We don’t normally post company news releases as stand alone pieces, but CannaRoyalty (CRZ.C) CEO Marc Lustig has put one out that summarizes our thoughts on the news today that the US Justice Department is going to kill off an Obama administration guidance memo that told the department to lay off weed companies in states where weed is legal.
The market sold off pretty hard today on the news, which is dumb because this news has been put out before, with no actual change in the way things work. In fact, you may recall a similar sell off when the TSX wondered aloud about delisting companies with US weed investments, followed by months of sustained rises – and a similar US Justice Department saddle shift before that in which said Attorney General Jeff Sessions would be coming after weed purty durned quick. That, too, was followed by sustained buying in the weeks following.
So Lustig heard today’s news and decided to explain it all, and make his arguments as to why the de-memoing announcement is a bullshit move. We applaud when CEOs get ornery and push back on dumb bureaucracy, and Lustig has done so once or twice before.
OTTAWA, Jan. 4, 2018 /PRNewswire/ – CannaRoyalty Corp. (CSE: CRZ) (OTCQX: CNNRF) (“CannaRoyalty” or the “Company”), an active investor and operator in the legal cannabis industry, commented on the Memorandum for all United States Attorneys issued by U.S. Attorney General Mr. Jefferson B. Sessions on January 4, 2018 (the “Memorandum”).
The Memorandum, as its predecessors, the so-called Cole Memorandums of 2011, 2013 and 2014, provides guidance to U.S. prosecutors regarding the enforcement of federal cannabis laws. The Memorandum is not law nor does it alter the U.S. Justice Department’s (“DOJ”) discretion or ability to enforce federal marijuana laws. U.S. prosecutors will continue to have discretion in how they enforce federal marijuana laws, as they had under the Cole Memorandums.
“No legal change has taken place here. We do not foresee the Memorandum meaningfully impacting the way that existing cannabis business is conducted within legal states,” said Marc Lustig, CEO of CannaRoyalty. “The evidence from legal states demonstrates that legalizing and regulating cannabis consumption works. It is our belief that this Memorandum has more to do with the DOJ’s desire to ensure its ability to continue to enforce federal law without specific enforcement priorities regarding cannabis, than it does to disrupting ongoing state-legal cannabis activity.” [emphasis ours]
Marc Lustig added, “To enforce federal cannabis restrictions within legal states, the DOJ would be enforcing a historical federal policy that is contrary to the desire of roughly two-thirds of the U.S. population, including the majority of Republicans. This would also be directly contrary to President Trump’s campaign assertion that marijuana policy should be left in the hands of the states and contrary to the trend toward legalization within U.S. states; the Vermont House of Representatives voted earlier today to legalize possession and home cultivation of marijuana. Legal states have built significant infrastructure to prudently handle the legal cannabis industry, they are relying on tax revenues from the industry and their citizens are relying on the private sector jobs that legalization has created. CannaRoyalty operates exclusively within state-legal U.S. jurisdictions, Puerto Rico as well as in Canada, and adheres strictly to applicable laws. While the release of the Memorandum may mean some volatility for U.S. players over the short-term, we see significant opportunity for growth over the coming year and will continue to work to drive value for our shareholders.”
CannaRoyalty is an active investor and operator in the legal cannabis industry. Our focus is building and supporting a diversified portfolio of growth-ready assets in high-value segments of the cannabis sector, including research, consumer brands, devices and intellectual property. Our management team combines a hands-on understanding of the cannabis industry with seasoned financial know-how, assembling a platform of holdings via royalty agreements, equity interests, secured convertible debt, licensing agreements and its own branded portfolio. CannaRoyalty’s shares trade on the Canadian Stock Exchange (CSE) under the symbol CRZ and internationally on the OTCQX under the symbol CNNRF.
Our take: Yep.
If you sold Californian weed stocks today, you’ll be buying them back tomorrow for more money.
If you sold Canadian weed stocks today, I don’t know how to help you make it through life without walking into traffic.
If you lost money on the US news, it’s because you bought your first weed stock yesterday.
If you held steady, or bought in on the dips, like I did, see you on the other side.
— Chris Parry
FULL DISCLOSURE: CannaRoyalty is not an Equity.Guru marketing client, though I have owned the stock previously.