In this week’s Trade To Black Podcast, TDR Founder Shadd Dales and TDR contributor Anthony Varrell speak with Jason Spatafora—otherwise known as the @WolfOfWeedST—about U.S. cannabis stocks and the macro stock market. With news that Democrat senators are pressing Joe Biden on federal cannabis reform in calendar 2022, the panel discusses what this all means for investors.
As reported in The Hill this past Wednesday, Democratic senators are putting pressure on the Biden administration to use its authority to deschedule cannabis, with skepticism that Chuck Schumer’s Cannabis Administration and Opportunity Act can gain traction before the midterms. The letter is a follow-up to earlier requests asking that the Department of Justice “use its existing authority under the Controlled Substances Act of 1970 (CSA) to begin the process of removing cannabis’s classification as a Schedule I drug.”
In terms of investing strategies, Jason explains that he’s currently purchasing call option known as LEAPS—or options that have an expiration date greater than 1 year—and selling puts on short-dated options in expectations of the market declining. His overarching thesis is that the S&P 500 will eventually test the recent lows around the 3,640 area and head lower. Both Anthony and Jason expect corporate earnings to decline precipitously as the economy is probably in, or near, recession.
On inflation, Anthony Varrell is seeing a noticeable jump in food commodity prices locally. He recounts how beef prices at a local stake house now list the prices of cuts in “market prices” as opposed to a set price on the menu. A small anecdote, but one that he has never experienced before.
Despite this, he notes that local Florida tourist destinations are still packed, as people are seemingly absorbing the costs to maintain their lifestyles on July 4th weekend.
To view our previous Trade To Black Podcast, click here.