Cannabis Stocks just starting to run “This is just an initial rally on the news,” Magoon said. “We think that there could be a lot more upside in the future for this very disruptive industry that’s based on a plant.”
He explained that a potential reclassification of marijuana as a Schedule III substance would allow cannabis companies to write off business expenses, inevitably increasing cash flow and profitability.
“It also means that it’s more likely that the SAFE Banking Act could be passed in Congress,” he continued, “which would give cannabis companies the ability to bank and participate in capital-formation activities that are more like traditional companies.”
Magoon explained that a federal reclassification would be transformative in the consumer packaged goods (CPG) space, advancing marijuana’s multibillion-dollar U.S. industry to broader investment and partnership opportunities.
“Cannabis can disrupt health, wellness, the traditional alcohol industry, even pharmaceuticals, he said. “Consumer packaged goods and pharmaceutical companies are going to be able to now look at these cannabis companies as M&A targets to partner with them.”
Beyond the benefits for cannabis companies, VettaFi Vice Chairman Tom Lydon believes that federal deregulation will be advantageous for the exchange-traded fund industry as a whole.
https://www.cnbc.com/2023/09/09/cannabis-etfs-are-off-to-a-strong-september-will-the-buzz-last-.html