ideas Potcasts #640, Cannabis News and Stocks on the Move - Cannabis legislation in the US, cannabis retail sales in Canada and the US

 

Delta, Kelowna, BC - December 9, 2022 (Investorideas.com Newswire) www.Investorideas.com, a global news source covering leading sectors including marijuana and hemp stocks and its potcast site release today's podcast edition of cannabis news and stocks to watch plus insight from thought leaders and experts.

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https://www.investorideas.com/Audio/Podcasts/2022/120922-StocksToWatch.mp3

Investor Ideas Potcasts #640, Cannabis News and Stocks on the Move - Cannabis legislation in the US, cannabis retail sales in Canada and the US

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Today's podcast overview/transcript:

In today's podcast we look at some of the recent news regarding cannabis legislation in the US, cannabis retail sales in Canada and the US and how these developments have impacted the markets.

This week's major cannabis news saw shares of many cannabis multi-state operators (MSOs) tumbling down on reports that legislation that would legalise banking services for marijuana companies in the US is now unlikely to pass the Senate by the end of the year.

Attempts to include a version of the Secure and Fair Enforcement (SAFE) Banking Act, which would prevent federal banking regulators from imposing penalties on banks and other financial institutions for providing services to legal cannabis businesses, in the must-pass annual National Defense Authorization Act (NDAA) were opposed by Republican leaders.

Democrats had pushed for the inclusion of cannabis banking language in the NDAA, however, the NDAA was released on Tuesday without any references to cannabis, crushing any hope that legislation for legalising marijuana banking would pass by year-end.

A version of the NDAA with the language of the SAFE Banking Act included was approved by the House earlier this year. This is a story that has played out in the House and Senate several times over the past few years as many investors and cannabis operators are well aware of.

The SAFE Banking Act as a standalone piece of legislation has attracted broad bipartisan support to date and it is understood Republicans opposed the use of the NDAA as a vehicle for this reform.

The market reacted negatively to the news, with the AdvisorShares Pure US Cannabis ETF down 8% and the AdvisorShares Pure Cannabis ETF falling 4.5% at mid-morning on Wednesday.

This was a change from the stock rally we saw early Monday following last week's news of President Joe Biden making history on Friday when he became the first American president to sign marijuana-specific reform legislation into law.

Biden affixed his signature to the bipartisan Medical Marijuana and Cannabidiol Research Expansion Act, the White House announced.

The landmark legislation, which is intended to make it easier for scientific researchers to study the plant, also calls on the federal government to look into the potential therapeutic benefits of marijuana and could thus help steer the ongoing rescheduling review Biden launched in October.

Co-sponsors of the bill include Sens. Chuck Grassley, R-Iowa, and Dianne Feinstein, D-California, as well as key members of the House who support marijuana reform, including U.S. Rep. Earl Blumenauer, D-Oregon, Nancy Mace, R-South Carolina, and Dave Joyce, R-Ohio.

The first marijuana reform bill to be passed by both chambers of Congress after it cleared the Senate last month via a process called unanimous consent, the bill allows research universities - including those that receive federal funding, which, to date, have been wary of dealing with the federally illegal drug - as well as private companies to acquire U.S. Drug Enforcement Administration licences to grow and handle cannabis for research purposes.

There are currently only seven institutions with DEA permits to grow cannabis for research.

The bill also directly instructs the federal Department of Health and Human Services (DHHS) to research "the therapeutic potential of marijuana," though it also requires the agency to study how cannabis might impair the development of adolescent brains as well as the ability to operate a motor vehicle.

Something to consider is as more federal organisations and Universities are able to access cannabis for research purposes, we could see the research quality deteriorate as one recent Harvard Study shows.

This recent study implies that cannabis is as effective as the placebo effect, though upon further reading we can see that the study actually drew no real conclusions in the end.

The active treatments used in these studies included two main cannabinoids in marijuana, delta-9-tetrahydrocannabinol (THC) or cannabidiol (CBD), and the prescription drugs nabilone (Cesamet), dronabinol (Marinol, Syndros), and nabiximols (Sativex). The products - and the placebos - were given as a pill, spray, oil, or smoke or vapour. The researchers found that participants receiving active treatment and participants receiving placebo reported similar levels of pain relief.

