Welcome to my recurring video presentation that examines the latest developments of interest to investors in the cannabis and psychedelics industries. The article below is a condensed transcript of my presentation.
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Financial Services
A new study found that banking activity increases in states that legalize marijuana, emphasizing the potential benefits of legislation that would expedite the access of marijuana companies to financial services.
Researchers studied banking trends in states that have legalized marijuana, examining bank regulatory filings with the Federal Deposit Insurance Corporation (FDIC). They unearthed evidence that “banking activity (deposits and subsequent loans) increase considerably in legalizing states relative to non-legalizing states.”
The study, called THC and the FDIC: Implications of Cannabis Legalization for the Banking System, states: “While uncertainty can result in overly cautious behavior and hinder economic activity, we do not find evidence of this with cannabis laws and the banking industry.”
The bipartisan Secure and Fair Enforcement (SAFE) Banking Act, which prevents reprisals against banks for doing business with pot companies, has passed the House and awaits action in the Senate.
How Green Was My (Tennessee) Valley…
A federally owned, regional electrical utility walked back its previous threats to terminate services to areas where companies are cultivating or selling marijuana, regardless of respective state law.
The Tennessee Valley Authority (TVA) this month first asserted that it is bound by federal obligations while marijuana remains banned under the Controlled Substances Act. The statement came days after Mississippi enacted legislation to legalize medical marijuana in the state. TVA is a main supplier of electricity to Mississippi.
The TVA was created by Congress in 1933 as part of President Franklin D. Roosevelt’s New Deal. TVA’s service area covers all of Tennessee, and portions of Alabama, Mississippi, Kentucky, Georgia, North Carolina, and Virginia.
The TVA had originally argued that federal law dictates that its “resources and funds may not be purposely used to facilitate activity that potentially violates federal law. Given this important point, TVA will not direct any federal resources or funds to the cultivation and/or distribution of marijuana.”
But last week, after a salvo of condemnations from federal and state lawmakers, the TVA backtracked (for details and charts, see my video).
The TVA’s quick reversal, due to political pressure, shows the increasing popularity and financial importance of marijuana, even in socially conservative southern states. The fact that Mississippi recently legalized marijuana portends further inroads for the cannabis sector in the Old Confederacy.
Colorado
Colorado smashed yet another marijuana sales record in 2021, with state officials reporting over $2.22 billion in cannabis purchases last year.
The latest figures released last week by the Colorado Department of Revenue (DOR) also showed that the state took in more than $423 million in tax revenue from medical and recreational marijuana sales in 2021. The previous sales record was set in 2020, when Colorado racked up about $2.19 billion in marijuana purchases.
Since Colorado’s retail market started in 2014, marijuana sales have cumulatively surpassed $12 billion. As of January, cumulative tax revenue from those sales has surpassed $2 billion.
Missouri
Nearly one out of every 10 jobs that were created in Missouri in 2021 stemmed from the state’s medical marijuana industry, according to an analysis of state labor data recently released by a trade group.
The cannabis sector added nearly 7,000 new jobs in Missouri, representing 10% of the 77,600 jobs that the Missouri Department of Labor tracked for 2021 overall, the Missouri Medical Cannabis Trade Association reported.
Legal marijuana in America is a jobs generating machine in both the recreational and medical sectors, further proof that the industry and its publicly traded companies have staying power.
Since 2017, the U.S. marijuana industry has averaged annual job growth of 27.5% every year. No other industry even comes close to this rate of job creation.
Entertainment
People who attend the 2022 South By Southwest (SXSW) festival in Austin, Texas will get the opportunity to hear from a variety of celebrities, scientific experts, political advocates, investors, and corporate executives in the marijuana and psychedelics industries.
Several panels have been selected for the event, which runs from March 11-20. Here’s one example that caught my eye: Have A Nice Trip: The Rise of Psychedelic Tourism. A description of the panel explains:
“In this session, you’ll learn what actually happens at a psychedelic retreat—where and how they operate amidst a complex, evolving web of state and national regulations; the daily work of psychedelic retreat facilitators; and the trends converging to drive this burgeoning new category of luxury travel.”
Other panels include such titles as Cannabis vs. the Opioid Crisis? and Puff, Puff, Pass The Rewards: Equity In Cannabis Legalization.
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John Persinos is the editorial director of Investing Daily.
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