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The past week saw two key developments impacting multi-state operators that has served to buoy a sector that has been struggling.
The first was Cresco Labs’ (OTCQX:CRLBF) March 23 announcement that it would acquire rival Columbia Care (OTCQX:CCHWF) for $2B, while the second was the March 24 news that a piece of legislation that would legalize marijuana is set for a House vote the week of March 28.
The Marijuana Opportunity, Reinvestment and Expungement (“MORE”) Act, sponsored by House Judiciary Committee Chairman Jerrold Nadler (D-N.Y.) would remove cannabis as Schedule I controlled substances and promote social equity in the industry. The same legislation passed the House in December 2020 but later stalled in the Senate.
Given Democrats have solid control of the House and there is also some Republican support, it is likely the MORE Act will pass again. What is more uncertain is whether the bill will have the same fate in the Senate as it did last year
As it stands now, that answer is a yes, and there are several reasons why.
Although there are 50 Republicans and 48 Democrats, the chamber’s two Independents caucus with the Democrats. Not every Senate Democrat is on board with the bill to begin with, and would require significant Republican support get the 60 votes necessary to end debate and get to a vote.
“So the idea that the MORE Act passing in the House is going to dramatically change the outlook for this concept in the Senate, I would not say that is true,” Politico reporter Natalie Fertig told Yahoo Finance, noting that she and a colleague spoke with senators on both sides of the aisle who are on the fence.
In addition, Senate Majority Leader Chuck Schumer (D-N.Y.) is drafting his own marijuana legalization bill, known as the Cannabis Administration and Opportunity Act, that he has said he plans to introduce in April.
A Congressional Budget Office report on the MORE Act after it passed the House in December 2020 found that it would lead to a net increase in revenues of ~$13.7B from 2021-2020 through business income, compliance, and occupational taxes.
Other top multi-state operators: Trulieve Cannabis (OTCQX:TCNNF); Green Thumb Industries (OTCQX:GTBIF); Curaleaf Holdings (OTCPK:CURLF); MedMen Enterprises (OTCQB:MMNFF); Acreage Holdings (OTCQX:ACRHF); Ayr Wellness (OTCQX:AYRWF); Verano Holdings (OTCQX:VRNOF); and Jushi Holdings (OTCQX:JUSHF).
Read why Seeking Alpha contributor Ted Waller says Trulieve Cannabis (OTCQX:TCNNF) is a strong buy.
