The Talking Hedge

Cannabis was domesticated in what's now NW China around 12,000 years ago, according to an analysis of the genomes of 110 plants from around the world.

China is very sensitive to anything associated with drugs due to its history, keeping marijuana illegal with conviction for drug trafficking punishable by death.

China even banned the use of cannabidiol (CBD) in all cosmetics last March. The exportation of CBD products, however, is not strictly controlled in China and mainly depends on the rules of the destination country.

CBD cosmetics retailers and manufacturers will now have to remove their products from e-commerce platforms and all retail channels across the country.  

However, the ban in China will only cause a small dent in the massive Chinese cosmetics industry, whose sales hit 340 billion yuan (US$53 billion) last year and is on track to be the biggest in the world.

Episode 888 The #TalkingHedge looks at High Times article...

https://youtu.be/yVqF2Gl9QUo

2022 has not been kind to the stock market in general and the cannabis stock market in particular. U.S. cannabis stocks suffered a  20% rout in January, tumbling more than the broader market as hopes for federal marijuana legalization in the near future continued to fade.

Cannabis specific issues in play:

*Retail revenue growth has slowed in several key US markets and turned negative in Canada.

*Cannabis stocks are fighting against a rising rate induced sector rotation out of “growth” into “value.”

*Observers have largely capitulated on hopes for federal legalization.

*California continues to look disastrous for a large swath of competitors in 2022.

At least two large Canadian cannabis companies have been notified by the Nasdaq that their shares are too cheap and no longer meet the stock exchange’s listing standards.

During the pandemic, interest in special purpose acquisition companies (SPAC) soared, as private cannabis-related businesses looked to these blank-check companies for quicker, easier access to public markets and the funding that comes with it.

But two years later, the sparkle seems to be dimming.

Episode 887 The #TalkingHedge dives into Viridian Capital Advisors report...

https://youtu.be/t0z7FiMlLsA

#CannabisBanking #CannabisInvestment #WeedStocks #PotStocks #CannabisStocks #MarijuanaStocks 

The SAFE Banking Act, which only weeks ago seemed defeated when it was stripped out of a military spending bill, has been revived as an amendment to a domestic spending bill in the U.S. House of Representatives.

The U.S. House of Representatives formally attached a marijuana banking reform amendment to a large-scale bill dealing with innovation and manufacturing, marking the most recent development in the push to protect financial institutions that work with state-legal cannabis businesses.

There was no floor debate about the cannabis provision itself, demonstrating how relatively noncontroversial the bipartisan-supported reform is in the House. The Senate, as observers of the issue know, is a different story.

The SAFE Banking Act is the best opportunity to enact some type of federal cannabis reform this year and will serve as the first of many steps to help ensure cannabis businesses are treated the same as any other legal, legitimate business.

Though legislative hurdles have arisen in the past, it appears as though there may be momentum for meaningful change. The hope is that bicameral negotiations do not remove the desired language from the currently proposed legislation, ultimately setting the stage for its enactment.  

Episode 886 The #TalkingHedge dives into mjbizdaily & benzinga’s articles...

https://youtu.be/tpG3jFDmGzQ

Sales of cannabis-infused beverage market is projected to grow from $915.06 million in 2021 to $19,063.58 million in 2028 at a CAGR of 54%, as companies sought to capitalize on new cannabis consumers seeking a familiar form of consumption and those looking for an alternative to alcoholic drinks.

Cannabis beverage companies, for example, have been cashing in on health-related trends such as Dry January, when alcohol drinkers abstain for the month and look for alternative ways to relax.

The strong demand for infused beverages has not propped up prices – at least not yet. Despite the strong growth, the infused-beverage market remains a small portion of the overall cannabis product mix.

While it might be a ways off before customers can walk into a bar and order an infused drink, several licensed cannabis markets have begun the process of licensing public-consumption lounges, which many businesses see as a good fit for beverages.

Episode 885 The #TalkingHedge dives into brightfieldgroup’s article…

https://youtu.be/0L6f6P93kps

#CannabisIndustry #CannabisData #MarijuanaData #CannabisAnalytics #MarijuanaAnalytics #CannabisSalesData #MarijuanaSalesData

Cannabis stock prices and valuation multiples have been trending downwards since peaking in mid-February 2021 with multiples fluctuating around 15x.

They spiked upward in February 2021 on renewed hopes of federal legalization and have drifted lower ever since, despite improving profitability and cash generation, proven access to both debt and equity capital markets, strong cash positions, scaled operations, and the near-certainty of legalization, albeit with an uncertain timetable.

