Better Man with Fundstrat's Tom Lee & Brady Cobb of Sunburn Cannabis
Sep 1, 2023
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Cryptocurrency analyst Tom Lee and Sunburn Cannabis CEO Brady Cobb join the podcast. Tom Lee discusses the stock market, bond market, Bitcoin, and sentiment among Fundstrat clients. Brady Cobb talks about HHS easing restrictions on marijuana, the move to reschedule cannabis, and Sunburn's growth in the cannabis market.
The potential rescheduling of cannabis to Schedule 3 would have positive implications for the industry, including changes to banking regulations and removal of obstacles for other industries to enter the cannabis market.
Cannabis reform has gained bipartisan support in the past five years, with both Republicans and Democrats favoring recreational use and legislative measures.
The approval of a spot Bitcoin ETF could act as a catalyst for crypto growth, leading to increased adoption and investment in Bitcoin.
Deep dives
Cannabis Moving from Schedule 1 to Schedule 3
A letter from the Secretary of the Department of Health and Human Services states that cannabis should be moved from Schedule 1 to Schedule 3 based on its medicinal benefits. This is a significant development for the cannabis sector, as Schedule 3 classification would have positive implications for the industry, including potential changes to banking regulations and removal of obstacles for other industries to enter the cannabis market.
Bipartisan Support for Cannabis Reform
Over the past five years, cannabis reform has gained bipartisan support, with more Republicans favoring recreational use and legislative measures. Cannabis has become a bipartisan issue, with various bills and proposals receiving support from both sides of the aisle. Recent Gallup polls reveal that a majority of Americans, including Republicans, support the legalization of cannabis in some form.
Implications for the Cannabis Industry
The potential rescheduling of cannabis to Schedule 3 has significant implications for the industry. It could resolve regulatory challenges faced by cannabis companies, such as the 280E tax provision, and pave the way for banking services and investments from other industries. The shift toward Schedule 3 signals a step closer to harmonizing state and federal laws, creating opportunities for growth and expansion within the cannabis sector.
Potential catalyst for crypto growth: Spot Bitcoin ETF approval
The podcast episode discusses the potential impact of a spot Bitcoin ETF approval on the crypto market. The speaker predicts that when a spot Bitcoin ETF is approved, it will act as a catalyst for crypto growth. Such an ETF would provide an avenue for more people to allocate new money to Bitcoin, especially in the United States. The speaker believes that this approval could lead to increased adoption and investment in Bitcoin, potentially driving its price to over $100,000. However, they also acknowledge that regulatory uncertainties in the US may still pose challenges.
Potential market impact of cannabis legalization
The episode explores the potential market impact of cannabis legalization in the United States. The speaker highlights two key factors that could significantly affect the cannabis industry. First, the rescheduling or removal of cannabis from Schedule I could lead to major changes, including better access to financial systems and US capital markets. This change could attract investment from traditional industries like alcohol and tobacco, opening up new opportunities for growth. Second, the speaker emphasizes the importance of addressing the high effective tax rate on cannabis companies caused by IRS rules. By reducing this tax burden, cannabis companies could experience improved profitability and cash flow, which would also attract more investment. Overall, the speaker sees cannabis legalization as a major catalyst for industry growth and collaboration with established players in related industries.
Fundstrat’s Tom Lee joins Dan Nathan, Guy Adami and Danny Moses for the first half of the pod to discuss the stock market not making sense actually makes sense (4:00), the bond market (16:00), why it’s too early to have a 2024 outlook (18:00), Bitcoin (25:00) and sentiment among Fundstrat clients (27:00). After the break, the guys speak with Brady Cobb, CEO/Founder of Sunburn Cannabis, to discuss HHS calling for an easing of restrictions on marijuana (44:30).
Use this link to get one month of free access to Tom Lee’s research at FS Insight: https://bit.ly/3PjnBdV
About the Show:
On The Tape is a weekly podcast with CNBC Fast Money’s Guy Adami, Dan Nathan and Danny Moses. They’re offering takes on the biggest market-moving headlines of the week, trade ideas, in-depth analysis, tips and advice. Each episode, they are joined by prominent Wall Street participants to help viewers make smarter investment decisions. Bear market, bull market, recession, inflation or deflation… we’re here to help guide your portfolio into the green. Risk Reversal brings you years of experience from former Wall Street insiders trading stocks to experts in the commodity market.
