FEDERAL HEMP LEGALIZATION IS FEDERAL CANNABIS LEGALIZATION
Why I'm so excited about the Senate's Federal Hemp Legalization vote this week
I've been studying the cannabis sector for a long time now, so I'm not sure how much everybody knows about cannabis stocks, particularly regarding how they have a history of being greatly influenced by catalysts, moreso than any other stock sector I have ever studied -- which makes sense once one thinks about the uncertainty and murkiness of the future of legal marijuana in this country
This puts the public cannabis sector in an extremely unique situation, as an industry with both huge economic promise and simultaneously a very nebulous future -- the investor psyche can swing from one end of the spectrum to the other over periods of time, often as a direct result of some catalyst -- investors can go from thinking that cannabis will probably be fully legalized soon during one period of time (before the 2016 elections when California, Massachusetts and Nevada were favored to vote for recreational MJ legalization and Clinton was favored to win the Presidential election and change federal policy on MJ), to worrying that the cannabis industry could be completely shut down at any moment (like what occurred after the Jeff Sessions rescission of the Cole Memo on 1/4/18)
So because of the high degree of uncertainty regarding the future of cannabis in America, catalysts tend to have a tremendously magnified effect on sentiment surrounding cannabis stocks, particularly when they most directly impact the immediate future of the cannabis industry in America
Here is what I have seen thus far in my studies:
Every significant step towards the federal legality of cannabis has served as an enormous positive catalyst for the cannabis stocks
-- Colorado beginning recreational cannabis sales on 1/1/2014
-- The November 2016 elections, when 5 Major States -- including California, Massachusetts and Nevada -- were on the ballot for recreational MJ, and 4 additional states were on the ballot for medical MJ -- and in addition, the Presidential candidate favored to win had Rescheduling MJ to Schedule 2 in her platform
-- The biggest state in the union, California, launching recreational cannabis sales on 1/1/18 -- it was the perfect setup to be the next huge catalyst
And the insane amounts of money flowing into the entire cannabis sector during the last week of December and the first few days of January was proof that another Cannabis Mania was, in fact, underway
Now the opposite is true for negative catalysts, which tend to move America further away from being a country where cannabis is federally legal
Jeff Sessions ended the Cannabis Mania on 1/4/18 because he not only potentially moved the federal legality of cannabis back a few years, but he also declared that he wanted to reverse some of the progress that cannabis had made towards becoming federally legal -- the most severe interpretation of his actions, which some investors seriously considered to be a plausible outcome in the near future, was a total shutdown of the entire cannabis industry
Sentiment is the biggest driver of these cannabis stocks surrounding a catalyst
And Sessions not only ruined the positive sentiment as a result of his actions, but he also created a ton of negative sentiment, and the cannabis stocks reacted to that by retracing their recently made Cannabis Mania gains
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Everything that happens to cannabis stocks is pretty easy to understand once you start examining how catalysts affect investor sentiment
Without investor sentiment, we wouldn't even have a stock market
So to say that a huge increase in positive investor sentiment following hemp legalization will not have any effect on a hemp stock is pretty irrational
Understanding cannabis sector catalysts themselves, as well as their impact on the psyche of current and prospective investors, is absolutely MANDATORY in order to understand the building blocks and mechanistics of a cannabis mania, as well as to accurately predict the biggest winners resulting from a specific catalyst
To me, the federal legalization of hemp isn't just a step towards cannabis legalization, like all prior positive catalysts in the cannabis sector
Instead, when we are talking specifically about the Hemp Sector itself, the federal legalization of hemp is the federal legalization of cannabis
The federal legalization of hemp IS the federal legalization of cannabis -- for VATE & SIPC shareholders, that is
Sleek
