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The Fed's New Marijuana Bill


Ohio Republican Rep. Dave Joyce and New York Democrat Alexandria Ocasio-Cortez introduced new legislation on Thursday that would help states expunge criminal records for people with convictions for non-violent cannabis offenses.

Janet Yellen Says ‘Of Course’ Cannabis Companies Banking Their Billions Would Help The IRS. No one doubts that the IRS would also love to have the cannabis industry’s billion-dollar revenue streaming into its coffers. U.S. banks would likely be delighted to get in on the action as well.

U.S. Senate Majority Leader Chuck Schumer said his federal marijuana legalization bill is modeled in part after New York’s and intended to provide opportunities to small businesses and minorities, not the “big boys.”

Yet the largest cannabis companies are relatively small. The scale difference between the Alcohol, Food, and Tobacco companies and the MSOs are enormous. Annheuser-Bush InBev (NYSE: BUD), Mondelez Intl. (Nasdaq: MDLZ), and Altria (NYSE: MO) each have more than ten times the market cap of the largest U.S. MSO Curaleaf (CSE: CURA). BUD has nearly enough cash to write a check for Curaleaf and could probably finance the $25B purchase of the top five competitors.

Schumer’s goal of keeping big companies from dominating the cannabis business represents either naivety or political posturing. The industry is capital intensive and will only become more so as it grows to a national scale. The industry will inevitably be swept up in a wave of consolidation post-legalization: the economics are too powerful to deny.

The consolidated future of the industry raises an interesting question about cannabis brands. How much of post-legalization cannabis consumption will be branded products and how much will be blended ingredients in existing CPG brands?

Show Notes:
AOC, GOP Congressman’s New Marijuana Bill Seeks State-Level Cannabis Expungements
Janet Yellen Says ‘Of Course’ Cannabis Companies Banking Their Billions Would Help The IRS
Who Are the “Big Boys” Schumer is Worried About?

Josh Kincaid, Capital Markets Analyst & host of your cannabis business podcast.

Episode 842 The Talking Hedge:
Your Cannabis Business Podcast.
​Covering cannabis products, reviews, business news, interviews, investments, events, and more.

Music Info:
Song: Dark Trap Beats Hard Rap Instrumental | Gang | 2018Artist: LuxrayBeats

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Josh is not an investment adviser. The Talking Hedge is long gold and silver. Listeners should always speak to their personal financial advisers. This is only entertainment.


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