2024-05-09 09:24:55 ET
Summary
- The Department of Justice has recommended that cannabis be rescheduled to a Schedule III drug. Rescheduling will nearly double Verano's FCF given the removal of the 280E tax burden.
- Verano is a leading U.S. cannabis multi-state operator (MSO) and a preferred investment option to benefit from the rescheduling of cannabis given their best-in-class margin profile and undemanding valuation.
- The lack of institutional capital in the cannabis sector and the dominance of retail investors presents a unique opportunity for investors to capitalize on the misunderstood news.
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Thesis Overview
On 4/30/24 the Department of Justice (“DOJ”) confirmed after a leak from the Associated Press (“AP”) that they have recommended cannabis be rescheduled from a Schedule 1 to a Schedule III drug. This is arguably the single largest potential catalyst the U.S. cannabis industry has ever seen and will have a profound impact on the entire sector if/once implemented which I believe happens in a few months....
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Verano Holdings: Near-Term Potential Regulatory Change Would Unlock Significant Value