Buy the dip, says Doug Kass

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Hello everyone,

Rep. Ed Perlmutter and a group of bipartisan lawmakers are seeking to attach language from the SAFE Banking Act – a standalone bill that would let cannabis companies access the banking system – to the National Defense Authorization Act. The NDAA usually passes without much commotion, so if Perlmutter gets his way, we may very well have a foundational change in the US cannabis industry.

While it's far from a done deal, and the particulars of what the SAFE Act would allow are up for debate, it's certainly possible that it could open up the US cannabis market to institutional investors – and allow profitable, well-capitalized multistate operators to list on major stock exchanges.

Investors like Doug Kass and others have hypothesized that the drop in cannabis stocks has less to do with the companies themselves, and more to do with all of the constraints these companies are operating under. It's possible that SAFE could uncork all of that - or, as with anything in cannabis, it may take quite a bit longer than most investors hope. Either way, we'll be watching closely.

In other news, I was on the MJ Today podcast this week, discussing New York legalization, federal changes, and what this all means for the industry. I went out on a limb to defend Gov. Kathy Hochul's pick to lead the Cannabis Control Board.

Let me know what you think.

- Jeremy Berke (@jfberke)

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Here's what we wrote about this week:

A cannabis VC who made 292% on his first fund is raising a fresh $25 million to bet on psychedelics

Cannabis VC Phyto Partners told Insider in an exclusive interview that it's pivoting to psychedelics startups in its fourth fund. "I want to go in early when it's most scary, most risky, and where I see the biggest opportunity," Larry Schnurmacher, a managing partner at the fund, said.

A 45-year fund-management veteran explains why cannabis stocks offer the best investment opportunity he's seen in a decade after sinking to a 'generational low' - and shares 2 ETFs to buy now

Doug Kass, a longtime fund manager and the president of Seabreeze Partners, is bullish on cannabis. Kass likened cannabis stocks to investing in the stock market when the S&P 500 bottomed out in March of 2009 amid the financial crisis. "I am accumulating stocks aggressively," he said.

Deals, launches, and IPOs

• Weedmaps made its first acquisition as a public company, buying cannabis marketing platform Sprout.
• Cannabis software company Akerna said it will acquire 365 Cannabis in a $17 million cash-and-stock deal.
• Cannabis education startup Green Flower launched the GF Institute with a group of cannabis companies including Ayr Wellness, Curaleaf, and Cresco Labs to provide credential programs that will help cannabis companies train and develop their workforces.
• Cannabis-infused spirits company Mxxn (pronounced Moon) is launching, providing THC-infused, non-alcoholic replacements for gin, tequila, and bourbon.

Policy moves

• On Tuesday, The Food and Drug Administration and Centers for Disease Control and Prevention issued warnings to consumers against Delta-8 THC products, which have not been tested or approved by federal agencies.
• House lawmakers introduced drug reform amendments to the National Defense Authorization Act (NDAA), including proposals calling for research into psychedelic compounds and banking for cannabis businesses, reports Marijuana Moment.

Research and data

• A study published in the Journal of Consumer Research found that introducing new products that look like consumer products from any other industry like cannabis-infused lotions or edibles helped reduce the "bad" associations some consumers have with cannabis.
• A study published in the journal Experimental and Clinical Psychopharmacology found that the long-term use of medical cannabis helped relieve pain, sleeplessness, and anxiety among patients.

What we're reading

Jim Jones and Alex Todd on scaling a cannabis brand in a pandemic and partnering with Jay-Z's cannabis company (Insider)

Aurora Cannabis, former execs accused of 'sham' sales to inflate earnings, lawsuit alleges (BNN Bloomberg)

Christian Angermayer is reinventing the psychedelics sector. The 43-year-old German billionaire told us how he started investing in the space after his first psychedelic trip in the Caribbean - and why it turned him on to crypto. (Insider)

2 graphics show why buying cannabis based on strain name is useless (Insider)

The Well-Blown Mind (New York Review of Books)