The third wave of the cannabis stock bubble is here, and this one will be the biggest. After two previous bull market runs that saw Canadian companies dominate in terms of market cap and trading volume, this time, it’s America’s turn.
It is essential to understand the unexpected convergence of circumstances that have emerged to catalyze this next leg up.
First and foremost, the victory of the Democratic slate in November last year shone a long-awaited ray of hope on the prospects for a federal cannabis regulation that is a prerequisite for interstate cannabis commerce.
The second significant development came with the upset in Georgia of the formerly Republican-controlled Senate, handing all three branches of government to a democratic administration.
To say this is the perfect storm is no understatement. The stars are now aligned, and the first peeps out of the Biden administration suggest there will be action on his commitment to decriminalize cannabis at the federal level and support initiatives to see cannabis become a pharmacological rising star.
Companies are already on a tear, and few notable ones are still flying under the radar or have yet to become public.
One that I bought into while it was the largest cannabis SPAC in history merged with Jay-Z’s The Parent Company and is now gearing up for a NASDAQ listing, which will likely occur this year.
Jay-Z’s involvement is likely the signal that celebrities will be looking to align their brands with cannabis more aggressively with the Biden administration’s rollout of a federal strategy.
The company is the umbrella for Caliva, a California retailer with over 1 million customers and 200 dispensaries across the state, according to Michael Auerback, who put the SPAC together specifically for the cannabis business.