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Let's all just soak in that image for a second
before moving on.
Okay, ready.
Yesterday, Jazz Pharmaceuticals announced a $7.2
billion acquisition of GW Pharmaceuticals, a company whose product
Epidiolex (a treatment for children with severe epilepsy) was the first
cannabinoid to secure FDA approval. Cannabinoid = drug derived from
cannabis.
The tie-up is especially notable because
pharmaceutical-grade cannabis products tend to have an easier time with
regulators than recreational products like the cannabis-laced stroopwafels
and cotton candy you can get in states where pot is legal.
It’s one sign of
broader momentum in cannabis
Cannabis stocks have been on a roll since
President Biden’s election, and bulls have high hopes that his
administration will soften the US’ harsh cannabis laws. Pot stocks surged
even further this week after three Democratic senators, including Majority
Leader Chuck Schumer, pledged to prioritize marijuana reform in the current
Congress.
- The
ETFMG Alternative Harvest exchange-traded fund, which tracks cannabis
companies, gained almost 10% yesterday alone.
Biden himself has opposed complete legalization,
and that’s key because, without federal legalization, pot businesses will
stay barred from accessing the federally insured banking system.
The Beltway scoop: Schumer has favored
legalization in the past, but the cause could gain momentum now that his
party holds a majority in the Senate. Owen Bennett, an analyst at financial
services firm Jefferies, wrote in a note to clients that he expects
legislation in the not-too-distant future that allows pot businesses to 1)
use federally insured banks 2) list on US exchanges and 3) access capital
markets.
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