The market is likely to get an upward boost from news that the Safe Act will be attached to the America COMPETES (Creating Opportunities to Meaningfully Promote Excellence in Technology) Act of 2022, a domestic spending bill. We doubt that the bill will get any further now than before, but it is likely to give the market a temporary boost.

Viridian Capital Advisors projects Federal legalization in 2025 followed by a spike upward in growth. With legalization, they project two years of increased growth followed by slowing growth for the following years as cannabis normalizes into a regular consumer staple.  

The macro headwinds are considerable, but multiples are in excellent value territory. Legalization or banking reform is likely to bring new investors into the cannabis market with positive effects.

Episode 884 The #TalkingHedge looks at Viridian Capital Advisors’ report…

https://youtu.be/HTc_ONWz9Xk

#CannabisIndustry #CannabisData #MarijuanaData #CannabisAnalytics #MarijuanaAnalytics #CannabisSalesData #MarijuanaSalesData

We don’t often examine so many cannabis categories in a single report, but some interesting trends emerge when Capsule, Tincture & Sublingual, and Oil categories are compared in the US and Canada.  

When we look at the combined market share for the US and Canada, we can see that the Capsules, Tinctures & Sublinguals, and Oil categories (CTSO), are stabilizing at just below the 1% mark.

When we compare package sizes of these categories between the US and Canada, we notice that the trends are quite different between the two countries. For example, when we look at Capsules, the 0mg-5mg package size is the most popular in Canada with 35.4% unit volume. In the US on the other hand, the most popular package size of Capsules is 1000mg of THC with 32.7% of total unit volume.

Given the potential for maturation and innovation within established and emerging cannabis markets, there is plenty of opportunity for these categories to continue to grow and develop.  

Whether that includes new products or advanced formulations, or brands that speak to the ever-changing cannabis consumer, we’re excited to see what is to come for these cannabis categories.

Episode 883 The #TalkingHedge dives into headset’s data…

https://youtu.be/HxujCk7mTGg

#CannabisIndustry #CannabisData #MarijuanaData #CannabisAnalytics #MarijuanaAnalytics #CannabisSalesData #MarijuanaSalesData

Now that the new year is here, cannabis industry executives can expect to face a crosscurrent of trends in 2022.

Some will be positive for the industry; others, negative. Some will be new; others, a continuation from 2021.

Summary:

   Additional states will legalize marijuana in some form.

   Calls will grow for greater participation among minorities in the cannabis industry.

   Smaller M&A deals will likely continue at a rapid pace.

Episode 882 The #TalkingHedge…

https://youtu.be/bRRMO5O6gwA

There are many facets that influence sales trends within the cannabis industry. However, no question may be as alluring as: who is buying all this cannabis?  

In this report, we’ll explore the proportional sales contributions of customer demographic groups over time and compare these trends across the US and Canada.  

For example, sales to both Male and Female consumers have grown in the US, with sales to Females increasing slightly more at 55% from Q1 2020 to Q4 2021, and sales to Males increasing 49% in the same time period.  

By analyzing basket and category wallet share trends, we’ll gain a better understanding of how different customers shop and what types of products they tend to purchase.  

For example, younger age groups have an increased likelihood of purchasing Vapor Pens, while the opposite is true of Edibles.

Episode 881 The #TalkingHedge dives into Headset’s data…

https://youtu.be/ygW7qPGtnrU

#CannabisIndustry #CannabisData #MarijuanaData #CannabisAnalytics #MarijuanaAnalytics #CannabisSalesData #MarijuanaSalesData

Cannabis growers and manufacturers all across the country are looking for ways to increase efficiency, lower their cost of production and get their product in front of consumers faster.

The Great Resignation may have increased the rate of automation as labor shortage have been wreaking havoc on a wide variety of industries, creating the desire to reduce the amount of manual labor within any operation has never been more critical.

Cannabis production lends itself well to add automation systems at nearly every step, from cloning to cultivation, harvesting, processing and packaging.

Episode 880 The #TalkingHedge looks at Marijuana Venture's list of five companies manufacturing equipment to help cannabis brands streamline their operations....

https://youtu.be/CxEljU-nofA

Retail prices for Canadian recreational cannabis products fell across the board in 2021, as retailers and producers sold them for less to entice price-sensitive consumers and capture market share.

Prices declined for every Canadian cannabis product category during the third full year of Canada’s evolving adult-use marijuana market.

Canadian cannabis industry insiders say some level of continued price compression might remain on the horizon in 2022.

However, improving efficiency and lower costs in both cannabis retail and production might help Canadian cannabis companies stay afloat in a low-price environment.

Episode 879 The #TalkingHedge dives into benzinga & mjbizdaily articles...

https://youtu.be/foWgmo5HdDY