- MSRT shares lost 30% in recent weeks due to uncertainty in how the new administration in Washington will deal with the rapidly growing legalized cannabis industry in the U.S.
- However, Attorney General Jeff Sessions took a much more pragmatic stance on the cannabis industry in the U.S. just yesterday
- Expect shares of MSRT to rally in the coming days/weeks on yesterday’s clarification that erases much of the uncertainty that the market hates
- MSRT shares are bouncing off the 200 day moving average of .78 and look prime for a breakout
- MSRT is experiencing high sales growth and expects to be cash-flow positive in near term
Cole Memorandum and Legal Cannabis in the U.S.
Essentially, the Cole Memorandum states that jurisdictions that have legalized marijuana in some form are less likely to be a threat to the federal priorities under the CSA if they have implemented strong and effective regulatory and enforcement systems to control marijuana growth and distribution. The Cole Memo also gives wide prosecutorial discretion whether to prosecute state legal marijuana enterprises and hinted that it is probably not efficient use of federal resources to focus enforcement on state legal businesses.
In an appearance yesterday before local, state and federal law enforcement officials in Richmond, Virginia, Attorney General Jeff Sessions stated that:
“The Cole Memorandum set up some policies under President Obama’s Department of Justice about how cases should be selected in those states and what would be appropriate for federal prosecution, much of which I think is valid.”
Sessions also indicated that the Justice Department doesn’t have the resources to enforce federal prohibition in states across the country.
This is a major shift from the Attorney General’s previous statements on legalized cannabis in the U.S., statements which strongly contributed to a weakness in MSRT shares.