In this week’s Trade To Black Podcast, TDR Founder Shadd Dales speaks with Mindset Capital CEO Aaron Edelheit (@aaronvalue) on the U.S. cannabis industry. Mindset Capital provides full management and a focused research newsletter on Substack pertaining to the cannabis industry. Aaron gives his full-spectrum views on a variety of topics, including impressive performance by select Tier-2 operators, how market dynamics vary by state, SAFE Banking and more.
On the state of the California cannabis market, Aaron is notably bullish. He believes that due to inherent advantages such as ideal climate and overall growing conditions, the Golden State is set to dominate industry supply going forward. While that time isn’t now due to a ban on interstate commerce, Aaron believes that time is coming once the industry fully normalizes. He notes that companies such as Glass House Brands are currently producing cannabis for approximately $170-180 per pound, while the industry average is closer to $800 on the low end.
On the subject of SAFE Banking, Aaron believes odds are 50-50 on whether its passes before the end of the year. But if it does, he expects it to be a transformational event for the U.S. cannabis industry:
And so, who knows what’s going to happen in politics. I will tell you that I believe that the day SAFE Banking passes, it is like a light switch will go off… I believe it will allow the largest investors to invest, regardless of uplisting. And I believe that it will allow corporate America to invest as well. And so, it would be a free-for-all, and I would tell you—that’s why I say, “that’s when the game starts.”
The SAFE Banking Act, which sponsors have attached as an amendment to a mainline bill called the National Defense Authorization Act (NDAA), will be considered in the must-pass defense appropriations bill this fall. The NDAA’s purpose is authorize appropriations for military activities of the Department of Defense and for military construction, as well as to prescribe military personnel strengths and for various purposes. Annual ratification of the NDAA is a slam dunk in political terms, having passed for fifty-one consecutive years.
To view the previous Trade To Black Podcast, click here.