MSOs And Cannabis Rescheduling: A Safer Bet? Analyst Looks Closer At Pros And Cons

Will the rescheduling of cannabis fuel a boom in cannabis stocks? Analysts from Z&A delve into the pros and cons of MSOs and cannabis rescheduling in their latest equity research report.

Re-scheduling Vs. De-scheduling: What Is The Difference?

Re-scheduling cannabis refers to the process of changing its current classification within the legal framework while maintaining some level of regulation. De-scheduling cannabis, on the other hand, involves removing it entirely from the list of controlled substances, eliminating all federal restrictions.

If a country classifies cannabis as a Schedule I drug, re-scheduling it to Schedule II would mean acknowledging some medicinal value while retaining restrictions.

De-scheduling would altogether remove all legal barriers, allowing it to be treated like any other non-controlled substance. Often, rescheduling is cited as a powerful catalyst for MSO stocks and for all US plant-touching businesses.

Is Cannabis Rescheduling The Right Move For MSOs?

Zuanic & Associates (Z&A) note that the narrative regarding the potential for rescheduling and its resulting benefits, does not tell a full picture, and rescheduling of medical marijuana may not be beneficial for MSOs.

According to Z&A, de-scheduling “is unlikely,” while “re-scheduling of medical cannabis (MMJ) is not without risks.”

“Rec cannabis cannot be rescheduled (or do we want Drs also to have to prescribe rec cannabis, as would be the case if in Schedule III)?” asks the report.

What if Biden's White House is on the point of rescheduling cannabis?

In that case, the report suggests: “lobbying DC for a SAFE Banking Act with safe harbor language for US exchanges matters too (or even just for the basic version of SAFE), but the industry should start thinking about the consequences of MMJ rescheduling (not just the 280E bit).”

What are the alternatives?

According to the report MSOs, should “lobby for the removal of 280E outright, without re-scheduling, and leave cannabis in Schedule I.” 

Meet Pablo Zuanic, from Zuanic & Associates, at the upcoming Benzinga Cannabis Capital Conference, returning to Chicago this Sept 27-28 for its 17th edition. Get your tickets today before prices increase and secure a spot at the epicenter of cannabis investment and branding.

Interested in more information on cannabis investments? Click the tickers below for instant updates. 

• Cambria Cannabis ETF TOKE.
• Amplify Seymour Cannabis ETF CNBS
• AdvisorShares Pure Cannabis ETF YOLO.
• ETFMG Alternative Harvest MJ.
• AXS Cannabis ETF THCX.
• Global X Cannabis ETF POTX.

Photo by mostafa meraji on Unsplash.