Ted J. Kaptchuk, director of the Program in Placebo Studies and The Therapeutic Encounter at Harvard-affiliated Beth Israel Deaconess Medical Center, says the findings from this well-done study aren't surprising. "With the exception of opioids, most pain-relieving medications are barely better than a placebo," he says.

In fact, in clinical trials of common pain medications such as aspirin and ibuprofen, placebos provide about as much pain relief as the actual drugs. That's not to say active medications don't have physiological effects. Rather, the effects of a placebo rival or mimic those effects. They just work through different neurobiological pathways, Kaptchuk explains.

While allowing Universities more access to cannabis research may seem a benefit to the cannabis industry on the face of it, we have seen over recent years the quality of many University studies deteriorate due to a variety of factors such as the involvement of political ideologies, corporate sponsorship and a general trend of conformity amongst University students and faculty.

Another factor of Biden's cannabis research bill is this specific wording which "requires the agency to study how cannabis might impair the development of adolescent brains as well as the ability to operate a motor vehicle."

This has been another element we have seen blown out of proportion often in mainstream media and from federal organisations in Canada and is often used as an excuse to limit the access of cannabis to strictly pharma based companies, supposedly the only companies deemed "safe" for handling such "potentially dangerous substances". This can also be used against recreational access even though certain research does point to cannabis use actually being the safe choice over alcohol, a federally legal substance across the globe, in that cannabis users often avoid driving while impaired, unlike alcohol users who feel emboldened to drive, and that cannabis users often choose safe ride alternatives far more often than alcohol users.

There is also the discussion of safety for children, even though this bypasses the discussion of cannabis as an effective medicine for many children suffering from autism and epilepsy or the recent research connected to antidepressants, a drug often prescribed to youths, which has been shown to have drastic negative side effects, unlike cannabis which as of yet has not been linked to any developmental issues amongst youths.

In recent Canadian news, Canadian cannabis producers and brands increasingly are, in effect, paying Ontario retailers for shelf space and other special treatment for their products, according to industry executives.

This is also the case in almost all other provinces in Canada.

Many executives allege the effective use of so-called slotting fees threatens the survival of hundreds of independently owned retailers and craft cultivators, who lack the money and resources to finance such pay-to-play schemes.

The monthly fee can amount to tens of thousands of dollars or more, according to one industry source who declined to be identified for competitive reasons.

Slotting fees, common for decades in traditional retail, are a relatively new phenomenon in cannabis in both the United States and Canada.

In Ontario, regulators prohibit producers and brands from paying retailers for favourable "material" treatment.

What no-one seems to be addressing is that this is largely due to the strict laws surrounding the cannabis industry when it comes to branding, advertising and marketing. Many within the industry are well aware of this reality and see this is their only competitive access point when dealing with the retail market.

Lastly, Connecticut's first legal cannabis shops will open next month.

The Department of Consumer Protection announced Friday morning that it has notified some of the existing medical marijuana dispensaries in the state that they can begin selling recreational pot to all adults 21 and over as soon as 10 a.m. on Jan. 10.

"We know that many people are excited to participate in this marketplace, whether as a business or a consumer, and we encourage adults who choose to purchase and consume these products to do so responsibly once sales begin on January 10," DCP Commissioner Michelle H. Seagull said in a written statement.

Customers will be able to buy up to a quarter ounce of cannabis at a time. DCP said purchase limits will continue to be reviewed over time and help maintain adequate supply for both adult-use consumers and medical marijuana patients, who can purchase up to five ounces of cannabis per month.

DCP is advising medical patients to purchase any necessary medication before Jan. 10, or at one of the nine medical-only dispensaries in the state, as long lines and traffic are expected during the opening weeks of adult-use sales.

Connecticut's recreational market is launching four years after Massachusetts became the first state on the East Coast to open legal pot stores. Recreational sales began in New Jersey in April and New York is on the precipice of launching its legal market. Rhode Island gave the green light to its existing medical marijuana dispensaries to sell recreational pot starting Dec. 1.

While this is a benefit for the state and will allow greater access for more consumers, note that yet again, the medical industry takes a backseat to recreational sales.

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